When a trend is not a trend

Outrage is in the air over concerns that companies are hiring only those who currently have jobs. Apparently, the nation is littered with “Unemployed need not apply” signs hanging from storefronts.
 
Advocacy groups argue that these affronts to human dignity have to go – and that new government regulations are the only way to protect out-of-work jobseekers. Taking their cue, Rep. Rosa DeLauro (D-Conn.) introduced legislation that makes it illegal for employers to discriminate against those without a job, and President Obama has even included the measure in his proposed American Jobs Act.
 
How did we get to the point where the problem became so serious and widespread that only onerous government intervention could solve it? Perhaps more importantly: Are we even actually at that point?

 
In all likelihood, the concern can be traced back to a single news story. After relocating its headquarters, a mobile phone company announced they were looking for new employees and that “no unemployed candidates [would be] considered at all.” The story rocketed around the blogosphere and cable news, generating outrage.
 
A hearing before the Equal Employment Opportunity Commission (EEOC) followed, where the National Employment Law Project (NELP) made hay of this anecdote and a few others. Stories in The New York Times and elsewhere—all citing a handful of similar examples—helped to create a larger echo chamber. In July, it reached a fever pitch when the NELP issued a report highlighting 150 employment ads over a one-month period that “included exclusions based on current employment status.”
 
News articles and editorials on the subject were deliberately vague, using weasel words like “numerous” or “many” employers who engaged in such a practice. But few stopped to consider whether or not a handful of incendiary anecdotes and the 150 advertisements cited by NELP actually constituted a trend.
 
Indeed.com—one of the four major job search websites—keeps tracks of the average number of online job postings per month, and during March 2010, there were some three million postings. Assuming that roughly the same number was posted in March of this year (when NELP completed their study), the 150 offending ads would comprise only .005 percent of the universe of job posts–hardly an epidemic.
 
That accepts NELP’s count at face value, however. There’s reason to suggest that’s unwise.
 
For instance, Kelly Services, one of the companies cited by NELP, publicly disputed the characterization of the following ad: “Currently employed but lacking growth in terms of responsibilities and technical proficiencies? If so, Kelly IT Resources-St. Louis wants to talk to you!” NELP highlighted the words “currently employed” but left out the rest.
 
Is targeting the currently employed the same as forbidding the unemployed to apply? Obviously not. How many more examples cited by NELP are similarly questionable?
 
No matter: The push for government regulation has begun. In addition to the bill introduced by Rep. DeLauro, NELP and others have argued that this is a matter for the EEOC to address since this trend they’ve identified must be having a disproportionate impact on minority groups. (Talk about jumping to conclusions.)
 
This is a classic example of a story that’s too good to be false — it makes for such great newspaper copy and radio segments that people lose interest in a sober consideration of whether a problem actually exists.
 
It’s a phenomenon we see frequently in debates about the labor market. For instance, we’re told that minimum wage earners are “stuck” at that wage — despite research showing that most receive a raise 1-12 months after starting their first job. 

We’re assured that no one will lose a job or hours when wage mandates increase or businesses are forced to provide paid sick leave – despite a majority of economic studies demonstrating the former and on-the-ground evidence proving the latter.
 
Media-savvy advocacy groups understand the spin cycle, and exploit it. But the appropriate response to over-hyped reports and press releases isn’t more regulation, more taxes, or new mandates—it’s a deep breath and a grain of salt.
 
Michael Saltsman is a research fellow at the Employment Policies Institute.
 

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