On Friday morning, another closely watched jobs report will tell us the number of new positions the economy has (or has not) created. That top-line figure usually receives most of the attention and news headlines. But buried within the data is a far more worrisome figure: the number of people out of work for more than six months. In February 2014, that statistic topped 3.8 million Americans, down from a high of 6.7 million in April 2010.
Known as the long-term unemployed, these individuals have largely exhausted their unemployment-insurance benefits. One economic study shows that employers discriminate against them even if they have the same skills and experience as other applicants. Worse, new research out of Princeton estimates that the long-term unemployed have just a 1-in-10 chance of returning to the labor market in any given month. In other words, it's a huge, well-identified problem for which lawmakers have presented few solutions.
But, solutions do exist, developed in the warrens of D.C.'s think tanks or demonstrated by successful programs in states and other countries. As we await the newest jobs numbers, National Journal rounded up the best ideas for reconnecting the long-term unemployed to the labor market.
DON'T LAY OFF WORKERS IN THE FIRST PLACE. If employers can afford not to lay off workers during an economic downturn, it's obviously a huge boon for the workers. They don't have to worry about cutting household expenses, watching their skills atrophy, or landing a new gig. Programs in Germany and Canada and in 27 states including Rhode Island have managed to keep people on the job during recessions through something called "work-sharing." The idea is to take government funds (such as unemployment benefits) and use the money to pay a portion of workers' salaries for a set period of time. This saves the company the resources it needs to survive a financial hit by temporarily trimming its payroll, while keeping workers in place. Best of all? It's a plan extolled by both liberal and conservative wonks.
GIVE THE LONG-TERM UNEMPLOYED MONEY TO MOVE. Economist Michael Strain of the right-leaning American Enterprise Institute has put forth some of the most provocative, thoughtful ideas on tackling the employment problem. Among them: Give the long-term unemployed subsidies to help them relocate to states with more-lucrative local economies and more job opportunities. As Strain writes, "Relocation subsidies would help even those unemployed workers who choose not to move. If a significant number of unemployed workers leave a city, then the odds of landing a job go up for those who stay, because there are fewer job applicants for every vacancy."
CREATE A GOVERNMENT JOBS PROGRAM OR GIVE BREAKS TO EMPLOYERS THAT HIRE. Remember the Works Progress Administration, one of President Roosevelt's New Deal programs from the 1930s and 1940s that put more than 8 million Americans to work, building bridges, roads, and public parks? Developing a similar program would give people temporary work and repair some of the country's crumbling infrastructure. Or, what about giving tax breaks or other incentives to companies that hire people who have been out of work for more than six months? This would financially incentivize employers to consider individuals they might not otherwise interview for an open position.
JOB TRAINING FOR WORKERS, GEARED TOWARD GROWING INDUSTRIES. Back in January, National Journal highlighted a few corporate and not-for-profit programs that do a good job of connecting hard-to-place workers with growing industries such as tech and energy. The lessons in their approaches could aid the long-term unemployed. One California power company, for instance, created its own in-house training program after it faced a major shortage of highly skilled laborers; it recruits from pools of people such as veterans, who may have a harder time reconnecting with the job market. Similarly, the New York nonprofit Workforce Opportunity Services trains people without college degrees (who face higher levels of unemployment than college graduates) for corporate IT jobs.
SMARTER CAREER PLANNING. Finally, the Great Recession caused the United States to shed jobs in industries like manufacturing that may never rebound to their previous employment levels. This potentially permanent loss has made economists and educators rethink the front end of a person's career. It makes sense to steer people to growing industries instead of ones that could disappear in a few years or even a decade. Recent economic papers extol the value of apprenticeships for people less interested in college, as a way to prepare them for highly skilled labor positions. Paid summer work experience for teens at real companies—and not just in fast-food or retail—helps prepare people for real-world jobs by giving them soft skills. Finally, economists like Andrew Sum argue for more-robust career counseling for young people to help them chart more successful and realistic careers paths. States like South Carolina offer this, according to a recent paper by Sum, to kids as young as middle-school students, to begin to prepare them for the country's new rough-and-tumble job market.
This article appears in the April 4, 2014 edition of NJ Daily.
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