Measures Aim to End Bias Against Long-Term Jobless

From - The Wall Street Journal, February 24, 2012

By SHELLY BANJO

More than a dozen states are considering legislation to make it illegal for companies to discriminate against the unemployed.
State lawmakers say they see the bias turning up in a nation with an 8.3% unemployment rate: Companies that explicitly advertise that they won't hire someone who isn't currently employed.

Kim Keough, of Bethel, Conn., was laid off in 2008 and says she sees bias against the long-term unemployed.

The proposals from Connecticut to California range in scope from banning advertisements that require current employment to allowing unsuccessful job candidates to sue businesses under the same discrimination laws that apply to bias on the basis of religion, race, gender or national origin.
The efforts come as the percent of the long-term unemployed—people looking for work for more than six months—has consistently topped 40% since December 2009, when it broke that threshold for the first time since 1948, the year such data began being collected.
President Barack Obama included a similar measure as part of a federal jobs package that failed to gain traction in Congress last year.
Critics of the laws say creating a new protected class of employees places undue burdens on businesses and helps lawyers more than the unemployed.
"Creating a protected class of people who bring lawsuits is just going to benefit the people who bring the lawsuits," said Robert Topel, a labor economist at the University of Chicago Booth School of Business.
In New Jersey, the first state to pass such legislation, only one company, Crestek, Inc., has been cited for allegedly violating the law since it went into effect in June 2011. It was fined $1,000.
"We are challenging this. As a private employer, the government has no right in legislating how you hire and what's in your business's best interest," said Robin Lord, an attorney for Crestek, Inc., a Ewing, N.J., maker of industrial cleaning systems.
Supporters say the laws are needed to protect the unemployed.
Employers often worry that job skills erode the longer people go without working and may pass over unemployed workers because they assume other managers didn't hire them for good reason, said Gary Burtless, a senior fellow at the Brookings Institution and former U.S. Department of Labor economist.

Economists say that, generally, each passing month without a job makes an unemployed worker less likely to get hired. Many eventually drop out of the work force altogether.

"The longer you're unemployed, the more likely you are to be perceived as a risky hire and the less likely you are to get a job," Mr. Burtless said.
When Kim Keough lost her job in July 2008 at Stolt-Nielson USA Inc., a Norwalk, Conn., ship-tanker company, she expected to find another human-resources post within months. More than three years later, she is still looking and attributes the holdup in part to what she calls a widespread bias against long-term unemployed workers.
"Recruiters have told me not to bother sending in a resume if I'm not currently employed," said Ms. Keough, who is 46 years old and lives in Bethel, Conn. "It's damned if you do, damned if you don't...The longer you are out of work, the more discriminatory companies get."
Citing complaints of public job advertisements with explicit prohibitions on applications from unemployed workers, state lawmakers say removing the stigma of long-term unemployment could help the 5.5 million Americans who in January had been looking for work for more than six months. Nearly four million people in the U.S. have been out of work for a year or more, according to the U.S. Department of Labor.
Connecticut's proposed law would make it a discriminatory practice to refuse to hire someone who is unemployed, including it in the same human-rights statutes that protect classes such as a gender and race. Prospective employees could sue to recover damages and attorney's fees.
Under proposed legislation in California, a business would face $1,000 or more in fines for job postings or hiring decisions found to discriminate against the unemployed. In Florida, the fine goes up to $10,000 per violation.
The laws have varying levels of support. In Colorado, a bill to prohibit job ads from requiring applicants to be employed failed to make it out of a House Committee, which voted 7-5 Tuesday against an unemployment discrimination proposal. In Connecticut, the bill has the support of Democratic leaders, who hold a majority in the state.
With "Washington stuck in gridlock, we think we have a better chance of getting this passed at the state level," said state Senate President Don Williams, a Democrat. "We are not ordering employers to hire unemployed individuals, we are just asking businesses to ensure that everyone is able to get a foot in the door."
Write to Shelly Banjo at shelly.banjo@wsj.com