Obama Tells Big Business: Hire America’s Long-Term Unemployed
In a week dominated by President Barack Obama’s State of the Union address, which underlined his commitment to expanding the opportunities of the middle class and putting America’s jobless back to work, the country’s long-term unemployed have been put in the spotlight. Not only did he call for for Congress to “restore the unemployment insurance you just let expire for 1.6 million people,” but on Friday the president pressured big business and the federal government to hire greater numbers of long-term unemployed Americans.
Nearly eight million jobs were lost during the December 2007 through June 2009 recession — the greatest economic downturn in U.S. history since the Great Depression. In recent months economic reports indicated the economic recovery has picked up; gross domestic product expanded at a 3.2 percent annual rate in the fourth quarter following the third quarter’s 4.1 percent increase, the manufacturing sector has rebounded, and the stock market reached recorded highs last year. While the housing market has recently hit headwinds, with rising prices hurting demand, throughout much of last year, low-interest rates and pent up demand propelled home sales and boosted the construction industry, which in turn strengthen GDP. With the economic recovery taking small steps forward, job creation grew stronger toward the end of 2013, which gave consumers more confidence to increase their outlays.
But, even with these economic gains, the tough problem is the lingering high numbers of long-term unemployed and the low labor market participation rate. As the White House stated in its long-term unemployment fact sheet, even though businesses have added 8.2 million jobs over the past forty-six months, the “remaining legacy of the recession is the crisis of long-term unemployment.” The problem is that hiring a new employee who currently works in the field is a far less risky choice than a worker who has been out of a job for months or even years, especially as businesses are still hesitant about the economy. “If you’re not working — and you’re not improving your credentials — it’s harder to find a job. That’s just simply reality,” Naroff Economic Advisors chief economist Joel Naroff told CNBC.