Don’t Give Up on the Long-Term Unemployed

Solutions exist to help those who have been out of the workforce for long periods. Why aren’t we trying them?

OAKLAND, CA - JULY 11: A protester holds a sign during a demonstration against unemployment benefit cuts on July 11, 2012 in Oakland, California. Dozens of protesters with the group Union of Unemployed Workers staged a demonstration to protest cuts in unemployment benefits.
National Journal
Nancy Cook
Add to Briefcase
Nancy Cook
April 3, 2014, 7:19 a.m.

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.

What We're Following See More »
ANOTHER GOP MODERATE TO HER SIDE
John Warner to Endorse Clinton
16 minutes ago
THE LATEST

"Democratic presidential nominee Hillary Clinton will score another high-powered Republican endorsement on Wednesday, according to a campaign aide: retired senator John Warner of Virginia, a popular GOP maverick with renowned military credentials."

Source:
AUTHORITY OF EPA IN QUESTION
Appeals Court Hears Clean Power Plant Case
24 minutes ago
THE LATEST

The U.S. Court of Appeals for the District of Columbia Circuit on Tuesday "heard several hours of oral arguments" over the Environmental Protection Agency's Clean Power Plan rules. The 10-judge panel "focused much of their questioning on whether the EPA had overstepped its legal authority by seeking to broadly compel this shift away from coal, a move the EPA calls the Best System of Emission Reduction, or BSER. The states and companies suing the EPA argue the agency doesn’t have the authority to regulate anything outside of a power plant itself."

Source:
$28 MILLION THIS WEEK
Here Come the Ad Buys
36 minutes ago
THE LATEST

"Spending by super PACs tied to Donald Trump friends such as Ben Carson and banker Andy Beal will help make this week the general election's most expensive yet. Republicans and Democrats will spend almost $28 million on radio and television this week, according to advertising records, as Trump substantially increases his advertising buy for the final stretch. He's spending $6.4 million in nine states, part of what aides have said will be a $100 million television campaign through Election Day."

Source:
UNLIKELY TO GET A VOTE, LIKELY TO ANGER GOP SENATORS
Obama Nominates Ambassador to Cuba
4 hours ago
THE LATEST
GOP REFUSED VOTE ON FCC COMMISIONER
Reid Blocks Tech Bill Over “Broken Promise”
4 hours ago
THE DETAILS

Monday night's debate may have inspired some in Congress, as Senate Minority Leader has decided to take a stand of his own. Reid is declining to allow a vote on a "bipartisan bill that would bolster U.S. spectrum availability and the deployment of wireless broadband." Why? Because of a "broken promise" made a year ago by Republicans, who have refused to vote on confirmation for a Democratic commissioner on the Federal Communications Commission to a second term. Harry Reid then took it a step further, invoking another confirmation vote still outstanding, that of Supreme Court nominee Merrick Garland.

Source:
×