America’s job-search paradox: The people who really need jobs get the worst offers

With the unemployment rate falling below 4% for the first time since Bill Clinton was in the White House, the job market is the tightest it’s been in almost 20 years. But that doesn’t make it any easier for people currently without a job to find a good one.
Unemployed workers who are either at the start of their careers or nearing retirement age are much less likely to receive responses to job applications than those in their prime working years, according to a working paper from researchers at Princeton University, Arizona State University and University of California, Los Angeles, distributed by the National Bureau of Economic Research.
Additionally, workers who have been unemployed for a year or longer are less likely to receive a callback from an employer than those who were without a job for a shorter length of time.

Unemployed job-seekers face other obstacles to securing a decent job
Unemployed job hunters, in particular, are at a significant disadvantage compared to their peers who are already holding a job, according to a separate analysis from researchers at the Federal Reserve Bank of New York and Columbia Business School. The study was based on responses from more than 3,000 people collected as part of the New York Federal Reserve’s Survey of Consumer Expectations.
People who are already employed receive job offers with hourly wages that are 48% higher on average than the offers that unemployed workers get. Plus, 63% of the offers received by unemployed individuals come without any benefits such as employer-sponsored health insurance or a retirement plan, versus just 40% for employed workers.
This discrepancy between the employed and unemployed is not for a lack of trying on the part of those without a job. Including offers that were turned down, more than 36% of unemployed individuals had received an offer in the previous month, according to the survey’s results, compared with just 14.5% of employed workers.
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Some of this can be chalked up to employed job-seekers being much more discriminating. Roughly half of unemployed individuals accepted the best offer they had received in the prior month, versus 29.6% of those who were already employed. And 37.7% of employed workers said their job offers involved bargaining, while only 27.4% of unemployed people said the same.
But researchers noted other factors could be at play that may explain this trend. Employed workers could have access to more useful professional networks, and these in turn could prompt “more frequent and higher-quality job offers, primarily through informal recruiting channels,” the researchers wrote. Indeed, 24.3% of job offers employed individuals received were made through unsolicited contact, versus just 14.2% of those to people without a job.
“Yet another possibility is that there is some stigma associated with being unemployed — whether because of explicit discrimination by employers or because employers use current labor force status as a signal of unobserved worker quality,” the researchers wrote. “This would lead to a bias that awards better job offers to those who are already employed.”
Employed workers do have their own job-hunt hurdles
The Federal Reserve study surmised that employed individuals may receive more frequent and higher-quality job offers because of their access to informal recruiting channels. Indeed, 24.3% of job offers employed individuals received were made through unsolicited contact, versus just 14.2% of those to people without a job.
But employed workers who are proactively seeking new employment could face additional challenges just by virtue of having a job already, especially if the job they have appears to be an interim one. Unemployed applicants had a callback rate of 12.6%, versus 10.8% for people with high-quality interim jobs, when it came to highly-skilled positions, according to the NBER-distributed study.
“The employer might feel that currently-employed applicants, regardless of job quality, are more difficult or expensive to recruit,” researchers wrote.
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