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Monday, July 01, 2019

Long-Term Unemployment Elimination Act

image: jobs

As the economy approaches full employment, one of the persistent challenges remains finding jobs for those Americans who want to work but have been unemployed for a very long time. 

In May 2019, 1.3 million Americans fell into this category, which means they have been unemployed for more than six months and that does not even include all the people who had been looking for a job and then dropped out of the labor market altogether. Long-term unemployment can lock workers out of the job market, as research shows that employers are less likely to hire applicants with long gaps in their work history.
- Long-Term Unemployment Elimination Act

New Bill Will Get the Labor Market Running on All Cylinders

Mark Paul and Dean Baker
The Hill
June 28, 2019

For years, economists have been saying that were at, or “awfully close” to, full employment. The most recent numbers put the headline unemployment rate at 3.6 percent - the lowest rate we’ve seen in nearly 50 years. This is welcome news.

Relatively low unemployment means there are far fewer people looking for work who can’t find it. But low unemployment doesn’t affect everyone equally. When the unemployment rate dips to low levels, the people who benefit the most are those who have been at the back of the queue - black workers, Hispanic workers, immigrants and other disadvantaged workers in the labor market.

If we go back just five years, when the overall unemployment rate was 6.3 percent, the unemployment rate for blacks was 11.4 percent. Today, it is 6.2 percent, a drop of 5.2 percentage points. While this is still far higher than we should accept, it does represent progress.

The benefits of low unemployment go beyond just allowing more people to get jobs. It also gives more bargaining power to those workers who have jobs. We have seen this impact, as wages have at least modestly outpaced prices for the last four years, allowing workers at the middle and the bottom to see gains in living standards; though its barely putting a dent in the decades of stagnant wages for most workers.

According to the predictions of Federal Reserve officials a few years ago, these levels of unemployment were simply unsustainable. Importantly, this highlights a long and ongoing battle within the Fed over just how low unemployment can go if we are to avoid spiraling inflation.

Historically, the Fed has chosen to prioritize stable prices over full employment, resulting in decades of persistently weak labor markets that force millions of workers to remain idle.

But in this recovery, these economists were beaten back. This was in part due to pressure from groups like the grassroots labor and community coalition Fed Up, and, in part, the result of then-Fed Chair Janet Yellen’s willingness to hold off on rate hikes until there was actual evidence of inflation, which remains below the Feds target.

With these data points in mind, it would be easy to think that the labor market is running on all cylinders. But it’s not. Many groups of workers are still struggling to find employment and decent wages.

Nearly one-in-four unemployed workers have been out of a job for at least 27 weeks. These 1.3 million long-term unemployed workers, plus the millions of other people who have dropped out of the workforce or are underemployed, highlight the failures of the labor market.

Thankfully, some in Washington have been paying attention. Last week, Sen. Chris Van Hollen (D-Md.) and Sen. Ron Wyden (D-Ore.) introduced the Long-Term Unemployment Elimination Act.

The bills aim is simple: Put an end to long-term unemployment. Importantly, the bill would provide much-needed funding to generate real job opportunities for the long-term unemployed through new mandatory federal funding to local workforce development boards and community-based organizations.

The jobs, which would last a year on average, will not only provide non-poverty wages to workers but will also provide the necessary wrap-around services to ensure success. This will help workers overcome some barriers to employment including transportation and childcare costs.

Targeted job creation, rather than tax cuts, which are the oft-proposed Republicans’ answer to such economic challenges, has a proven track record. First, instead of relying on the myth of trickle-down economics, programs such as these provide funding to employ all workers affected by long-term unemployment.

Importantly, the legislation also includes the millions who have been out of work for at least 27 weeks but aren’t counted in the official unemployment statistics.

Many will argue that now is not the time for such measures. After all, the economy is running hot. But they’re missing the big picture.

First, by putting in place the Long-Term Unemployment Act during a relatively strong labor market, the program will have a bit of time to get up and running. Second, by scaling up the program now, itll be ready to quickly ramp up when the next recession comes, which it inevitably will.

Democrats can decry Trump and the Republican party all day, but they need to take concrete steps to show workers that they can offer an economy that works for all.

As 2020 presidential candidates start offering their economic messages, we’ve seen many of them get behind the idea of a job guarantee. This program is no job guarantee, but it takes important steps toward ridding our economy of unnecessary unemployment that is costing not only economic output, but peoples lives.

Mark Paul is an assistant professor of economics at New College of Florida and a fellow at the Roosevelt Institute. Dean Baker is senior economist and co-founder of the Center for Economic and Policy Research.

SOURCE

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Long-Term Unemployment Elimination Act

By Senator Chris Van Hollen
June 2019

Long-Term Unemployment Elimination Act

There is no question that we have made important progress in rebuilding our economy since the Great Recession of 2008. But instead of helping forgotten men and women, President Trump and the Republican Congress have trained their sights on helping the biggest corporations and the very wealthy above all else. Senator Van Hollen believes there is a critical group being left behind: over one million Americans who are long-term unemployed. He is teaming up with Senator Wyden to introduce an innovative federal program that would generate real job opportunities for people who have been unemployed for six months or more, getting them back on their feet and into the workforce. 

The Problem: Too Many Men and Women Left Behind by the Economic Recovery

As the economy approaches full employment, one of the persistent challenges remains finding jobs for those Americans who want to work but have been unemployed for a very long time.  In May 2019, 1.3 million Americans fell into this category, which means they have been unemployed for more than six months and that does not even include all the people who had been looking for a job and then dropped out of the labor market altogether. Long-term unemployment can lock workers out of the job market, as research shows that employers are less likely to hire applicants with long gaps in their work history. 

This group of jobseekers cuts across all communities, ages, ethnicities, and occupations. In 2018, for example, 56 percent of long-term unemployed workers were younger than age 45, while the remaining 44 percent were 45 and older. Long-term unemployment is linked to lower wages for workers - even years after they do find a job and it reduces the economic potential of the entire U.S. economy.

Because of the normal churn in the economy, there will always be some unemployment. But the long-term unemployment rate should be near zero. This plan takes direct action to achieve that goal.

The Solution: Focused Funding to Create Jobs and Support Workers The Long-Term Unemployment Elimination Act recognizes the transformational power of work. It would provide targeted funding to local areas to generate work opportunities and get these Americans back into the workforce.

- The jobs would generally exist for one year. This would provide enough time to accomplish valuable work and build solid experience, and could be extended for an additional year to support apprenticeships and other on-the-job training. The jobs could be at a private business, a non-profit, or a government agency.

- With mandatory federal funding, the program can grow large unemployed and wants to participate. The plan is designed to address long-term unemployment under all economic conditions - the program will expand during periods of high unemployment.

The legislation provides supports to help people overcome the barriers keeping them out of the workforce such as transportation, childcare, job readiness training, substance abuse treatment, or assistance finding a permanent job - and training programs that build skills to sustain permanent employment.  Instead of the work requirements being pushed by Republicans which strip access to health care, food, and housing without creating a single job - this project would match the people who are looking for work with a job. 

The bill also provides competitive grants to local areas to support innovation and investment in areas hit hardest by high poverty and chronic joblessness, which would give additional flexibility and support in the places where it is needed most. These grants would support locally-driven development, worker-owned enterprises, and other strategies to ensure that area residents are part of the process and benefit from the results.

The Pay-For: Eliminating Tax Breaks for Shipping Jobs Overseas

The new Republican tax law creates incentives for corporations to locate production abroad and ship jobs overseas. By imposing a true minimum tax on foreign profits, we can keep jobs right here at home and fully fund this plan to tackle long-term unemployment.

Senator Van Hollen has joined with Senator Whitehouse to introduce the NO TAX BREAKS FOR OUTSOURCING ACT, and joined with Senators Klobuchar and Duckworth to introduce the REMOVING INCENTIVES FOR OUTSOURCING ACT. President Obama’s minimum tax proposal is a third option, and this policy would have raised roughly $300 billion over 10 years.

SOURCE

Posted by Elvis on 07/01/19 •
Section Dying America • Section Workplace
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