Hiring Bias Creates "Unemployed Professional To Poverty" Class

Most professionals, and almost all executives, have learned to man or woman up in hard times.  They wear a mask that displays confidence and projects success to the world, because they know there’s no whining in business.

The Great Recession has made executives a little more willing to be honest, but only if they are projecting a positive and confident “turn-around” future outlook no matter how dire the future may be in reality.  Failure is not an option.  Failure is seen as personal and still remains shameful even if out of one’s control.  

It takes guts for a professional to take the mask off.  It takes strength for anyone to be vulnerable by opening themselves up publicly for judgment by the world.

Former construction company CEO Mollee Harper is courageous.  She has character.  Mollee is willing to be painfully raw and powerfully real for what she sees as a larger good.  She is speaking out.

The Great Recession has turned her life upside down and inside out with no mercy.  She went from being a custom construction company CEO to being on food stamps.  She still exudes personal confidence, but she is taking the mask off when she reveals she is uncertain what her life will look like in a year.   She wants it to include a job she can be an asset in again.  She wants to get her life back on track.

Why should you care?  This is just another failing economy hard luck story, right?  We can’t fix what we don’t acknowledge is broken.  When America has a growing class of highly qualified, well educated, and starving for work former professionals who have now been unemployed 12-24 months, there is a major problem. 

The combination of a jobless economic recovery and a growing dismissive attitude toward the unemployed professional by the employed business class is creating an “unemployed professional to poverty” class.  This could never happen to you, right?  Mollee Harper didn’t think so.

Mollee has always been successful and considered her work her primary focus in life.  She certainly could never have imagined not being able to afford food.  She has been looking for employment since the construction company folded over two years ago.  She went through all her savings in eighteen months and applied for government food assistance with no other options.  

How could this happen?

The recession is moving into its third year, and the recovery has been the worst since the Great Depression.  The official unemployment rate has remained at or above 9% for a record setting 21 months and rose again to over 9% in June 2011.  The official rate only counts those that are collecting unemployment benefits. 

On December 8, 2010, the labour Department released its 2009 work report. In 2009, there was an increase of 2.7M long-term unemployed Americans looking for jobs in 2009 over the 2008 total. There were 5.8M job seeking Americans that had no work at all in 2009.

In 2008 and 2009, there was a net loss of approximately 8 million jobs.  In 2010, it was first estimated 1.1 million jobs were created.  The labour Department’s January 2011 report revised this figure down to report 950,000 jobs were actually created in 2010.  So far in 2011, the monthly net job growth has not kept up with population growth.

The Bureau of labour Statistics November 2010 Employment Situation report detailed at 43%, almost half of the long-term unemployed were 45-years and older.

The Economic Institute’s Issue Brief #270 reported at the end of 2009, there was an unemployment rate of 9.7% for American adults.  The unemployment rate for African Americans was 15.5%, and it was 12.4% for Hispanics.  It was 23.9% for African Americans in Michigan.   

A more recent report titled “Another look at poverty in the Great Recession” from the Economic Institute notes, “The U.S. Census Bureau released alternative estimates of poverty yesterday that give yet another reminder of the disastrous effect the recession has had on workers and families.”  This report is honest in highlighting the official means of poverty measurement fails in accuracy by not including all relevant factors.    

The federal government has had to admit unemployment length has not gotten better in 2010 and 2011.  The Bureau of labour Statistics’ regular reporting in the format “labour Force Statistics from the Current Population Survey” provided a “Changes to data collected on unemployment duration” explanation beginning in January 2011.  This explanation included the following:

“Effective with data for January 2011, the Current Population Survey (CPS) was modified to allow respondents to report longer durations of unemployment. Prior to that time, the CPS accepted unemployment durations of up to 2 years; any response of unemployment duration greater than this was entered as 2 years. Starting with data for January 2011, respondents were able to report unemployment durations of up to 5 years. This change affected estimates of average (mean) duration of unemployment. The change did not affect the estimate of the number of unemployed persons and did not affect other data series on the duration of unemployment.”

It continued, “There was an unprecedented rise in the number of persons with very long durations of unemployment during the recent labour market downturn. Nearly 11 per cent of unemployed persons had been looking for work for about 2 years or more in the fourth quarter of 2010. Because of this increase, BLS and the Census Bureau updated the CPS instrument to accept reported unemployment durations of up to 5 years.”

The wear and tear on Americans, including unemployed professionals and executives, is showing with extreme increases, if not records are being set, in the number of foreclosures, short sales, settlements, charged off credit card accounts, and bankruptcies in 2008-2011.  One in eight Americans is now on food stamps.  One in seven is now living in poverty.  This includes formerly employed professionals and executives. 

Many still sitting in the corner offices and Human Resources departments are deliberately closing the opportunity door for professionals caught in the middle of the Great Recession.  Many job seekers talk of facing ageism and racism at even higher rates than normal.  This is almost impossible to actually document and prove. 

News articles uncovering hiring bias against the unemployed began appearing in 2009 and continues today.  A recent Atlanta Post headline says it all – “Unemployed Need Not Apply Here.” 

Giving employers the benefit of the doubt on not practicing ageism and racism in hiring, there are four major employment trends that do indeed lock out unemployed professionals.  Two of the trends are fairly new, and two have always been in the business mind set.    

The new trends are openly justified on network and cable news, in newspapers, and the Internet.  Does all this pontificating make these trends more socially palatable?  Do large numbers of people competing for one open position make these trends more socially acceptable?  Is there a self-fulfilling prophecy being ingrained in business hiring practice trends now?

New trend 1 is the prevailing thought by employers that if one is unemployed, they were not productive or valuable enough to their former employer.  This manifests in the practice of companies not looking at anyone that is unemployed to fill open positions.  

There are numerous antidotal stories of employment ads stating the unemployed need not apply and professional recruiters being told to only screen those that are employed for interviews.  If someone is unemployed because the company they work for folded, or they were let go in a 2nd or 3rd round lay off, is it accurate to label them less productive or less valuable than those lucky enough to not have faced this?  

New trend 2 is the lament that if someone has been unemployed for over 6 months, they have lost their skill sets and their connection to a work environment.  Does it make sense someone can lose a skill set it took 10, 15, 20 years of experience to acquire in six months?  If one has technical skill sets in general, is it reasonable to presume they have no further learning abilities?  Is someone looking for employment every day for six months or longer disconnected from a strong work ethic?

Existing trend 3 is that an applicant having held a higher level position than the open position is overqualified, and they don’t really want the job.  Is it realistic in today’s economy that if hired the applicant will keep looking and leave as soon as something else comes along?  Is it foolish to only want a less experienced applicant, because they are a better bargain?   What is the net cost with training and skill set development figured in?

It is important to realise life is never just a continuous straight line up for most people including those that have been at an executive level.  Life most often takes a path that twists and turns, and it sometimes warrants a step or two backwards to move one forward.   

Existing trend 4 is an employer tying an applicant’s presumed responsibility level and potential job performance to a credit report or a FICO score. 

What is a FICO score?  Why is it important to anyone?

There are three major national credit bureaus which calculate a credit score using their own scoring model and score name. Fair Isaac & Company developed the best known which is why the general referred name for a credit score is FICO.  It’s similar to most cola drinks being referred to as a Coke.

Experian uses FICO.  The Trans Union score is called EMPIRICA, and the Equifax score is called BEACON.  Primarily the logarithms or formulas used to produce a credit score, or FICO, take into account credit history, payment history, credit card balances, credit availability, and number of credit inquiries. 

A FICO traditionally represents a credit applicant’s risk level in being granted a mortgage, car loan, other loans, and credit cards.  This risk score determines being declined or approved and what interest rate is offered.  Scores range from 300 to 950 with higher scores being the better credit risk. 

Your credit worthiness information is also often used to determine your worthiness to rent an apartment, to purchase insurance (life, health, car, homeowners), and to be offered employment or not.

There is no evidence justifying this risk connection.  In fact, even the credit bureaus that market employers with this connectivity myth have zero statistical evidence to document employees with bad credit are any more likely to steal or commit fraud than workers with perfect credit.   

Figures for 2010 reflect there are 70M Americans or 35.5% of consumers with poor credit reports and FICO scores below 650 as a direct result of the economic meltdown since 2008. 

The new faces of low FICO do not have years of poor credit history.   These new faces belong to the mid and upper income former professionals.  These are people that are in fact responsible and have always managed money well.  They had perfect credit their entire lives before the recession put them into prolonged unemployment.

Mollee Harper is one of these new faces.  Her life has been on that twist and turn path since 2008.  She lost her stability when she lost her executive position in an industry that was hit hard with company failures in the beginning of the recession.  She did not lose her job through any fault of her own.

She worked her career into a CEO position by being productive and a valuable asset.  She has a track record of proven successful experience.  She has always felt good working hard.  She has always displayed a strong work ethic and winning attitude.  She still does.  She hasn’t lost this simply because she is unemployed.

Mollee understands what it is like to have employed friends avoid her.  She knows what it is like to go to bed worried about paying bills – what it is like to be afraid she will be evicted – what it is like to try to negotiate a hardship payment with utility companies – what it is like to deal with bill collectors and to be sued by a credit card company.  She knows hunger.

She has had to sell everything.  She has had to determine what the really important things in life are to her.  She has had to apply for government assistance as a last resort and try to keep her head up.  She knows what it is like to only have faith left.     

Mollee has had to let go of pride, but her dignity remains in tact.  She is proactively seeking employment every day and has energetically accepted lower paying contract work.  She has maintained her positive attitude and self confidence.  She doesn’t see herself as a victim.

Review Mollee Harper’s LinkedIn professional profile, and one will notice consistency in glowing recommendations that highlight her “wonderful personality, high energy and can-do attitude”; her abilites to “facilitate meetings and mediate issues between business and technical audiences”; her “exceptional set of interpersonal skills”; her “understanding the needs of each of her clients”; and her “professionalism and attention to detail in everything she does.”

Do you believe she is unemployable, because she is unemployed, or because she has been out of work for more than 6 months?  Do you believe she would only accept another CEO position?  Do you believe she should be barred from the professional work environment, because she no longer has a good credit report?  

Sometimes America can be strange.  Should alcoholic or drug addicted or cheating athletes, movie stars, and politicians be the only ones given second chances to pick themselves up and move forward in their lives after a big fall?

Like many long term unemployed professionals, Mollee possess the new skill sets of “doing more with less” and “making something out of nothing.”  These are abilities one would think any company would recognise as very valuable in this economy in their professional staff. 

How many times do you see “remains calm under pressure” and “innovative and creative” on a resume?  Mollee’s life resume now proves out these qualities and more in a most profound way – in her every day life struggle to survive right now.

A credit report or FICO score does not accurately reflect “who Mollee is” financially.  It only accurately reflects “what happened to Mollee” in the Great Recession.  Hopefully in 2011 employers  will keep this reality in mind when accepting applications and interviewing candidates for a position with their company.  

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