NEW YORK/WASHINGTON: Gary Feeman has been searching for a job for 16 months. He's not ready to give up just yet, but the 60-year-old worries he is running out of options.
Feeman is among the more than 5 million Americans who have been out of work for more than six months and who represent the heart of the crisis in the labor market.
Their plight also poses a warning that U.S. unemployment may not drop back to its pre-recession levels and could be stuck higher than many policymakers expect.
Feeman, from Lancaster County, Pennsylvania, has sent out as many as 100 resumes. But the former maintenance director at a small amusement park in the area, has had only one interview in person.
That was in January. "I have tried everything under the sun," he said. "The frustrating thing to me is that when you apply for a job, employers do not respond either way."
One of the biggest challenges facing U.S. Federal Reserve Chairman Ben Bernanke and his colleagues is to understand whether people like Feeman will eventually find work once the economy gathers enough speed.
Bernanke appears to think they will and he has suggested more stimulus by the Fed might be needed to kick-start demand, and job creation, into a higher gear.
But if he's wrong, the central bank risks pumping too much money into the economy in an effort to help people who have become unemployable. Rather than bringing down the jobless rate, the Fed could eventually fuel higher inflation.
"We're living through a juncture in US policy history in which we're making major decisions about what type of society we're likely to be," said Steven Davis, an economist at the University of Chicago.
"Those decisions will affect things for a generation."
Some 40 percent of the nation's unemployed have been out of work for more than six months. That's over twice the rate of long-term unemployment just before the 2007-2009 recession.
Bernanke mostly pins long-term joblessness on weak demand from American consumers and companies. In late March, he pointed to data showing that, compared to before the recession, the short-term unemployed also are taking much longer to find work.
This, he argued, justifies the Fed's policy of keeping interest rates low to help the economy. Persistent long-term unemployment is a risk because it might some day make people unemployable, he said.
"If progress in reducing unemployment is too slow, the long-term unemployed will see their skills and labor force attachment atrophy further, possibly converting a cyclical problem into a structural one," Bernanke told a conference of economists.
Long-term unemployment has other costs for the economy. A paper for the Brookings Institution, a Washington think-tank, finds that men who lose their job when the unemployment rate is above 8 percent forfeit twice as much in future earnings than if had they lost their job when the rate was below 6 percent.
indiatimes.com
Feeman is among the more than 5 million Americans who have been out of work for more than six months and who represent the heart of the crisis in the labor market.
Their plight also poses a warning that U.S. unemployment may not drop back to its pre-recession levels and could be stuck higher than many policymakers expect.
Feeman, from Lancaster County, Pennsylvania, has sent out as many as 100 resumes. But the former maintenance director at a small amusement park in the area, has had only one interview in person.
That was in January. "I have tried everything under the sun," he said. "The frustrating thing to me is that when you apply for a job, employers do not respond either way."
One of the biggest challenges facing U.S. Federal Reserve Chairman Ben Bernanke and his colleagues is to understand whether people like Feeman will eventually find work once the economy gathers enough speed.
Bernanke appears to think they will and he has suggested more stimulus by the Fed might be needed to kick-start demand, and job creation, into a higher gear.
But if he's wrong, the central bank risks pumping too much money into the economy in an effort to help people who have become unemployable. Rather than bringing down the jobless rate, the Fed could eventually fuel higher inflation.
"We're living through a juncture in US policy history in which we're making major decisions about what type of society we're likely to be," said Steven Davis, an economist at the University of Chicago.
"Those decisions will affect things for a generation."
Some 40 percent of the nation's unemployed have been out of work for more than six months. That's over twice the rate of long-term unemployment just before the 2007-2009 recession.
Bernanke mostly pins long-term joblessness on weak demand from American consumers and companies. In late March, he pointed to data showing that, compared to before the recession, the short-term unemployed also are taking much longer to find work.
This, he argued, justifies the Fed's policy of keeping interest rates low to help the economy. Persistent long-term unemployment is a risk because it might some day make people unemployable, he said.
"If progress in reducing unemployment is too slow, the long-term unemployed will see their skills and labor force attachment atrophy further, possibly converting a cyclical problem into a structural one," Bernanke told a conference of economists.
Long-term unemployment has other costs for the economy. A paper for the Brookings Institution, a Washington think-tank, finds that men who lose their job when the unemployment rate is above 8 percent forfeit twice as much in future earnings than if had they lost their job when the rate was below 6 percent.
indiatimes.com
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