[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

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                       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







                                  
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