REASONS FOR UNEMPLOYMENT OF UNEMPLOYMENT INSURANCE CLAIMANTS

Louis F. Buckley Loyola University, Chicago

A j o i n t survey by Loyola University of Chicago and the I l - l ino is Bureau of Employment Security was undertaken to determine why workers lost thei r jobs and continued to be unemployed during a "peak" prosperity (Apr i l , 1969) period in Chicago when the un- employment rate was at the re la t i ve ly low level of 2.3 percent.

Over hal f (55 percent) of the unemployed workers studied had lost their jobs because of business conditions, despite the very favorable economic climate in Chicago at the time. These busi- ness-related reasons for separation involved lack of orders, plant closings and relocations, or seasonal conditions. Technological displacement accounted for less than one percent of a l l separa- t ions. Beneficiaries who had worked for more than one year for the i r last employer experienced separations due to business con- dit ions at a re la t i ve ly higher rate than they were represented among al l study beneficiar ies. Older workers showed a re la t i ve ly high incidence of separations because of plant closings or relo- cations.

About one-fourth of those studied were separated from their last employment because of conditions relat ing to thei r work. Seven out of ten of these work-related reasons involved the f a i l - ure of the worker to comply with employer rules or policy on mat- ters such as tardiness, absences, wage assignments or disagree- ment with the employer. Other work-related reasons included f ight ing or misconduct, wages, hours, or working conditions and transportation problems. The unemployed who were better educated and who had earned higher wages had a re la t i ve ly higher incidence of separation due to work-related conditions.

Twenty percent of the unemployed had lost the i r jobs because of reasons related to the claimant, such as health, age, person- a l i t y , appearance, lack of motivation, retirement, lack of s k i l l or experience, personal and domestic circumstances and pregnancy.

The workers who remained unemployed for f i f teen weeks af ter f i l i n g thei r i n i t i a l claims (458 of the or iginal 1628 claimants) were interviewed to determine the reasons for the i r continued un- employment. I t was found that three-fourths of these unemployed workers continued to be unemployed because of worker-related rea- sons. The i n a b i l i t y of the worker to meet job requirements, such as age and s k i l l , constituted the most important work-related reasons for continued unemployment. While lack of s k i l l or ex- perience was the cause of job loss for less than 3 percent of the

study beneficiaries, i t was the reason for continued unemployment of 18 percent of those s t i l l drawing benefits at the time of the f inal interview. Business conditions, the most important being seasonal, accounted for 16 percent of the reasons for continued unemployment.

Workers who were s t i l l unemployed 15 weeks af ter f i l i n g thei r i n i t i a l claims were in the main older in age, female and white. Negroes comprise 55 percent of the surveyed group at the time of the f i r s t interview, but over 47 percent at the f inal in- terview. This would seem to indicate that the black worker either returns to employment, or at least discontinues drawing benefits, sooner than his white counterpart.

One factor which appearedthroughout the analysis was the age of the worker involved. Although not an important overall reason for separation, age was evident in the analysis of separations due to business-related conditions, which tended to become more impor- tant as the age of the beneficiary increased. Age was the most important single category explaining continued unemployment. Em- ployers l is ted age as the most important reason that would cause d i f f i c u l t y for unemployed workers to f ind new jobs.

Lack of education, which is often stressed in relat ion to un- employment, was given as the primary reason for loss of job by only one of the 1628 study beneficiaries and by no employer. Lack of education, however, was found to be the principal reason for continued unemployment for 5 percent of those who had been unem- ployed for 15 weeks and was the percentage given by employers as the most important reason that would cause d i f f i c u l t y for these beneficiaries in finding a new job. Simi lar ly , lack of s k i l l or experience accounted for only 2.6 percent of separations but was the principal reason for continued unemployment for 18 percent of the claimants who had been unemployed for 15 weeks.

An analysis was made of the extent of the services rendered by the employment service to the unemployment insurance benefici- aries who had been unemployed for 15 weeks. Only 5 percent of the beneficiaries were c lassi f ied as human resources development cases (involving low family income and disadvantaged status j , while one-third of a l l employment service applicants in the area were so c lass i f ied. I t was evident, therefore, that the employ- ment service was not adequately staffed to meet thei r p r i o r i t y obligations to human resource development cases as well as to adequately service others, including unemployment claimants. State employment security agencies are experimenting with pro- grams to provide more guidance to unemployment insurance claim- ants with respect to the i r problems in securing reemployment. A representative of the Canadian Minister of Labor, who is working on this problem, advised that this study w i l l be of substantial aid in structuring thei r Claimant Assistance program.

(Single copies of the report w i l l be made available at no cost to members of the ASE i f requests are sent to Louis F. Buckley, Professor of Economics, Loyola University, 820 North Michigan Avenue, Chicago, I l l i n o i s 60611.)