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
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.

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