Obama's Former Economic Chief: Only 1 in 10 Long-term Unemployed Gets Hired

Obama's Former Economic Chief: Only 1 in 10 Long-term Unemployed Gets Hired

As the debate over a $9 billion, five-month unemployment insurance extension heats up on Capitol Hill, a new study by President Barack Obama’s former Chairman of the White House Council of Economic Advisers, Alan Krueger, finds that just one in 10 long-term unemployed workers now finds a new job every year. 

“The longer people are unemployed, the more challenges they face,” Krueger told CNBC. “Employers are less likely to call them in for interviews. They grow discouraged. Their skills grow obsolete. They become more isolated, more disengaged.” 

The Obama economy has been especially harsh on the long-term unemployed. According to the Bureau of Labor Statistics, as of Feb. 2014, 3,849,000 Americans had been jobless for 27 weeks or more. The government says 10.5 million are unemployed, a figure that merely reflects the number of people still seeking employment and not the millions more who have exited the labor force.  

Krueger’s study, which was coauthored with two of his Princeton University economist colleagues, shows how the rapid rate of technological change and employer perceptions about those whose resumes contain long employment gaps can cast a grim jobs outlook for those who stay outside the job market for long stretches.

Democrats and the White House have argued that taxpayers should be required to pay for even more long-term jobless benefits. However, as even Krueger’s past research has demonstrated, the longer a person remains out of the workforce, the less time they devote to looking for a new job. 

“Interestingly, the only activity that significantly increases with duration of unemployed is sleep,” concluded Obama’s former economic chief Krueger in a 2011 study.

Whether opponents will use Krueger’s past research to explain why asking taxpayers to pay $9 billion, as a new Senate jobless benefits plan proposes, is counterproductive to reducing long-term unemployment, remains to be seen. 

A Senate vote is expected this week on the plan drafted by Sen. Jack Reed (D-RI) and Sen. Dean Heller (R-NV).