A new jobs program for people trapped in unemployment

Meet the new underclass -- the four million Americans who have been unemployed for more than a year. With every additional week out of work, their chances of finding a job dwindle. It turns out that many employers don't want to hire the currently unemployed. Enter Joe Carbone , who is determined to return the American dream to the long-term unemployed in Connecticut. And he's succeeding, one job at a time. How's Carbone doing it? Scott Pelley reports.

The following script is from "Trapped in Unemployment" which aired on Feb. 19, 2012. Scott Pelley is the correspondent. Henry Schuster and Rachael Kun, producers.

We've seen some improvement in the job market lately. But there's something stubborn about unemployment. Never in the last 60 years has the length of joblessness been this long. Four million people, a full third of the unemployed, have been out of work more than a year. They've been severed from the workforce. Ben Bernanke, chairman of the Federal Reserve, calls it "a national crisis." To understand what's happening, we went to Stamford, Conn., to see an experiment that might just offer a way back for Americans trapped in unemployment.

Frank O'Neill: They started to go through round after round of layoffs. And I got caught in one of the layoffs there.

The Great Recession arrived early for Frank O'Neill.

Frank O'Neill: It was a cold day in February.

It was February 2008. O'Neill was a credit consultant for an IT company.

Scott Pelley: What happened?

O'Neill: They called me into the vice president's office. And he basically told me that they were having some financial difficulty and told me that my last day was gonna be that day. I got a small little severance out of it and was off into the world of the unemployed.

Pelley: What have the last three years been like for you?

O'Neill: You have those moments where you're the only one in the house and you're sitting in front of the computer looking for a job and you go, "When's this ever gonna break for me?"

Pelley: How many people signed up for unemployment? Everybody.

No one we met in Stamford expected to be out of work this long.

Pelley: How many have run to the end of the unemployment benefits? Everyone.

Those unemployment benefits end after 99 weeks. These folks have been out of work two years, three, even four. They're college educated professionals in their forties or fifties; people who thought their company would take them all the way to retirement.

Pelley: Vernon?

Vernon Downes: I was very angry. I was very bitter. I was fed up with society, the corporate world, the lies, deceit, the greed.

They don't look it, but they've fallen out of the middle class. Turned in cars, gone on food stamps, taken kids out of college and faced foreclosure. Now, they've pinned their last hopes on Joe Carbone.

Joe Carbone: The word carnage is a strong word, but I can't think of a better word in this case. What aggravates me is that there isn't outrage. We ought to be angry. We ought to be giving every moment of our time figuring out how we're going to restore for them the American dream.

Joe Carbone is president of something called The Workplace. It's the state unemployment office in southwest Connecticut where people get job training and placement help. Carbone has a reputation for innovative job programs, but he has never seen so many people out of work so long.

Carbone: There is no comparison to being unemployed for six months and being unemployed for 99 weeks. Your needs change in a drastic way.

Pelley: And what is the change?

Carbone: The change is the mind. That two years of unemployment erodes your self-confidence, your self-esteem. It separates you from your profession, your education, whatever you might have done previously. There's all sorts of things. It causes divorces. It causes problems with children.

What's insidious is how hidden these people are. Carbone's territory has some the richest towns in the nation. The commuter lines are arteries to the heart of corporate power in New York. But a lot of people walking around in suits haven't had a job in years.

Carbone has more than 12,000 who have spent their last unemployment check with nowhere to go.

Carbone: I can't tell you how this bothers me. I can't tell you what this has done to me. It's not just the numbers. It's-- Scott, it's the stories that you've heard.

This is how Joe Carbone intends to restore their American dream. He calls it Platform to Employment. It's a half million dollar program that he raised the money for from businesses and charities. We went along for five weeks as a class of 28 learned how to claw their way back to employment.

Vernon Downes: I was so ashamed to reach out for help because I felt discouraged. I felt ashamed that I had failed.

Vernon Downes was a project manager for a company that made medical devices. He's been working to find a job for two and a half years.

Downes: I've done everything that I was told to do, the education, the certification, and I still couldn't get a job.

He's on food stamps, found work with a landscape company, and was glad to get it.

Downes: So then I said, "Okay if I have to do leaf blowing to get some sort of an income, I'm willing to do that and that's what I'm doing and that's how I get by day to day.

Pelley: Did any of you wonder whether you were the only one?

Group: Yeah. Absolutely.

Diane Graham: It was a very isolating experience for me.

Diane Graham was an executive assistant. For three years she's been scraping together part time work. But she's on food stamps and she had to move in with her sister.

Graham: I was possibly looking at homelessness. So I was terrified.

[Instructor: Our goal objective of Platform to Employment, P2E, is to reconnect you to the workforce.]

They're in class four days a week and the very first thing they learned was to confront their fears and depression.

Graham: For me it's been just debilitating fear that I won't be able to take care of myself.

[Instructor: The resume. The resume very soon will become an obsolete tool in the job search process.]

They were introduced to how much has changed since the last time they got a job.

[Instructor: When they're considering hiring you for a job they're going to go to the Internet and see what comes up. If you have nothing that shows up, you're not relevant.]

They practiced job interviews.

[Mock interviewer: I'm noticing a gap Frank, it's looking really good up until about 2008 so could you give me a little explanation about what happened there.]

And they learned to navigate the new bias, the unspoken reason they've been turned down again and again.

Pelley: Did you ever have the sense that you and others were being discriminated against because of how long you'd been unemployed?

O'Neill: There's no doubt. I mean, I've seen it in print, whether it's some newspaper ads or online during those types of advertisements, I've actually seen, "If you are unemployed, you need not apply."

Just look at the web. You see the phrase everywhere: "Must be currently employed." Businesses can't legally discriminate by age, race or sex, but there's a new minority group now, the long term unemployed.

Pelley: Everybody knows we're in a terrible state in this country. Why would a stigma attach to being unemployed for a year or two or three?

Carbone: There's a sense that if a person's out of work for a year or longer, they might be lazy. They might very well be people that would prefer to be home. Or they've lost too much already to be useful to me. It's unfair, and it's wrong.

Platform to Employment was a little like boot camp.

[Instructor: There's hundreds of social media sites, but LinkedIn, it's the number one for anything professional.]

And, over time, we saw something new, confidence.

Downes: What the program has done for me, it brought Vernon back. I know who I am. I know this is the Vernon that I know. That other person, for the past post-2009, I didn't know who that was. So I'm back. I'm back in the game.

O'Neill: I was so prideful and so stubborn that I would not apply for part-time positions, I wasn't going to go work at the grocery store nearby, I wasn't going to go flip burgers. I have a college education. I've been successful at work. I've been working for 30 years. I'm not doing this. So when this opportunity for Platform to Employment came along, I joined it and it changed my mindset.

After the classes, Platform to Employment opens the door on its biggest innovation - it's an internship with a business that's looking to hire.

Pelley: Tell me what the first day was like walking through the door.

O'Neill: It was nice to be a part of the workforce, having to go to work in the morning. Rather than get up in the morning and go look for work.

Here, the office intern isn't a college student, he's 50-something, educated and experienced. For eight weeks, Frank O'Neill would work at Cain Management which owns fast food restaurants. Platform to Employment pays O'Neill's salary.

Pelley: What do you have to prove and how do you think that's gonna work out?

O'Neill: They told me right off the bat. We have a job. And it's gotta get done. And you need to prove yourself that you're the person who can get this job done for us.

Pelley: Fair enough.

O'Neill: Absolutely. All we're looking for is an opportunity.

One hundred people are enrolled in Platform to Employment, and after five months 53 have jobs. Vernon Downes found work in his field, information technology, at a company called Career Resources. Diane Graham got a call. After three years, of hearing "no" she'd didn't know how to respond to "yes."

Diane Graham: The manager called me. You know, he gave me the brief details. "We'd like to have you onboard. Like to start Monday?" And I really froze on the phone. And I think he sensed it. Because he said to me, "You know, you take few minutes to think about it and call me back." And I-- and when I hung up the phone, I'm like, "Is-- are you crazy? What do I have to think about?" I was just really, really in shock. I was not expecting it all.

She's working at Lex Products that makes power systems for industry.

Diane Graham: Being in the hustle bustle of everybody going to work. I missed that. I truly missed it.

Pelley: It's not just about a paycheck.

Diane Graham: No. No. No. Wherein in the past it might have been, but this has become about my dignity.

At the end of his internship, Frank O'Neill heard from the boss.

Pelley: You just got a new job.

O'Neill: Yes, I did. Brings a smile to my face.

Pelley: I see that.

Pelley: Where do you see yourself three months from now? Employed?

Group: Yeah. Yes. Yes.

Pelley: Yes? Oh, everybody.

On graduation day, there was quite a change in the people that we first met that first day in class. Joe Carbone hopes his experiment might be a model for the other four million and counting whose lives have been broken by the Great Recession.

Pelley: I wonder if you have a message to all of those people, the 38,000 people a week who join this group who've run out of their unemployment checks and still have no prospects?

Carbone: I can't promise people jobs, but I can promise that we've taken a big step. And the steps will continue. I want them to know that help is on the way. We're not gonna stop until the issue is addressed in a fair and honorable, honest and American way.

For more information on the impact of long term unemployment on workers and their families, you can look at the studies conducted by the Heldrich Center at Rutgers University.