Businessweek
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Five
years after the collapse of Wall Street, almost 4 million Americans are
caught in a terrible spiral: they're unemployed because they can't get a
job, and they can't get a job because they are unemployed.
Labor
With Obama, CEOs Pledge to Stop Ignoring the Long-Term Unemployed
Photograph by Joshua Roberts/Bloomberg
President Barack Obama meets with chief executive officers in Washington on Jan. 31
Five
years after the collapse of Wall Street, almost 4 million Americans are
caught in a terrible spiral: they’re unemployed because they can’t get a
job, and they can’t get a job because they are unemployed. The
long-term unemployed now make up 37.7 percent of the total jobless
population, according to a White House report out today on “the worst
legacy of the Great Recession,” including 2.6 million people who have
been looking for work for a year or more.
Part of the reason for
this is active discrimination by some employers, who automatically
screen out applicants who aren’t currently working. President Barack
Obama, as part of a set of actions following his Jan. 28 State of the
Union address, issued an order to federal agencies to end such practices
after a meeting today at the White House with 23 private-sector executives, who pledged to do more to hire the long-term unemployed.“It’s a cruel Catch-22,” Obama said from the White House after the meeting. “The longer you’re unemployed, the more unemployable you may seem. This is an illusion, but it’s one that, unfortunately, we know statistically is happening out there.”
More than 300 companies have signed on, including Apple and General Motors. Chief executives listed as attending today’s meeting include several from the finance world—such as BlackRock’s Larry Fink, Morgan Stanley’s James Gorman, Bank of America’s Brian Moynihan, and U.S. Bancorp’s Richard Davis—as well as from Boeing, Marriott, and Walgreen.
Corporate profits are at record levels, having soared 178 percent since their 2008 trough, as this chart shows:
Meanwhile, the national unemployment rate has only ebbed to a still-elevated 6.7 percent. That figure does not include Americans determined to not be actively searching for jobs—many of them discouraged by the pernicious psychological loop of not working. “Over time you can have negative feedback where it gets hard and harder for folks to get back in the game,” Obama said “That can have a long-term impact, especially if it’s early on in a young person’s career.”
Long-term unemployed Americans are defined as those who have gone 27 weeks without a job. The category is improving unbearably slowly, Bloomberg Businessweek’s Matthew Philips wrote Jan. 30, with the average duration of unemployment now at 37.1 weeks, down from 38 weeks at end of 2012. It’s not a pretty picture:
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