Obama has been frustrated in his efforts to get Congress to pass a bill extending emergency unemployment benefits. His turn to urge companies to help the unemployed underscores the vow he made during Tuesday’s State of the Union address to use every tool he can find to achieve his goals, even if the tools aren’t too powerful on their own.
In this case, companies are essentially promising not to penalize a job applicant for being out of work for a lengthy period of time. Studies have shown that people unemployed for more than six months receive far less interest from companies than those who have been out of work for a shorter period.
“It’s a cruel Catch-22: The longer you’re unemployed, the more unemployable you may seem,” Obama said in the East Room. “So while Congress decides whether or not it’s going to extend unemployment insurance for these Americans, we’re going to go ahead and act.”
The White House said the companies had agreed to a series of “best practices” to ensure that the long-term unemployed receive a “fair shot” during the job application process. Obama also signed a presidential memorandum ordering federal agencies to take steps to ensure they’re not discriminating against the long-term unemployed.
“We’ve engaged employers of all sizes, all around the country[,] . . . to commit to a set of inclusive hiring policies,” Obama said, “from making sure recruiting and screening practices don’t disadvantage folks who have been out of work, to establishing an open-door policy that actively encourages all qualified applicants.”
Obama also announced a $150 million grant competition through the Labor Department to support public-private partnerships geared toward helping prepare and place the long-term unemployed in jobs. He said he would also push for skills training and continue to advocate for Congress to pass an extension of unemployment benefits.
One recent study showed that those who had been unemployed for eight months had a 45 percent lower interview call-back rate than those out of work for one month. A separate survey reported that those unemployed for seven months need to send an average of 35 résumés to online job postings to receive just one interview, compared with 10 résumés per interview for those unemployed for only one month.
“We are trying to address the heart of that negative cycle,” said Gene Sperling, who directs the White House’s National Economic Council.
In all other respects, he added, “the long-term unemployed tend to look like the rest of us.” He said that 70 percent of them are under 50, and they are “slightly more educated” than the average person seeking a job.
Sperling told reporters in a conference call Thursday that the administration started reaching out to corporate leaders in May and secured specific pledges from companies over the past three to four months.
“This was an area where we should be able to move the needle by talking to companies directly and getting them to examine their business practices,” he said. “The response has been inspiring.”
Top Obama aides, including Sperling and senior adviser Valerie Jarrett, made a personalized pitch to business executives at gatherings inside and outside the White House.
At one point, Sperling said he e-mailed media titan Rupert Murdoch to ask if he would consider taking the pledge; he said Murdoch e-mailed him back and agreed to scrutinize his companies’ hiring practices. Both News Corp. and 20th Century Fox eventually signed onto the effort.
“We still consider this not a destination, but a launch,” Sperling said. “I have no question that, after tomorrow, there will be more companies that will come to sign up.”
Sperling said he could not estimate how many people the new commitments would affect, but he predicted more people would become employed as a result.
It “will absolutely be a net win for the country. This will not be a zero-sum game,” he said.