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Democrats warn jobless could derail US recovery

US unemployment remains stubbornly high at just over 9%, but it's the alarming number of long-term jobless people that is causing fresh concern for Democratic lawmakers.

business Updated: Aug 05, 2011 11:37 IST

US unemployment remains stubbornly high at just over 9%, but it's the alarming number of long-term jobless people that is causing fresh concern for Democratic lawmakers.

About 42% of the nation's 14.1 million unemployed have been out of work for at least six months, and nearly one in three has been jobless more than a year. Those numbers — still near record levels set last year — could be a sign of chronic labor market problems that could derail any lasting economic recovery, according to a report on Thursday from Congress' Joint Economic Committee.

Many of these workers suffer because their skill sets no longer fit the needs of employers, the report found. It suggests more investment in job search and training programs would help the long-term unemployed find new work.

The group includes disproportionately high rates for workers 55 and older, those with only a high school degree, workers in construction or manufacturing, and African American workers.

"This report makes clear that policymakers will need to simultaneously spur job creation while also investing in education and training programs that can prepare workers for new employment opportunities," said Democratic Senator Bob Casey, the committee's chairman.

But while Democrats, labor unions and even business groups like the US Chamber of Commerce have called on the government to invest more money to stimulate job growth, Republicans intent on cutting federal spending have resisted such calls.

"The problem that we must address is that our businesses simply aren't hiring," said Texas Rep. Kevin Brady, the top Republican on the Committee. He said the administration should foster an environment that encourages business to invest, which would lead to the creation of new jobs.

The report comes a day before the government releases July employment figures. The unemployment rate rose to 9.2% last month - the highest level of the year - and is expected to remain unchanged.

Democrats say there's is a growing urgency to the problem of persistent long-term unemployment, as people out of work are less likely to find a job the longer they are unemployed.

Among those unemployed for longer than one year, only 8.7% were able to find work, according to recent 12-month statistics from the Bureau of Labor statistics.

Long-term unemployment is currently at 4.1% of the labor force, down only slightly from a record 4.4% in May 2010. Before the recession began in 2007, it stood at less than 1%.

"Scars on the labor force caused by a severe recession can cause a permanent rise in unemployment," the report said. "Investing in work force training programs can help unemployed workers improve their job prospects."