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Michael Hirsh, writing in the National Journal:
Along the way, 'long-term unemployed' has increasingly become a synonym for 'unwanted.' As industries die, skills atrophy, and ambition fades, especially among older workers. In a new era of jobless growth, fiscal austerity, and the relentless drive for productivity, employers get pickier about whom they hire. Workers who don't retrain quickly at a high enough level or those who are stuck with an underwater mortgage and can't move right away for a job opportunity quickly become long-term unemployed.
U.S. companies have grown so brazen about avoiding the long-term unemployed that many place ads for only 'currently employed' applicants. Sen. Richard Blumenthal, D-Conn., and Rep. Rosa DeLauro, D-Conn., have introduced bills seeking to bar the practice as illegal discrimination.
In recent months, Federal Reserve Board Chairman Ben Bernanke and President Obama have sounded increasingly urgent alarms about the staggering number of long-term unemployed. And they are right to do so: 42.4 percent of the nation's 13.9 million unemployed workers have been out of a job for more than six months. That's by far the highest share of long-term unemployed since the government started keeping records a half-century ago. Expert after expert now warns that the longer a person goes jobless, the greater the atrophy in skills and ambition, and the more likely that person is to drop out of the workforce entirely.
What Bernanke and others rarely mention, though, is that this trend has been building for at least three decades. The share of left-behinds has generally ratcheted up with every economic downturn since the early 1980s. And today, even two years after the Great Recession technically ended in June 2009, the number of long-term jobless has continued to climb to record levels. It shot up from 29.3 percent of total unemployed workers in June 2009 and peaked at 44.6 percent as recently as September.
Washington, dominated by a free-market consensus ever since President Reagan's era, has ignored that 30-year pattern. Partly as a result, reams of data show that America's middle class has been shrinking. Among the few who has long second-guessed the Washington mind-set is Frank Levy, an economist at the Massachusetts Institute of Technology who coauthored a much-cited 2007 paper concluding that labor began losing the fight to capital in the late 1970s.