[Senate Hearing 112-541]
[From the U.S. Government Publishing Office]
S. Hrg. 112-541
MISSED BY THE RECOVERY: SOLVING THE
LONG-TERM UNEMPLOYMENT CRISIS FOR OLDER WORKERS
=======================================================================
HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC
__________
MAY 15, 2012
__________
Serial No. 112-16
Printed for the use of the Special Committee on Aging
Available via the World Wide Web: http://www.fdsys.gov
_____
U.S. GOVERNMENT PRINTING OFFICE
75-751 PDF WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001
SPECIAL COMMITTEE ON AGING
HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon BOB CORKER, Tennessee
BILL NELSON, Florida SUSAN COLLINS, Maine
BOB CASEY, Pennsylvania ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri MARK KIRK III, Illnois
SHELDON WHITEHOUSE, Rhode Island DEAN HELLER, Nevada
MARK UDALL, Colorado JERRY MORAN, Kansas
MICHAEL BENNET, Colorado RONALD H. JOHNSON, Wisconsin
KRISTEN GILLIBRAND, New York RICHARD SHELBY, Alabama
JOE MANCHIN III, West Virginia LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut SAXBY CHAMBLISS, Georgia
----------
Chad Metzler, Majority Staff Director
Michael Bassett, Ranking Member Staff Director
C O N T E N T S
----------
Page
Opening Statement of Hon. Herb Kohl, U.S. Senator from Wisconsin. 1
Statement of Hon. Bob Corker, U.S. Senator from Tennessee........ 2
PANEL OF WITNESSES
Statement of Sheila Whitelaw, Unemployed Older Worder,
Philadelphia, PA............................................... 3
Statement of Charles A. Jeszeck, Director, Education, Workforce,
and Income Security, U.S. Government Accountability Office,
Washington, DC................................................. 4
Statement of Joseph Carbone, President and CEO, The Workplace,
Bridgeport, CT................................................. 5
Statement of Diana Furchtgott-Roth, Senior Fellow, Manhattan
Institute, New York, NY........................................ 7
Statement of Christine Owens, Executive Director, National
Employment Law Project, Washington, DC......................... 9
APPENDIX
Witness Statements for the Record
Sheila Whitelaw, Unemployed Older Worker, Philadelphia, PA....... 18
Charles Jeszeck, Director, Education, Workforce and Income
Security, U.S. Government Accountability Office, Washington, DC 20
Joseph Carbone, President and CEO, The WorkPlace, Bridgeport, CT. 39
Diana Furchtgott-Roth, Senior Fellow, Manhattan Institute, New
York, NY....................................................... 44
Christine Owens, Executive Director, National Employment Law
Project, Washington, DC........................................ 59
Relevant Witness Reports
Unemployed Older Workers: Many Experience Challenges Regaining
Employment and Face Reduced Retirement Security, U.S.
Government Accountability Office............................... 74
The Old Prosper Relative to the Young: The Rising Age Gap in
Economic Well-being, Pew Social & Demographic Trends........... 164
Additional Statements Submitted for the Record
Easter Seals, Inc., Washington, DC............................... 202
MISSED BY THE RECOVERY: SOLVING THE LONG-TERM UNEMPLOYMENT CRISIS FOR
OLDER WORKERS
----------
TUESDAY, MAY 15, 2012
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 2:17 a.m., in
Room SD-562, Dirksen Senate Office Building, Hon. Herb Kohl,
chairman of the committee, presiding.
Present: Senators Kohl [presiding], Blumenthal, and Corker.
OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN
The Chairman. Good afternoon. We'd like to thank our
witnesses and at the same time welcome everyone attending
today's hearing.
While Americans were hit hard by this recession, the
ramifications for older workers are particularly severe. Once
older workers lost their jobs, they struggled far more than
other groups to find work again. In 2007, less than one in four
unemployed older workers was out of work for more than half a
year. But only four years later, more than half of unemployed
workers over 55 are confronting long-term unemployment.
As a bipartisan opinion in the New York Times over the
weekend stated, this problem is, quote, ``nothing short of a
national emergency.'' One solution that shows real potential
was developed in Connecticut by one of our witnesses here
today, Joe Carbone. He has created an innovative program called
Platform to Employment that works individually with those out
of work to ensure that they have updated skills to thrive in
today's economy. The program partners with local businesses to
place these workers into internships.
So far, 70 percent of those internships have turned into
jobs. This program shows real promise to get people back to
work and I believe it needs to be spread across the country.
However, it's also important that we look at some of the
other reasons why older workers have been kept out of work for
so long and address what we can do about it. We asked GAO to
look into the issue and it found that employers are wary of
hiring older workers, sometimes because they're concerned about
health care costs, but other times because they assume that if
one is over 55 or has been out of work then your skills are not
up to date.
GAO surveyed experts who highlighted a number of approaches
the government could take to help address this problem. One
suggested approach addressed in my Older Workers Opportunity
Act would provide tax credits for businesses employing older
workers with flexible work programs.
Another area the experts mentioned is discrimination. Today
I'm announcing my support for the Protecting Older Workers
Against Discrimination Act, a bill authored by Senators Harkin
and Grassley that is aimed at restoring the rights of older
workers to pursue claims of age discrimination.
One common theme we've heard is that older workers want to
keep working, not only because they need the money, but because
they want to remain relevant and productive members of society.
We need to encourage this. Left unchecked, long-term
unemployment among older workers is a problem that will
continue to grow as our work force grays. In only four years
from now, the Bureau of Labor Statistics projects that nearly
one in four workers will be over the age of 55. We hope this
hearing raises awareness about this growing problem and
provides some solutions to consider.
We'll now go to witness introductions. Our first panelist
today is Sheila Whitelaw, a Philadelphia woman who has been out
of work for more than two years. She has served as executive
director for three nonprofits, worked as a nanny and office
manager, and spent over a decade in the retail industry.
Next we'll be hearing from Charles Jeszeck. He's Director
for Education, Workforce, and Income Security Issues at the
U.S. Government Accountability Office. He's spent over 26 years
with GAO working on issues concerning defined benefit and
defined contribution pensions, PBGC, social security,
unemployment insurance, as well as older worker unemployment
issues.
Next we'll be hearing from Joe Carbone, who's President and
CEO of The WorkPlace in Bridgeport, Connecticut. Mr. Carbone
has developed the Platform to Employment, a public-private
partnership that provides participants with placements at local
companies. His program has been featured on 60 Minutes in a
segment titled ``Trapped in Unemployment.''
Next we will be hearing from Diane Furchtgott-Roth. She's a
Senior Fellow at Manhattan Institute for Policy Research.
Formerly Ms. Furchtgott-Roth served as Chief Economist at the
U.S. Department of Labor, as well as Chief of Staff, President
George Bush's Council of Economic Advisers.
Finally, we'll be hearing from Christine Owens. She's the
Executive Director of the National Employment Law Project. Ms.
Owens previously served as Director of Public Policy for the
AFL-CIO and founded and ran the Workers Options Resource
Center, which fought for an increase in the Federal minimum
wage.
Before we hear from our first witness, we'd like to turn to
Senator Corker for whatever comments he has.
STATEMENT OF SENATOR BOB CORKER
Senator Corker. Chairman, thank you. And I know we're
having a series of votes and thought for a moment this hearing
had been called off. So I apologize for being a few minutes
late. Thank you for being here and I appreciate your focus on
long-term unemployment among seniors. I know we have some great
witnesses here today.
I think we all recognize that long-term unemployment is
actually hitting lots of demographic groups. Obviously, we
don't want to pick winners and losers in that. But I certainly
am glad we're having this hearing and look forward to questions
and comments after. And thank you for calling it.
The Chairman. Thank you very much, Senator Corker.
Ms. Whitelaw.
STATEMENT OF SHEILA WHITELAW, UNEMPLOYED OLDER WORKER,
PHILADELPHIA, PA
Ms. Whitelaw. Good afternoon. My name is Sheila Whitelaw. I
am British by birth and, I'm proud to say, an American citizen.
I have been an executive director of three nonprofit
organizations. I have also worked as a nanny and an office
manager and have spent over a dozen years in the retail sector.
I have been promoted in many of the jobs I have had and have
never been fired. I have an impeccable work history, but now I
am out of work and no one will hire me.
I came to this country with a bachelor's degree in English
literature. I married and had two daughters. We moved from the
city of Philadelphia to the suburbs so that my daughters could
receive a great education. Once my children got a bit older, I
decided I needed to go back to work. I found a position as an
office manager and stayed for eight years.
I then worked for three nonprofit arts organizations. My
final position as executive director was cut short as my
daughter was diagnosed with leukemia. Our family moved out to
Seattle for five months so that my daughter could receive a
bone marrow transplant.
Upon returning to Philadelphia, I cared for my daughter for
another year. I was in more of a caregiving mode and at that
time I found a part-time nanny position. I stayed with the
family for four years and then decided that I missed working
with adults and found a job selling women's clothing. In my 12
years at the boutique, I worked my way up from sales associate
to manager.
But, unfortunately, in January 2010 the store lost its
lease and the owner decided not to reopen. I applied for
unemployment benefits and was approved. Then came the hardest
part of all, looking for work as an older worker. I didn't know
how long it might take to find a job, the economy was in such
bad shape. These past two years have been a complete nightmare.
I have sent out hundreds of resumes and made many cold
calls, as well as attending job fairs. I spend several hours
every single day, including weekends, searching for openings on
the Internet. I have had over 15 interviews, but rarely have I
received a response.
I gather that many employers can calculate my age by
looking at my resume or looking me up on line. Many
applications require that I put my date of birth to even submit
the forms, and I suspect I am weeded out in that process. I
have also stopped putting the date of the boutique closure on
my application for fear that employers will see how long I have
been out of work and judge me because of that.
Last summer as my unemployment benefits ran out, I had to
put my husband in a nursing home because of his increasing
inability to take care of himself with Alzheimer's. I moved to
a smaller apartment and took a position in a hotel gift shop.
The conditions were absolutely deplorable and, after finding
mice droppings in my handbag, I quit. Although the State
informed me that I might be eligible for a recent extension of
unemployment benefits, I had forfeited my eligibility because I
left the job after four days of work.
I now live on my social security and $35 a month in food
stamps. Life is exceedingly hard. I am working with a social
worker to find subsidized housing for me in the future. I can
work, I need to work, and I want to work, but that seems very
far off right now.
I didn't have any real retirement money and a small savings
accounts is almost depleted. At this point I don't expect to
retire, even if I'm able to find a job. I plan to keep working
as long as I am physically able and I am blessed to be in good
health.
Contrary to what employers think, age is just a number. My
age does not define my ability, negate my work experience, or
reduce my dedication to the job at hand.
I thank you for the opportunity to tell my story today and
I look forward to answering any questions that you may have.
Thank you.
The Chairman. Thank you very much, Ms. Whitelaw.
Ms. Whitelaw. Thank you.
The Chairman. Mr. Jeszeck.
STATEMENT OF CHARLES A. JESZECK, DIRECTOR, EDUCATION,
WORKFORCE, AND INCOME SECURITY, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE, WASHINGTON, DC
Mr. Jeszeck. Mr. Chairman, members of the committee: Thank
you for inviting me here today to discuss the labor market
experiences of older workers since the recession of 2007. The
recession has had a devastating effect on millions of workers
of all ages, resulting in lost economic growth and reduced
income and in the stress of having to seek new work simply to
pay the bills.
My comments are based on the findings of our report that
this committee is releasing today. In particular, I will focus
on the growth of long-term unemployment among older workers and
its implications for their retirement security. In summary,
while older workers are less likely to lose their jobs compared
to younger workers, it takes them longer to find new work.
Further, if they are lucky enough to be rehired they are more
likely to be reemployed at lower wages.
Regarding retirement, long-term joblessness can lead to
reduced future accruals for workers with traditional pensions,
while workers with 401[k] plans will lose contributions or may
draw down their accounts. In each instance, older workers have
less time to recoup their losses than do younger workers.
As in past recessions, the jobless rate for older workers
has been lower than for younger workers. The jobless rate for
workers age 55 and over peaked at 7.6 percent in February 2010,
compared to January 2010 peak of 10.6 percent for all workers.
However, older workers consistently suffer longer spells of
unemployment. In 2007, the median duration of unemployment was
ten weeks for older workers, compared to nine weeks for prime
age workers age 25 to 54. By 2011, the median duration for
older workers had increased to 35 weeks, compared to 26 weeks
for prime age workers. Also in 2011, over half, 55 percent, of
jobless older workers were unemployed for 27 weeks or more and
15 percent were jobless for 2 years or more.
Rehired older workers displaced from work between 2007 and
2009 also generally sustained greater earnings losses than
prime age workers. The median earnings replacement rate for
these older workers was 85 percent, meaning that on average
older workers in their new jobs earned only 85 percent of their
previous wage. This is compared to 95 percent for prime age
workers. About 70 percent of these rehired older workers
sustained some job loss, compared to 53 percent of prime age
workers.
Job loss can affect the retirement security of older
workers in many ways. For those fortunate enough to have a
traditional pension, long-term unemployment can lead to fewer
years of accruing benefits from growth in wages in service and
may prevent short-tenured employees from vesting. For those
workers with 401[k] plans, long-term joblessness can result in
lost employee and employer contributions and can lead a worker
to draw down her account balance.
In our report we analyzed a worker 55 years of age with an
average 401[k] balance of $70,000 who was unemployed for 2
years, drew down half of her account for living expenses, and
then reinstituted contributions upon reemployment. Using rate
of return assumptions from SSA, we found that she had still not
made up the losses to her account by age 62.
Such drawdowns may be fairly common. An October 2011 AARP
survey of workers age 50 and over found that nearly a quarter
said that they had used all of their savings during the past
three years.
Long-term joblessness also hurts those workers who rely
primarily on social security. Although it favors low earners,
because the social security retirement benefit formula relies
on claimant's highest 35 years of wages long-term joblessness
of a year or two could reduce their benefit. Further, long-term
unemployed workers nearing age 62 may opt to claim benefits
earlier than they would have if they had still been working.
The SSA Office of the Chief Actuary has estimated that about 6
percent, or 139,000, more older workers filed for benefits
between 2007 and 2009 than had been expected without a
recession. Claiming benefits early, particularly for life-long
low earners, can increase the risk of poverty at older ages.
Even in the best of times, a secure retirement is a
difficult prospect, especially for those workers with no
traditional pension and little retirement savings. The effects
of the recent recession illustrate how daunting that endeavor
will be for many in the years to come.
That concludes my statement, Mr. Chairman. I will be happy
to answer any questions you or other members may have.
The Chairman. Thank you very much, Mr. Jeszeck.
Mr. Carbone.
STATEMENT OF JOSEPH CARBONE, PRESIDENT AND CEO, THE WORKPLACE,
BRIDGEPORT, CT
Mr. Carbone. Thank you, Senator Kohl and Senator Blumenthal
from Connecticut for joining us. I'm going to summarize my
written testimony--I'm going to be summarizing my written
testimony that I gave you.
Certainly the word ``scourge'' is a strong word and I think
it understates the level of social change that is being caused
to the American workforce as a result of this horrible
recession. It's not just the number of people that are
unemployed; that in and of itself is certainly staggering. It's
the length of unemployment that really does present the
greatest challenge to the American workforce system.
It's not unusual, in fact it's a daily occurrence, that
you're interacting with people who have been out of work two,
three, four years. It's not uncommon. Understanding and
developing an appreciation for the damaging effects of long-
term unemployment is something for national discussion and I
commend you for bringing it up here. I saw the same article in
the New York Times over the weekend.
Something happens at the one-year point of unemployment.
It's terribly insidious and it's kind of structural. We hear
the term ``structural'' usually in reference to the economy,
but something structural with respect to the person. It's the
mind. It's no longer just being out of work; it's the mind.
It's one's self-esteem, it's one's confidence. It's the
emotional effect that unemployment has with respect to family
and children and how you feel about life and things of that
sort.
At a time when it's more and more difficult to convince
business that you're the right candidate for the job, where you
need to be at your best, it seems to be a case in which you're
facing a mountain of challenges.
Overcoming this is really daunting for anybody, but it's
compounded for older workers. They're dealing with the stigma
of being older. They're dealing with the prejudices that come
with it, with the discrimination that comes with it, and this
mean perception that lots of folks have that you're looking for
something for nothing or your skills are too dull to be of help
to anybody. It's a challenge if you're under 50. It's a
category 5 hurricane if you're over 50.
I fear that we're losing the battle. We've already had
thousands of people in this Nation reach the point where their
benefits have expired and thousands more every week fall into
that category. And until or unless there are relevant services
and tools that are part of the American workforce system, that
understands the effects of long-term unemployment and provides
them for this population, so that population stays connected to
the system and is served, we will continue to lose them.
That one-year point of unemployment is a critical time to
either keep them and catch them or to lose them. Three million
people or more have exhausted benefits already and another
three million may very well exhaust benefits by the end of this
year.
Now, there's no shortage of stats. You've heard them all.
But the increase in terms of the percentage of the population
of 55 and older that are unemployed for a year is four times
what it was four years ago.
Our program that you made reference to, Senator, Platform
to Employment, was basically a research project, and I think
very clearly it showed that if you address the issues of one's
self-confidence, the emotional issues, and you recognize the
position of benefit, the buyer's market that business has, you
can't help to give them a chance to reenter the workforce.
Short of that, it's very, very difficult.
Now, time may be kind of running out here. As I said
before, the one-year point is that point. But we're going to be
having what could be two or three million people reach the
conclusion of benefits at the end of this year. It could be 25
to 30 percent of them might very well be people that are 55 and
older.
The more time that people are unemployed, the more hopeless
and desperate that they become. After a while they stop looking
for work, they give up, and they rely upon the regional safety
net for support.
So I gave a lot of ideas and suggestions in my testimony,
but let me just highlight a couple. The SCSEP program, the
Senior Community Service Employment Program, may not have been
designed for this particular population, but I think it's a
service vehicle that you should consider. It keeps the focus on
employment. I see no merit whatsoever in moving this program
from the U.S. Department of Labor to HHS. This is a plan that's
been considered for two or three years. It sends exactly the
wrong message to older workers in particular who are long-term
unemployed that you're a social service issue, you are not an
employment issue.
You ought to take that program, examine the regulations,
declare long-term unemployed people a group that is a priority
in the program, and consider the investment option that I made
in my testimony, the cost of the safety net, as opposed to the
cost of investment in the person in the program. Do a pilot
project. I suggest to you that it will be thousands of savings
per person to invest on the employment side as opposed to the
safety net and, most important, you're giving people a chance
to have the American dream and to have opportunity, which is a
basic fundamental right of being an American.
Thank you.
The Chairman. Thank you very much.
Ms. Furchtgott-Roth.
STATEMENT OF DIANA FURCHTGOTT-ROTH, SENIOR FELLOW, MANHATTAN
INSTITUTE, NEW YORK, NY
Ms. Furchtgott-Roth. Thank you very much.
Unemployment is a serious issue for older workers and also
a problem for other workers. Millions of Americans are looking
for work. I agree that older workers face serious difficulties
in today's underperforming labor market, but I disagree with
the GAO report's implication that the problems facing older
workers require policies that treat older workers differently
from younger workers. Such policies would needlessly set one
generation against each other. They rest on the false premise
that the problems facing older workers are the result of
discrimination or other factors that work specially against
older workers and in favor of younger workers.
In fact, the problems facing older workers in today's
stagnant labor market are not dissimilar from the problems
facing all workers--lack of robust growth. Look at this chart,
figure 2 in my testimony, which unfortunately I was not allowed
to place on an easel, which my research assistant is holding.
Over the past ten years, employment has increased among
Americans 55 and older by 8.9 million. At the same time, it has
declined by 3.1 million in the 25 to 54 age group and declined
by 313,000 among those age 20 to 24.
Figure 3 shows the labor force participation rate of
seniors has increased by 5.7 percentage points over the past
ten years. Yet it's declined in other age groups.
Figure 4 shows that, compared with those age 20 to 24 and
25 to 54, unemployment rates are lowest for those 55 and over
and have seen the smallest increase over the past decade.
In November 2011 the Pew Research Center issued a lengthy
study entitled ``The Rising Age Gap in Economic Wellbeing,''
which I would like to submit for the record.
It concluded that the gap in wellbeing between older and
younger workers was at a record. The older group had 47 times
the net worth of the younger group in 2009, compared to a
multiple of 10 in the quarter before. Older Americans, the
report from Pew concluded, had benefited from appreciation of
their homes, higher incomes, and lower unemployment rates.
Younger workers have student loans and no jobs.
Speaking of the New York Times, this weekend there was a
lengthy article called ``A Generation Hobbled by the Soaring
Costs of College,'' showing that debt among some students they
interviewed was $125,000 when they graduated.
The reality is that the administration's policies have
failed across the board and resulted in a serious deficit of
employment opportunities for all workers, old and young alike.
The problem will not be solved by special policies that favor
one group over another. What we need instead are policies that
broadly create more job opportunities for all, with older
workers benefiting as much as younger workers.
Just a few sample policies: Add more certainty to the tax
system. Rates on income and capital are scheduled to rise
dramatically next January 1st, creating extensive uncertainty
and what some people have called ``Tax Armageddon.'' Older
Americans are disproportionately hurt by tax uncertainty
because they have fewer opportunities to react to changes,
particularly those affecting capital gains.
Another example that we could do is eliminate the
Environmental Protection Agency's new regulations on coal,
which are affecting the utility sector, which employs a
disproportionate number of older workers. Over 100 coal-fired
plants have closed since January 2010. The closing of coal-
fired plants causes electric utilities to require higher rates,
which harm older Americans on fixed incomes.
If we approved the Keystone XL Pipeline, Canadian oil could
go to our refiners in the Gulf to be made into gasoline and
other products. Millions of older Americans live in the States
that would benefit from these construction projects.
One proposed bill that would interfere with job creation is
S. 1471, the Fair Employment Opportunity of 2011. The bill
would set up another protected class of workers, the
unemployed. The unemployed would be allowed to sue employers
for discrimination. This would increase the cost of hiring
American workers, making it more likely that employers would
expand plants offshore, making America a less favorable place
to do business. Employers would face more paperwork to show
that they weren't discriminating against the unemployed, and
trial lawyers would target companies with threats of lawsuits.
Thank you very much for inviting me to testify today and I
would be glad to answer any further questions.
The Chairman. Thank you very much.
Ms. Owens.
STATEMENT OF CHRISTINE OWENS, EXECUTIVE DIRECTOR, NATIONAL
EMPLOYMENT LAW PROJECT
Ms. Owens. Thank you, Chairman Kohl, Ranking Member Corker,
and Senator Blumenthal. Thank you very much for convening this
hearing today into the problems older long-term unemployed
workers face in navigating the labor market and possible
solutions to these difficulties.
I also want to compliment the General Accounting Office for
its thoughtful review of these problems, which included a
survey of existing research and polling, as well as its focus
groups that enriched its presentation of the problems older
unemployed workers are facing.
As we discussed in our written statement today, older
workers are less likely to become unemployed, but when they
become unemployed they are more likely to remain so and to
remain so for longer periods of time. Moreover, older
unemployed workers are three times as likely as younger
unemployed workers to become unemployed because they have lost
their jobs, and in contrast younger workers are three times as
likely to be unemployed because they are looking for a first
job or reentering the workforce, perhaps after finishing
college.
Each group would benefit from public and private policies
that take into account the discrete problems that they face. As
Senator Corker said, we don't want to pick winners and losers.
But public policy responses to an unemployment crisis is not a
zero sum game. We can walk and chew gum at the same time.
There are two bills currently pending before Congress that
we believe would enhance prospects for older long-term
unemployed job-seekers. The first is the Fair Employment
Opportunity Act, and I'm sorry that Senator Blumenthal had to
step out since he's the chief sponsor of this legislation. It
would bar employers and agencies from refusing to consider or
hire qualified individuals simply because they are unemployed.
It does not promise a job to any candidate. It does not require
employers to consider unqualified candidates. It simply opens
the doors that are now shut on qualified applicants simply
because they are unemployed.
Similar to existing workplace laws it borrows from, it
provides a cause of action for job applicants and remedies for
applicants, applicants wrongfully denied the opportunity to
apply for a job. And it preserves the right of employers to
impose an employment restriction where doing so is a legitimate
criterion for the job in question.
This legislation is a commonsense solution to a problem
that, despite considerable public attention over the last
couple of years, has actually persisted. As we've outlined in
our testimony today, recent advertisements continue to express
restrictions to limiting job openings to those who are
currently employed. We hear complaints from unemployed workers
like Sheila all the time, who come to us with their accounts of
having been approached by a recruiter and then, once the
recruiter learns the person is unemployed, the person won't be
considered. I've outlined examples of those.
Also in our testimony we cite examples of headhunters,
recruiters, and employment agencies that have gone on the
record saying that they are told not to refer unemployed job
candidates. This is a real problem. I wish we didn't need
legislation to correct it, but it is not self-correcting.
Second, Congress should pass the Protecting Older Americans
Against Discrimination Act, which has bipartisan sponsorship of
Senators Harkin and Grassley, as well as Senator Leahy. The
measure was introduced in March of this year. It would reverse
the Supreme Court's decision in 2009 in Gross versus FDL
Financial, which upended longstanding and established burdens
of proof in employment discrimination cases involving mixed
motives and held that under the Age Discrimination in
Employment Act plaintiffs must show not only that age was a
motivating factor for the employment action, but must
essentially disprove any other factor the employer may have
relied on, whether the plaintiff knows it or not.
This is a radical decision. It rewrote the law. It
disregarded interpretations of Title 7, which is a parallel
law, and it has created significant mischief. It has created
second-class status for ADEA plaintiffs. It essentially gives
employers a green light to discriminate if they had another
reason in addition to age discrimination. It creates confusion
for trial judges and juries that are hearing dual-basis cases
involving both age and gender or race discrimination. And it
has now been extended to the Americans With Disabilities Act,
the Rehab Act, and Title 7 retaliation cases.
The Protecting Older Americans Against Discrimination Act
would right this wrong, restore the standards Congress
intended. In the words of Senator Grassley, ``Older Americans
have immense value to our society and our economy and they
deserve the protections Congress originally intended.''
Our testimony outlines a few other policy solutions that I
think Congress should consider. I want to end by quoting that
bipartisan op-ed that you opened with, Senator Kohl: ``What we
can't assume is that these problems will correct themselves.
For older unemployed workers, their families and their
communities and the Nation, the situation will only get worse
as we wait.''
As Messrs. Hassett and Baker--and I know them both and they
are strange bedfellows--wrote, ``Every month of delay is a
month in which our unemployed friends and neighbors drift
further away.''
Thank you very much.
The Chairman. Thank you very much, Ms. Owens.
Mr. Carbone, will you tell us about the program that you
have been operating up in Connecticut with respect to getting
older people up to speed and getting them into the workforce?
Mr. Carbone. Yes. That's actually not just for older
people. It covers long-term unemployed people. It's called
Platform to Employment. What we did, it was basically a
research project. We wanted to learn more about long-term
unemployment, so we looked at a two-year study that we had done
in-house with our one-stops. It was clear to us that long-term
unemployed people were facing a severe loss of confidence. The
emotional issues would certainly inhibit their ability to
perform well in the job-seeking side of things.
We also had to recognize that it was a buyer's market, that
business doesn't have to consider these people. So we had to
make it a case in which a program could be offered that would
hold business free of any risk.
So we took 100 people that in microcosm looked like our
district. In fact, the statistics pretty much mirrored, I
think, the national statistics. And they engaged in the first
five weeks, which was all about restoring one's confidence and
getting emotional support from specialists during that period,
then job search, then going into companies where a job was
actually open. We would subsidize the wages, actually cover the
wages, for a period of up to eight weeks and they would be on
my payroll at WorkPlace, Inc.
So the businesses were completely free of risk. Business
could have terminated the contract after one day or after eight
weeks and not hired the person. We've got 71 percent employment
as of today, in full-time jobs that are private sector jobs.
These are all people that were two years or longer out of work.
They came from all employment disciplines, all walks of life.
They came from the Greenwich side of my region and the
Bridgeport side of my region. They found life again.
The Chairman. Now, this is a program that uses the private
sector in terms of funding?
Mr. Carbone. Yes.
The Chairman. Can we expand the program, should we expand
the program? Should we attempt to get some public money
involved? How important is it that we try and do everything we
can?
Mr. Carbone. I think you start with the two most essential
parts of it and you try to establish them in the American
workforce system. Dealing with the issue of self-confidence
with long-term unemployment must be addressed. There are 3,000
one-stops coast to coast in America. That's where the rubber
meets the road, where your constituents that are unemployed and
our friends that are, that's where they interact with the
American workforce system.
If you're long-term unemployed, there is very little
difference in terms of what's offered for you than if you're
unemployed for three days. So I think you take the issue of a
program that can restore their self-confidence, you include the
kind of programs that can deal with the emotional issues that
will inhibit your ability to be successful at this. And you
look at the standpoint of business, you know, whether or not
old tax credits or OJT programs or things of that sort still
have relevance. I question that.
So the program worked out very well and, yes, I did it with
private money, and by doing it with private money it opened the
doors to a lot of businesses that if it was government money
they would have never really let us in.
The Chairman. Mr. Jeszeck, we've heard about the private
sector's ability to have some impact on this issue. What role
does the government play? Why hasn't it been effective in
getting more older people back to work?
Mr. Jeszeck. Well, Senator, I think the first issue is
that, as I think the point was made earlier, the economy really
needs to create more jobs. That ultimately is going to set the
stage for really helping a lot of people.
In our report, we actually were able to identify a large
number of proposals that could help workers throughout the
country. We had a panel of experts from all different
perspectives. We had someone from the Heritage Foundation,
American Enterprise Institute. And we had people from the Urban
Institute and Wellesley College.
They came up with a lot of different ideas. Each of these
has advantages and disadvantages. Some cost significant amounts
of money. Some maybe less so, but may be less effective. The
issue of helping just older workers or all workers also was an
issue that was raised.
There are a lot of things, a lot of thinking that can be
done here to identify things that can help workers in the
future to obtain reemployment.
The Chairman. Thank you.
Do you want to ask one question?
Senator Corker. Sure. I think we have got just a couple
minutes left on a vote.
Thank you all for your testimony. It's all very, very
compelling. Ms. Whitelaw, especially coming here in your
circumstances, I very much appreciate it.
Let me ask you this question. My experience in my previous
life was the more senior people in a company, it took longer
for them to find equal employment because those positions in
many cases are more difficult to find. Is part of the disparity
between older workers taking a longer period of time to find
employment the fact that in many cases they would have risen to
a much higher level as far as the types of positions they held
and therefore the length of time in finding a job is more
difficult? Is that a factor in any of the stats that any of you
are putting forth?
Mr. Carbone. I can tell you more from the standpoint of the
experience that we had with Platform to Employment. I think it
takes a while, it takes a long period of time, for people to
come to a conclusion that perhaps the level of business
responsibility or managerial responsibility I had before is not
necessarily in reach at this moment. It takes a while to think
in terms of a platform, a way station, a place in which you can
get off unemployment and onto employment and then have a chance
to kind of get your life back together again. I think it has
more to do with that than it does just anything else.
The Chairman. I want you to continue. Senator Corker and I
have to run to a vote. Senator Blumenthal is going to chair the
hearing. Keep on talking, please.
Mr. Carbone. He's a very good guy.
The Chairman. He's a very good guy.
Senator Blumenthal [presiding]. Continue, please.
Mr. Carbone. Actually, I think I pretty much answered the
question.
Senator Blumenthal. I have a few questions for the panel,
and I want to thank you for being here, particularly Mr.
Carbone from my State of Connecticut. Thank you for being here.
I believe that the chairman has described your experience over
many years in trying to promote what I think everyone on the
panel shares as a common goal, which is enabling more people to
find work.
I know we do not want to pit one generation against each
other. I take that point very seriously. But one finding that
struck me in the GAO report was the disparity between older
jobless people in terms of education. Normally what I gather
the common trend is that people with more education tend to
have lower unemployment rates. Among older Americans the
opposite seems to be true. Do you have an explanation for that?
Mr. Jeszeck. Senator, one of the things we found, was that
if you just looked at unemployment rates among older Americans,
that relationship still held true, that generally more
education led to lower unemployment. However, once you were
unemployed the likelihood that you would have long-term
joblessness was pretty much equal regardless of your level of
education; that once you fell into that group of being
unemployed it cut across racial differences, gender
differences, education differences.
It does seem that there's some other forces at work here.
Once you fall into that category, it's either employer
perceptions or the fear that older workers may cost more
because of their higher health care costs, or unwillingness to
invest in older workers because they might not have enough time
at your workplace so you can recoup that investment in their
training, a number of different things.
But once you fell into that category, it pretty much washed
the educational differences out.
Senator Blumenthal. I wonder if you or any of the other
members of the panel have reached any conclusions as to which
of those factors or others are most important in that trend?
Ms. Furchtgott-Roth. One important factor, as Senator
Corker mentioned, is that the more senior the worker--and
people in their 50s are often at the peak earnings of their
careers, so there are fewer jobs open to them. And as Mr.
Carbone said, they have to face taking a cut in pay, which can
psychologically be very difficult.
So if you think about a 25-year-old starting out, there are
more jobs open. So that's a factor.
Senator Blumenthal. The smaller number and variety of jobs
that are open to people who may be in their 50s as compared to
their 20s.
Ms. Furchtgott-Roth. Right.
Ms. Whitelaw. If I might say something, Senator Blumenthal.
One of the other things that I have found in my job search
which is sort of alarming to me is when you go for the
interview they look at you. If you manage to get even an
interview, they look at you and they can sort of figure out
your age somewhat. And then what I've encountered is they try
to dissuade you in a very clever way of not taking the job, by
throwing things at you like: You're going to have to carry 50
pounds in a box; is that okay? You have to climb ladders, you
have to work until 11:00 o'clock at night.
I found that to be quite rampant actually. So I realized
what they were trying to do. I mean, at least my feeling was
that they were trying to dissuade me from even thinking about
the job.
Mr. Jeszeck. Senator, if I could also comment on that. In
our focus groups, which we made clear are not generalizable--we
didn't derive any statistical analysis from them, but just at a
personal level one of the things we found, that for these older
workers, particularly when they were employed for long,
extended periods of time, some of them for two years, they
would take any job that was available. They had reached points
where it didn't matter what they were before in their old
company, and some of them had positions that had a lot of
responsibility. But at this point they really had reached the
point that they needed work and would virtually do pretty much
anything for anyone who would hire them.
Senator Blumenthal. That's why I am still somewhat in a
quandary as to why--and you put it more precisely and
accurately--that once someone is unemployed, then the level of
education seems in effect to work against them, not so much as
a purposeful disadvantage, but just as a fact of life.
Is that because maybe those with higher educational levels
are not willing to take different jobs? Or is it because
somehow education is held against them and the employer may
feel someone with a college education is not going to do well
in certain jobs motivationally?
Mr. Carbone. Actually, I think it was Pew that did a study,
and when you look at long-term unemployed folks by education
the numbers are remarkably alike, somewhere 35 percent average.
It didn't matter if you had a high school degree or if you had
advanced college degrees.
I think it's the case of the fall. I think the fall is
hurting more when you're in a higher level position. You were
probably at the peak of your earnings or you were doing very
well. It takes longer to reach that point. I think it's less
education. It's less that. It's not that businesses or
industries don't want that. It's that it takes a while for a
person to realize that, I've got to do something that is
perhaps not at the same level that I was doing before. I think
that has a lot to do with the length of the unemployment and
how they compete for work.
Senator Blumenthal. Mr. Carbone, you've had such extensive
experience with the longer term unemployed. I wonder if you
could comment on the evidence, whether it's anecdotal or more
systematic, as to discrimination against the longer term
unemployed.
Mr. Carbone. It is there. Just look at the want ads, check
out the Craigslists of the world. There has been nothing more
disheartening. I spend a lot of my time interacting with long-
term unemployed people. And it's bad enough when you go to 3 or
400 different places where you apply for work and you don't get
responses, but it's when in earnest you're looking for
employment and you'll see as part of the advertisement: If
you're unemployed, don't apply. Or if you've been unemployed a
year or longer, don't apply.
These folks that issue--I mentioned before about self-
confidence. Very important. It's a critical component to
getting back on your feet. That just adds another level of:
You're done, you're done. It's there.
Many companies are overt about it. We've seen some
companies that are icons, that actually put it on their web
sites. But a lot of other companies in a much more quiet way
will practice it, will practice it. And I worry more about them
than I do the ones that put it on the web site, because I think
there's a lot more of them out there that do that.
Senator Blumenthal. You may know that I have introduced a
bill called the Fair Employment Opportunity Act of 2011, that
would prohibit that kind of----
Mr. Carbone. I do.
Senator Blumenthal [continuing]. Discrimination. But of
course, the sort of implicit or implied discrimination, maybe
not stated, not overt, is as troubling as the ads you've just
described. And I'm not sure how we get at that kind of
discrimination.
Mr. Carbone. I'm not sure that you can. I think what
brought this to the surface as far as I was concerned was the
added discouragement that it had the effect on long-term
unemployed people when they would see it in print. In terms of
how internally it's used by a business, I think it would be
very difficult to kind of legislate some way to prohibit that.
Senator Blumenthal. In a way the irony is that your
program, The WorkPlace, and others like it do such fantastic
work in providing the orientation, the attitude, the skills
that are necessary for longer term unemployed to reach the
point where they really sustain their motivation and their
drive, and yet there is the discrimination against them, which
in turn adds to their frustration and makes your job all the
more different.
Mr. Carbone. Yes, and it adds this new dimension to our
job. 15 years ago when I came to The WorkPlace, if somebody
said, ``what's long-term unemployment,'' I would have said 39
weeks. And now it's 99 weeks in Connecticut. It's kind of
tapering down. It won't be for long, but it was.
And that changes the way we do our business. So we kind of
spent two years as unemployment was surging, preparing the one-
stops for this huge increase in the number of participants as
the unemployment rate was rising. But while that was happening,
it was sort of--kind of almost a silent feature, because I will
tell you, and I take a lot of guilt on this, I didn't even
notice it until it became a crisis, where one day the acting
commissioner of labor sent a letter out saying: On May 15,
12,000 people in Connecticut are going to reach this 99-week of
benefit point, be unemployed, and no further benefits.
So you could imagine that you go that period of time and
all of a sudden not only don't you have a check coming in, but
you don't have a job. There are issues that are facing you that
the American workforce system never had to address before, and
frankly is not prepared to address, not prepared.
It's not Platform to Employment per se in 50 States
everywhere. It's the elements of the program that proved to be
essential to enabling long-term unemployed people to gain
employment. Putting those elements in the American workforce
system is what this is all about. It doesn't take a lot. It
doesn't cost a lot. But it's a way of connecting this
population.
When I said before that we're losing the battle, more and
more of them are lost every single week. And once they're lost,
once they start that march to the safety net, they're done,
they're done.
So it's looking back at the American workforce system and
seeing what's not there that needs to be there.
By the way, Senator, we do it for other groups and we
should. We do it for veterans, we do it for dislocated workers,
we do it for people with disabilities, and we should. This is a
special population whose numbers eclipse all other special
populations in our system already, and growing every day, and
we're not addressing it. We're basically telling them to walk
the plank and get lost.
Senator Blumenthal. I wonder if I could just conclude by
asking any of the witnesses whether from your knowledge of the
history of unemployment and economic trends in the United
States, whether this kind of longer term unemployment in the
numbers and the structural effects and qualities is
unprecedented or whether you can look back and see times in our
history when it has happened similarly?
Ms. Furchtgott-Roth. We're at an almost record high in
terms of the share of the unemployed that is long-term. We were
at I think a record high last year something like last year.
It's gone down slightly. That's why we really need to focus on
economic growth to get rid of this problem.
If you look at North Dakota, for example, it has the lowest
unemployment rate in the Nation. Unemployment is 3 percent.
It's taking advantage of oil and natural gas exploration. And
there are other States, other parts of the country that want to
do that, but are impeded by regulation. We can almost call the
United States ``Saudi America'' in terms of the percent of oil
that we have that's going to come on line in the next 20 or 30
years, and we need to take advantage of this new American
energy revolution to be putting people back to work.
You can't get a motel room in North Dakota. The same with
Eagle Ford south of San Antonio in Texas. We need to be
encouraging these other kinds of policies to reduce long-term
unemployment as well as short-term unemployment.
Senator Blumenthal. I wish we had the oil and gas in
Connecticut that North Dakota has. So we are actually relying
on different kinds of energy to generate employment, fuel cells
and alternative sources of energy, which may not be subject to
that kind of regulation, but are equally important to the
energy future of the country, I think. But thank you for that
comment.
I'd like to thank all of you for being here today. I have
to go vote again. I apologize that your testimony has coincided
with a series of votes that we have ongoing and that's probably
the reason why we don't have more Senators here and why we are
going to adjourn now. But I really do appreciate your testimony
today.
The record will be kept open for a week--ten days. With
that, this hearing is adjourned. Thank you.
[Whereupon, at 3:12 p.m., the hearing was adjourned.]
APPENDIX