Barack Obama

The Wrong Way to Help the Unemployed

The trouble with the American Jobs Act


In his dogged quest to boost employment, President Barack Obama has searched far and wide for new solutions. One provision in his American Jobs Act may very well have a positive impact on hiring. Just not in America.

The section consists of a ban on discrimination against the unemployed. Some companies have posted ads that say those who are out of work need not apply. It sounds like a cruel joke: You don't need a job if you have a job, but unless you have one, you can't get one.

But the real joke is thinking that the way to get companies excited about hiring is making them walk through a minefield to do it. Or that employers who shy away from the unemployed are irrational or evil. Or that the policy of a few companies has much to do with the plight of the jobless.

This proposal may be interpreted as one more sign that Democrats know little about the realities of running a business. Could be, but they aren't alone. New Jersey actually passed a ban that mandates fines of up to $10,000 for refusing the unemployed, and it was signed by Republican Gov. Chris Christie, a conservative darling.

The White House argues, "The exclusion of unemployed applicants is a troubling and arbitrary screen that is bad for the economy, bad for the unemployed, and ultimately bad for firms trying to find the best candidates."

Trust Obama and his aides to think they know better than employers how to find the best employees. If the policy is self-destructive, firms that practice it will pay a price for their stupidity: the loss of good workers.

That competitive disadvantage may eventually drive them out of business. The relentless pressures of the market are a powerful force in favor of rational hiring policies.

The forbidden policy appears to be the employment equivalent of a two-headed cow—not mythical, but a long way from being common. The National Employment Law Project trumpets that over four weeks, it found 150 ads excluding the unemployed on major job sites, such as and Career Builder. It's a puny number, when you consider that Career Builder alone claims to list a million jobs.

The few companies that rely on this method may have good reason to steer clear of those with big gaps in their work history. In a fast-changing industry, last year's knowledge may be as useful as skill with an abacus.

A lot of people are unemployed through no fault of their own. But in a depressed economy, companies can afford to be ridiculously choosy. They may figure that anyone with a job in a sluggish sector must be an unusually able employee, since all the employees who weren't unusually able—along with many who were—got laid off long ago.

The change would expose employers to lawsuits from rejected applicants without appreciably improving the chances of those it is supposed to help. You can make something illegal without making it hard.

If the law is passed, a hiring manager who doesn't want to hire someone who is unemployed still won't want to hire someone who is unemployed—and probably won't have much trouble coming up with "reasons" to reject them. The manager just won't be allowed to tell these candidates they are wasting their time.

Companies would also get a new incentive not to post openings at all—relying instead on informal referrals to evade the prohibition. They would also get a nudge to bypass the entire U.S. system of employment law by moving abroad.

The supporters see this sort of "discrimination" as comparable to shunning people on the basis of race or sex. But the unemployed are not a group that has been victimized by age-old laws and customs based on false stereotypes and baseless fears. They have no history of hostility to overcome.

What they have to overcome is a dismal economy that generates no new jobs. In a boom period, impediments like this would be of no concern. The problem the unemployed face is not that they are excluded from some jobs, but that there is so little hiring going on.

When companies find their business growing, the unemployed will gain hope, and not before. Without a healthy economy, this measure won't be helpful. With a healthy economy, it won't be necessary.



NEXT: A Jury of His Peers

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  1. Jobs, jobs, jobs, jobs, jobs.

    I do love a good job, hehehehehe.

    1. I have a few questions about your time-stamp, Mr. Clinton.

      1. Clinton does not sleep. He only parties.

  2. Good article. It contains a healthy dose of common sense.

    1. Something you have never had.

  3. A question for the group:
    If you were hiring an employee right now and you had three candidates, all with equivalent experience and accomplishment on their resumes, and one was recently unemployed (say for 1 month), one had been unemployed for 98 weeks, and one whe was currently employed, how would your decision be swayed by their way current employment situations?

    1. I’d be somewhat biased against the dude who’d been unemployed for 98 weeks, I can’t lie. Between a guy who had been unemployed for a short time and a guy who had a job now, it wouldn’t make a whole lot of difference to me. Hell, the guy who is currently employed probably doesn’t need the job as badly.

      1. I think i would feel similarly. The question of whether the short term unemployed guy “needs” the job should be technically irrelevant to the employer, but the fact of the unemployment might give the employer some leverage to negotiate a more agreeable wage.

        1. A fair point.

      2. Someone who’s been out of work for two years is basically unemployable due to the fact that they haven’t been keeping up on recent changes in their field. It’s a lot easier to hire someone who is coming from another company or hasn’t been out of the game more than a couple months or so, because you know it probably won’t require additional training time to get them up to speed.

        1. That’s the bogus excuse given but it’s not based in fact for most jobs. My last job, in March of 2011, was writing proposals for government solicitations. This company relied on Windows XP, a ten-year old version of Word, seven year-old computers and Google. That was high tech for this company. Most companies I’ve worked for rarely kept up current versions software or hardware for “expense” reasons. What you are stating is just an excuse for prejudice and probably age discrimination. As far as training goes, I can run rings around many of the IT people and management drones I have met just from my own ongoing education and updating of tools (I certainly have and maintain more current tools than my previous employer) but if everyone thought like you, I’d never get. If you turn away people who you “think” are out of touch, you may be throwing away experience you yourself cannot even understand. Your (and others’) arrogance and discrimination astounds me.

          1. should read “I’d never get a chance to show what I can do.”

          2. What you are stating is just an excuse for prejudice and probably age discrimination.

            Your (and others’) arrogance and discrimination astounds me.

            Take your guilt-mongering and shove it up your ass. If the company thinks you’ll make them money, they’ll hire you. That you think it boils down to prejudice and age discrimination shows you simply have a built-in excuse for when someone doesn’t feel like hiring you.

            1. No, you once again prove how completely wrong you are.
              I respect people/companies hiring who they want, when they want, how they want. I don’t want anyone to feel guilty for doing what is best for their company. I’ve rarely been unemployed for the 38 years I’ve worked (just a few months over the last two years) but I see a lot more BS posturing like you stated these days. Go in peace. I’m just glad I don’t work with you.

    2. Flip a three-sided coin. Then you aren’t liable…”It was fate.”

    3. The person who had been unemployed for 98 weeks is (quelle coincidence!) almost out of unemployment checks.

      I would be very suspicious of his work ethic.

      Family? A wash. The family breadwinner may work harder to keep the job, or they may be that person in the office who is always begging off to run some kid-driven errand or other.

      The other two? A lot would probably depend on which one has a rockin’ body.

    4. From my own experience the long term unemployed guy is damaged goods in some way and the employed guy is likely looking to leverage a raise out of his current employers, so I’d go for the short term unemployed person.

      That’s based on the premise that all three candidates are exactly the same, which is of course impossible. Even if the resumes are nearly identical there will be differences in attitude, aptitude and communication style between the three that would be more important determining factors than current employment status.

      And who “needs” the job more is irrelevant. I’m running a business not a charity.

    5. It depends. How big are their tits?

      I kid, I kid.

      1. And if I had bothered to read all the comments I would have seen that $6M RoboTorso already made that joke 3 hours ago.

  4. hire the unemployed w a family

    1. A business has to think of its own interests before those of employees. Hiring an ineffective employee based solely on empathy for their need may risk the business and livelihoods of other employees who rely in thier jobs as well. Therefore a business can’t simply hire people who “need” jobs.

      1. Hiring someone with a family may have nothing to do with empathy. One could argue that someone with a family might put in more of an effort because there are children and a spouse at home dependent upon his/her income. Also, they are probably less apt to jump to a new job on a whim.

        Anyway, good article here. It pretty much summarizes all the thoughts I had after hearing Pres Obama’s proprosal.

        1. If the spouse also works then the potential hire would have a safety net that he may take for granted and not perform as well as someone with no family support.

          1. Very true! Like anything, gotta weigh the pros the cons.

    2. Oh, now that’s not fair. Should we discriminate against those without families?

      1. Well obviously. And we should discriminate against single people the most.

  5. Also, in my experience in interviewing and hiring goes, empathy plays a singnificant if minor role in hiring for many managers but even if there is strong empathy employers will tend to scrutinize and ask more questions of people with big gaps in experience or many short-run jobs that were not simply contractor work.

  6. If you were hiring an employee right now and you had three candidates, all with equivalent experience and accomplishment on their resumes, and one was recently unemployed (say for 1 month), one had been unemployed for 98 weeks, and one whe was currently employed, how would your decision be swayed by their way current employment situations?

    Hire the one w/ the biggest rack.

    1. No dudes need apply.

      1. Not even a dude w/ a rack?

        1. Especially not that.

  7. That’s racist.

    1. Actually, that would be genderist.

  8. If the law is passed, a hiring manager who doesn’t want to hire someone who is unemployed still won’t want to hire someone who is unemployed?and probably won’t have much trouble coming up with “reasons” to reject them.

    “I’m sorry. You simply don’t have enough *recent* experience.”

  9. It’s more a matter of needing a quick way to cut the number of applicants down to a reasonable size w/o much time and thought.

  10. Ambulance chasers are gonna love this law.

    How long until the class action lawsuits begin?

  11. Economists universally agree that there exists a perfect combination of added regulations and increased tax burdens that will bring the economy to 100% employment. The Obama Administration simply needs to find that number.

        1. I don’t consider lawyers to be people.

          1. How intolerant! Lawyers are people too. Maybe not the same species, but still….

  12. The biggest problem with the so-called “American Jobs Act” is that it doesn’t even exist yet.

    1. The Big O has promised to send it over to Congress.

      Right after his next vacation.

      Feel the fierce urgency.

      1. “If you love me, help me pass this bill (which I’ll get around to developing sometime after Veterans Day)!!!!!”

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  14. “The Wrong Way to Help the Unemployed.”

    Chapman,did you figure this out all by yourself?

  15. What’s interesting in all the discussions of the cons (and, to the deluded, pros) of the alleged (and mythical) Jobs Act is the complete lack of any statement such as:

    “The Feds have absolutely NO moral or legal right to dictate the terms on which employers will hire.”

    That moral outrage should be boiling over to the extent to call for a reexamination of whether it’s still worthwhile to even have a Federal government.

    That all the discussions revolve around the utilitarian aspects of the proposal is more evidence of just how low American culture has sunk.

    1. If you can’t make a profit without exploiting employees (or violating other reasonable social standards) then you don’t deserve to make a profit. Capitalism =/= guaranteed profits.

    2. You are correct. I read the article and the comments above yours, completely forgetting that the big crime is that the feds think this is any of their business. Very very sad. Thank you for reminder that we must continue to beat our heads against the wall if we ever want to break it 😉

  16. What possible incentive does the private sector have to encourage low unemployment? It should want to increase its labor costs for the good of society?

    1. The “private sector” isn’t some coordinated monolith that reasons on its own, it’s a term loosely grouping millions of companies with different interests and acting in their individual self-interest.

      You don’t incentivize the “private sector” to reduce unemployment as some sort of collective, you create conditions where the individual actors can each realize profit for themselves by bringing on more workers.

    2. Playing along with your collectivist fantasy:

      What possible incentive does the private sector have to encourage low unemployment?

      More employed people = more customers?

  17. From my experience, it seems that at least some of this discrimination of the unemployed is cause by unemployment benefits. I’ve been involved in a couple of hires here where I work, and we get a flood of applications from unemployed people who have zero relevant experience; they just blindly submit applications to keep the gubmit checks comin’. Hell, the other day someone told me they receieved a resume all in Wingdings.

    1. I think you are right about the unemployment benefits and the submission of applications, however, there is another side to this issue. I recently took off a few months to work on my house over the summer (I’m renovating a garage into a home office). I didn’t use unemployment, just savings but reading these comments (all hiding behind pseudonyms as well), makes me wonder if I’m going to be discriminated against when I decide to work again. So much for land of the free, eh?

      1. Yes…land of the free, where an employer is free to hire someone or not without the gov’t telling them they have to (being told to do something under threat of sanction is actually the opposite of free).

        1. I agree with your statement. Employers SHOULD be free to hire who they want just as employees should be loyal to themselves and ready to leave for better opportunities without considering how it affects the employer. Freedom is for everyone, not just employers.

  18. So much for land of the free, eh?

    How so? Those employers will be exercising their free choice not to hire you, won’t they?

    1. Damn you, RC, I should have refreshed before posting!

    2. Of course they can and more power to them. I certainly respect their right to do so. Just as I’m sure you would respect the right of any employee to leave any company for any reason at any time with no explanation.

  19. Isn’t it a basic tenet of job searching and resumes to not have big gaps in employment? If you are unemployed, then what are you doing with your time? If I were hiring and had the choice between

    a)someone who was employed
    b)someone who was unemployed
    c)someone who was unemployed, but has been volunteering or interning somewhere within his field

    I would choose c, hands down (all other things being equal).

    As soon as people feel like they can’t be discriminated against for being unemployed, they will hold their unemployed status up as a badge of honor to prove they deserve entitlements. Just watch.

    1. This is a good point. And even if you cannot get an internship within your field, just doing volunteer work or anything that shows you prefer to remain active and busy helps improve the appearnace of a big gap in employment.

  20. The reason there are record unemployment numbers is because there are more people than we need jobs for. The problem isn’t unemployment. It’s overpopulation. Clearly, the answer is to start removing competition by restricting the population.

    1. There’s some truth to the idea that we have more people than we need jobs for. The problem isn’t overpopulation. It’s that our money doesn’t hold value and an absurd level of taxation take what money we have left. 50 years ago a family of 4 could live well on 1 income. Today you need 1 income just to pay taxes and inflation robes you of what ever you have left. The system can’t keep going like this. Sooner or later it will fail.

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