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Businesses more willing to hire the hard-to-employ, but will it last?

By DON LEE
Los Angeles Times

July 02. 2017 11:19PM
A tightening labor market in the U.S. is opening up jobs for more people with work barriers. (DREAMSTIME/TNS)



WASHINGTON — At 49, Marshall May Jr. could not remember whether he had ever taken his mom out for a meal.

Certainly not in the last 20 years when he was in and out of prison, serving seven separate terms for crimes such as stealing to support his drug habit. He last held a regular job in 1994, as a front desk clerk in a Los Angeles hotel.

But this spring May was hired as a part-time street sweeper by Chrysalis, a nonprofit serving the homeless, and that helped him land full-time work as a health care peer specialist for which he is now getting trained. He still does not have a place of his own, but with a job in hand, May figures he at least has a shot now. After getting back on his feet, he took his 83-year-old mom to dinner on Mother’s Day.

“It was an incredible feeling,” he said. “I spent a lot of time at the table crying.”

As the nation enters its ninth year of economic expansion next month, the low unemployment and tightening labor market have begun to open doors for people like May, who not long ago had all but given up any hopes of returning to the workplace.

Thus far the improvement for the hard-to-employ has been relatively small and spotty, confined mostly to places with exceedingly low unemployment, such as in the Midwest and Colorado, where the 2.3 percent jobless rate is the country’s lowest. The nationwide unemployment figure was 4.3 percent in May, a 16-year low.

In New Hampshire the unemployment rate was 2.9 percent in May. It has been at 3 percent or lower since January 2016 and remains one of the lowest in the country, making it tough for employers to find qualified workers.

During the Great Recession and immediate aftermath, joblessness surged and reached a high of 10 percent. Millions of people in the prime of their work lives, mostly men, lost jobs in manufacturing, construction and other industries. Since then some have returned to the labor market, but many remain unaccounted for, as if they had vanished from the economy. An opioid epidemic in both rural America and urban centers like Manchester, N.H., and swelling numbers getting incarcerated or on government disability have added to the startling decline in employment levels.

But if decent job growth keeps up as most economists expect, groups with historically high unemployment — people with criminal records, disabilities, low skills or little education — could make some real gains, as they did in the late 1990s.

Already, the jobless rate for adults with less than a high school diploma is down to 6.1 percent, less than half of the level five years ago and close to a quarter-century low of 5.8 percent, according to government data. For workers with just a high school education, unemployment most recently was 4.7 percent, compared with an all-time low of 3.2 percent in November 1999. These two groups represent about one-third of America’s workforce of 160 million.

The labor shortage is pronounced in booming metros such as Austin, Texas. Businesses are so desperate for workers there that they recently teamed up with community colleges, labor unions and nonprofit organizations to train people for jobs such as light industrial work, nursing assistants, information technology support and office clerical help.

“We have employers more open to hiring people with criminal backgrounds than we’ve ever seen before,” said Traci Berry, a senior vice president at Goodwill Central Texas, part of the nationwide network of nonprofit community job-training and placement services.

Even in California, where unemployment statewide is typically higher than the national average, the latest jobless rate of 4.7 percent in May — the lowest since November 2000 — has begun to benefit job developers such as Chrysalis. Last year it secured positions for 2,350 homeless, ex-offenders and other long-term unemployed, up 17 percent from 2013 and double the number placed into jobs in 2008. Chrysalis’ support from private donors also is sharply higher.

“It’s great that they’re finding success now. It’s great that employers are more open to bringing them on,” said Chrysalis’ chief executive, Mark Loranger. “But I do wonder, have they really changed their attitudes on hiring people with backgrounds? ... When the economy turns on our clients, will things go back to being extraordinarily difficult?”

History is not too encouraging. Even during the record-long expansion of the 1990s, when unemployment was lower, productivity higher and wage growth stronger than the current growth period, hopes that rose toward the end of the decade were dashed as the economy tipped into recession in early 2001 with the tech-stock bust and later, the effects from 9/11.

Georgetown University economist Harry Holzer is less optimistic today than at the turn of the last century. More workers have multiple barriers to re-entry, such as dependence on drugs and government disability programs, he said. And the labor market is not red hot as it was back then, when unemployment was below 4 percent during much of 2000.

“A lot of employers were so desperate for bodies that anyone who was marginally employable, they were willing to look at,” said Holzer, who was chief economist in the Clinton administration’s Labor Department in 1999.


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