- TALES FROM THE UNEMPLOYMENT LINE: BARRIERS FACING THE LONG-TERM UNEMPLOYED

[Senate Hearing 112-877]
[From the U.S. Government Publishing Office]

S. Hrg. 112-877

TALES FROM THE UNEMPLOYMENT LINE: BARRIERS FACING THE LONG-TERM
UNEMPLOYED

=======================================================================

HEARING

OF THE

COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

EXAMINING BARRIERS FACING THE LONG-TERM UNEMPLOYED

__________

DECEMBER 8, 2011

__________

Printed for the use of the Committee on Health, Education, Labor, and
Pensions

Available via the World Wide Web: http://www.gpo.gov/fdsys/

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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut

Daniel E. Smith, Staff Director

Pamela Smith, Deputy Staff Director

Frank Macchiarola, Republican Staff Director and Chief Counsel

(ii)

C O N T E N T S

__________

STATEMENTS

THURSDAY, DECEMBER 8, 2011

Page

Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education,
Labor, and Pensions, opening statement......................... 1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming,
opening statement.............................................. 4
Merkley, Hon. Jeff, a U.S. Senator from the State of Oregon...... 26
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 31
Blumenthal, Hon. Richard, a U.S. Senator from the State of
Connecticut.................................................... 33

Witnesses

Owens, Christine, Executive Director, National Employment Law
Project, Washington, DC........................................ 8
Prepared statement........................................... 10
Moss, Reverend Dr. Marvin Anthony, Senior Pastor, Cascade United
Methodist Church, Atlanta, GA.................................. 15
Prepared statement........................................... 17
Stebbins, Donna, Phoenix, AZ..................................... 18
Prepared statement........................................... 20
Meyer, John, Owner, Office Products Center, Winner, SD........... 22
Prepared statement........................................... 23

Additional Material

Statements, articles, publications, letters, etc.:
Senator Murray............................................... 43
Alex M. Brill, Research Fellow, American Enterprise Institute
(AEI), Washington, DC...................................... 43
Robert Johnson, Harding County Commissioner, Harding County,
SD......................................................... 49
National Small Business Association (NSBA), Washington, DC.. 49
Laborers' International Union of North America (LIUNA),
Washington, DC, PR Newswire--USNewswire, aricle............ 50
Response to questions of Senator Enzi by Christine L. Owens.. 51
Response to questions of Senator Murray by:
Christine L. Owens....................................... 54
Reverend Dr. Marvin Moss................................. 64
Letters:
Consumer Data Industry Association (CDIA), Washington, DC 66
Rapid City Economic Development, Rapid City, SD.......... 66
Society for Human Resource Management (SHRM), Alexandria,
VA..................................................... 67
Building and Construction Trades Department, American
Federation of Labor--Congress of Industrial
Organizations (AFL-CIO), Washington, DC................ 69
International Brotherhood of Teamsters, Washington, DC... 70
International Union of Operating Engineers (IUOE),
Washington, DC......................................... 71
Rocky Mountain Environmental Labor Coalition (RMELC),
Colorado Springs, CO................................... 72

(iii)

TALES FROM THE UNEMPLOYMENT LINE: BARRIERS FACING THE LONG-TERM
UNEMPLOYED

THURSDAY, DECEMBER 8, 2011

U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
Washington, DC.
The committee met, pursuant to notice, at 9:46 a.m., in
Room SD-106, Dirksen Senate Office Building, Hon. Tom Harkin,
chairman of the committee, presiding.
Present: Senators Harkin, Murray, Merkley, Franken,
Blumenthal, and Enzi.

Opening Statement of Senator Harkin

The Chairman. The Senate Committee on Health, Education,
Labor, and Pensions will please come to order. We welcome
everyone. I have a short opening statement, and I'll recognize
Senator Enzi. We have a vote at about 10:30 which will
interrupt our proceedings just very, very briefly but,
hopefully, not for very long.
As we all know, our Nation is in the grips of the worst
period of joblessness since the Great Depression. Especially
troubling is the plight of the long-term unemployed, those who
have been out of work for at least 6 months, as that is
defined. Today, we're going to learn more about the significant
barriers that confront Americans struggling with long-term
unemployment, and we'll explore the steps we should be taking
here in Congress to help support their efforts to find new
work.
Before we delve too deeply into these topics, it's
critically important that we take a moment to understand the
true dimensions of the problem that we're facing. I think the
problem of long-term unemployment is something that tends to
hide in the shadows of our economy, either because the
unemployed aren't terribly visible or because we want to sweep
the problem under the rug and pretend it's not there.
But the crisis of long-term unemployment has become too big
to ignore. We're told by statistics that the portion of
unemployed workers who have been out of work for at least 6
months hit 40 percent in December 2009 and has remained above
40 percent ever since.
This chart, I think, is illustrative of where we are since
we started tracking the data in 1948. This is the highest rate
of long-term unemployment that we have ever had since 1948. If
you can see from 1948 on through the 1980s and 1990s--one time
it peaked up at about 25 percent in about 1980 or 1981, but
nothing above 40 percent like we're having now, and not for as
long. It's just never been this high, since we started tracking
this in 1948.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Today, there are 5.6 million Americans who have been
looking for work at least 6 months and 4 million for more than
a year, actively looking for work. That's not counting those
who have given up, who aren't counted as looking for work but
who would love to have a job. But they've been out of work for
so long that they aren't looking.
Some groups have been disproportionately affected by this
downturn. Individuals with disabilities are one such group.
We've seen millions of workers drop out of the labor force
since the recession started because of lack of jobs. But
persons with disabilities left the workforce at six times the
rate of the general population, six times. African-Americans
are also disproportionately affected by unemployment. The
unemployment rate among African-Americans is more than twice
that of Caucasian Americans.
Now, you've got to ask why. These are staggering numbers,
and they reflect enormous hardships for people who are our
friends, our neighbors. Make no mistake--workers who are
struggling with long-term unemployment are in a profound
predicament. They're not sitting at home on their couch and
eating candy and drinking beer and enjoying their leisure time.
Most are suffering enormous financial and emotional, emotional
strains.
For those fortunate enough to get unemployment benefits,
they still have to survive on an average benefit of $300 per
week. That's not for an individual. That's for a family. And
the bills don't stop coming when someone loses his or her job.
The rent, mortgage, electricity, car payments, food, gas,
medicine, school supplies all still have to be paid.
Meanwhile, unemployed Americans must get up day after day
and search for work in the worst economy in generations,
typically facing rejection after rejection. And I read some of
the testimonies last night. I read them all, and there's
example after example there.
The primary challenge these workers face is intense
competition for the few jobs available. Even according to
official numbers, there are more than 13 million people
actively looking for work in this country--four workers for
every job. There's strong evidence that the official numbers
dramatically understate the problem.
There are millions more people with part-time jobs out of
necessity who want full-time jobs. They had full-time jobs.
They now have part-time jobs. There are others who have stopped
looking for work because they think it'll be fruitless,
although they'd take a job if they could get one. When you add
it all up, we're talking about nearly 28 million unemployed and
underemployed people. That's eight workers for every job
available.
So part of the problem that long-term unemployed workers
face is a numbers game. The job market is a game of musical
chairs. There are millions of workers left standing when the
music stops. But, again, it's not just about numbers. There are
many other barriers for people who have been out of work for
many months.
We now know that older workers face unique challenges. Not
only have many of them gone through their retirement savings,
many have lost the home they spent decades paying a mortgage
on. Many have been unable to send their kids to college. And on
top of that, they face the indignity of being passed over in
favor of younger workers, simply because of their age or
because they're considered overqualified. Many face negative
stereotypes, such as they are not energetic enough for the job.
Still other workers have learned the hard way, that they
won't be considered by certain employers because they've been
unemployed for too long. This is something new to me. I had not
realized that until I started reading all of your testimonies
about how there are actually ads, ads out there for jobs
saying, if you're unemployed, don't apply. Talk about gross
discrimination.
In a classic catch-22 situation, many workers who have been
financially devastated by the recession face credit checks that
keep them from earning an income and thus improving their
credit. So they have a credit check, but in order to get their
credit rating up, they need a job. But they can't get a job
because they have a bad credit history.
In addition, financial hardships often prevent workers from
having the mobility they need to pursue new work. Many workers
would like to move in order to take advantage of a new
opportunity they've heard about elsewhere. But the mortgage is
under water. The house can't be sold. They've been out of work
for so long they don't have enough money.
I was just talking with a young woman in Iowa on Monday who
had heard about job opportunities elsewhere, but because she
has two young children and her mother takes care of the kids
when she works part-time, she can't afford to move, because
that's the only daycare she has available to her.
While these are just a few of the challenges facing
unemployed Americans, today's diverse panel of witnesses will
provide us with further insights. We'll hear from an expert who
has studied these issues for decades, from a church pastor who
has counseled many unemployed workers and tried to help them
find new opportunities, and from a worker who has faced long-
term unemployment in her own life and is still trying to find
work. I look forward to hearing all their stories and getting
their insights about the causes of the crisis, the extent of
it, and what steps we might be able to take.
I can't think of a more important or timely topic for this
committee's consideration. I thank everyone for being here
today. And, again, I'll just repeat for emphasis sake it's not
just the numbers. It's the human cost in dashed hopes, the
destruction of the spirit, and the declining of the confidence
that people have in the ability of our country to provide the
kind of opportunity and jobs that our parents and grandparents
had.
And with that, I will yield to Senator Enzi.

Opening Statement of Senator Enzi

Senator Enzi. I thank you, Mr. Chairman. Good morning.
The topic we're discussing today is one of the most
difficult issues facing our Nation--the worst period of long-
term unemployment on record. The most recent job numbers told
us that 43 percent of the unemployed were long-term, meaning
individuals who were out of the workforce 27 weeks or longer.
The small drop in the unemployment rate from 9 percent to 8.6
percent was largely attributable to almost half a million
Americans giving up their search for employment entirely.
The most helpful thing we as a Congress can do, I think, is
to help foster an environment that encourages job creation. The
Bureau of Labor Statistics data proves this point. We have 13.3
million unemployed Americans seeking work and 2.6 million who
want to work but have given up the job search. Yet we have just
3.4 million job openings.
Unfortunately, the solutions being presented here today
fail to acknowledge that the biggest barrier to getting a job
for most unemployed people is the lack of jobs available.
Instead, we're going to discuss misguided legislation that will
actually discourage new hiring and harm long-term unemployed
individuals the worst. I'm certainly glad to have this
opportunity to explain the negative consequences that will
arise from the proposed Fair Employment Opportunity Act. But I
also would like to speak about the real solutions we have at
hand to address unemployment.
The truth is that we have several opportunities to allow
private-sector job creation to dramatically increase which the
current Administration is blocking. Unemployed Americans should
know that decisions by President Obama are directly preventing
the creation of thousands of new, well-paying, private sector
jobs in projects widely supported by labor unions. These jobs
could be created without raising taxes or increasing our
crushing national debt by another dime.
While it is clear that the historic drop in job creation
over the last 3 years is the biggest barrier facing unemployed
Americans, I will set that aside and address some of the other
barriers they face. One that I worked on to address for many
years is the need for more targeted job training. Individuals
who stay out of the workforce for longer periods of time often
have skills that do not match the current job openings in their
area. The longer they stay out, the more likely they may face
skill deterioration.
My colleagues know that I strongly believe we must do more
to improve Federal job training programs. For the past several
Congresses, one of my major priorities has been updating and
upgrading the Workforce Investment Act. This year, I spent
countless hours negotiating this legislation with colleagues on
this committee. It's hard to imagine a bill more appropriate
for these difficult economic times. However, once again, I was
disappointed the bill was not brought to markup.
In past Congresses, similar bills have received unanimous
support in both the HELP Committee, which has reported it out
twice, and the full Senate, which has passed it twice. If you
really want to do something to address the barrier to
reemployment, pass the WIA reauthorization. The Workforce
Investment System provides employment, job training, and
education services to over 9 million people a year.
The WIA reauthorization bill remains a casualty of
Congress' inability to overcome its worst partisan instincts.
The bill, which I've been negotiating with Senator Murray,
Senator Isakson, Senator Harkin, and others, would specifically
improve coordination of job training services for unemployment
recipients in six important ways.
For example, it would require that all unemployment
insurance recipients get referrals to and application
assistance for training and education resources and programs,
including Federal Pell grants and WIA training and education
programs. For unemployed workers struggling to gain the skills
they need to land a good job, the bill would be a lifesaver.
The sustained economic recession we have faced the past 3
years has put a severe strain on American families and
government safety net systems. With over 20 million Americans
drawing expanded unemployment benefits over the last year, 30
States have depleted their unemployment insurance funds and
begun to borrow from the Federal Government. More States are on
their way to borrowing. The worst part is that repayment will
require raising payroll taxes in most cases, which is a direct
job killer.
This crisis has to be addressed. Unfortunately, some of the
solutions that have been proposed are neither helpful nor
necessary and will benefit plaintiff lawyers more than
unemployed Americans. The Fair Employment Opportunity Act is an
example of this. This bill responds to the belief that the
primary reason for the most extended period of long-term
unemployment on record is discrimination. The allegation is
that employers refuse to hire unemployed people and
discriminate against them. The basis for this allegation is
purely anecdotal evidence. There's no empirical support for it
whatsoever.
I used to own a shoe store with my wife, and as a former
employer, I can tell you that there are just as many reasons to
hire someone without a current job as there are to hire someone
with one. It's easier to hire someone not currently employed. A
person without an existing commitment can start work
immediately, and may be less costly to employ since there would
be no question of matching previous salary and benefits.
This straw man of discrimination is based upon employment
ads that state that some level of current employment or
experience is required. The practice is being exaggerated in
almost every respect, and the medicine would do more harm than
the disease.
First, let me note that the job ad language in question is
far from widespread. The number of so-called discriminatory ads
makes up a very small percentage of all ads posted. The study
cited here today reviewed over 1 million job advertisements
from 4 online sites within a 4-week period and only found 150
violations.
An analysis of one online job site found 1 in 10,000 or
one-one hundredth of 1 percent of their ads included such
language. Further, the language itself does not establish any
proof of discrimination. Indeed, many of the ads cited as
evidence in these reports are seeking employees with up-to-date
skills and valid certification in highly technical industries
such as nursing. It should not be surprising that a hospital
would want to hire someone as a nurse who is, indeed, legally
qualified to be a nurse.
Against this straw man, the Fair Employment Opportunity Act
would erect costly legal liabilities that will discourage new
job creation. This bill would actually harm the long-term
unemployed who may not have the kind of network contacts their
cohorts had to find a job. Any reasonable employer will
consider looking to his own network of employees, friends, and
family to fill open positions rather than opening themselves to
a lawsuit by placing a help wanted ad.
The mere placement of an ad even without any language
regarding employment status could be the basis of a lawsuit
from as many unemployed individuals as could have conceivably
seen the ad. It would then be the burden of the employer or
employment agency to prove that it did not take employment
status into account when making the decision of who to consider
and hire.
Small businesses of 15 or more employees would be subject
to these lawsuits, and they'd find them costly to defend, with
the threat of daily damages of $1,000 a day per violation plus
interest, punitive damages, and injunctive relief. Small
employers facing large class action lawsuits would feel
pressured to settle. There's no doubt this bill would create a
profitable new field for plaintiff attorneys, but it will be to
the detriment of unemployed Americans.
I hope we can set this misguided legislation aside and talk
today about real solutions for Americans who have been
unemployed for too long without raising taxes or increasing our
crushing national debt. We could add thousands of new well-
paying private sector jobs that will get the economy going
again without spending another dime.
I'm referring to the construction of the Keystone XL
Pipeline, a project that President Obama halted last month in
response to concerns from environmental lobbies. This project
would create 20,000 new jobs immediately that will grow to more
than 500,000 U.S. jobs. These staggering numbers show why five
major unions and their Canadian affiliates have stated strong
support for the project. With the chairman's consent, I'll
place their statements in the record.

[The information referred to may be found in Additional
Material.]

Senator Enzi. The Keystone XL Pipeline will also create
energy security that lessens our dependence on unfriendly
nations. Estimates indicate that it will bring in $138.4
million in annual property taxes for State and local
governments and $6.5 billion in personal income for American
workers.
This massive private sector job creator is simply a win-win
for Americans. But it isn't happening because the White House
has decided to step in and delay the project until after the
next election. This is a very clear case of the Administration
erecting an unnecessary and political barrier to private sector
job creation. Americans deserve an administration that will
lead us out of this dismal period of long unemployment, not
erect barriers to sustain it.
I look forward to the testimony of Mr. John Meyer, who came
here today from Winner, SD, to discuss how his small business
and entire community will grow if the Keystone XL Pipeline were
allowed to move forward. I know he's on a little bit of a time
constraint, because he's also the Santa Claus for his community
and has to get back to fill that role.
Some of the other barriers the Administration has erected
include the crushing moratorium on oil drilling in the Gulf of
Mexico, the slow walking and denial of mine permits, the anti-
employment incentives imposed by mandates in the new healthcare
law, the burden of thousands of pages of new regulation making
employers uncertain of their ability to survive, and the labor
law persecution of those bold enough to expand in non-right to
work States. Even attempts to encourage private sector job
creation have become politicized--examples of crony capitalism
and poor investment, such as $535 million of taxpayer dollars
in Solyndra that has been made.
Taken together, the negative mood of the country is easy to
understand. I hope we can serve the American people well today
by discussing real solutions to high unemployment. I look
forward to hearing the testimony of all of the witnesses, and
thank you for your presence today.
I yield the floor.
The Chairman. Thank you, Senator Enzi.
We'll now turn to our panel. We'll go from left to right.
Christine Owens is the executive director of the National
Employment Law Project. The National Employment Law Project is
a national workers' rights advocacy group dedicated to
promoting policies that create good jobs, promote workers'
rights, and help unemployed workers regain their economic
footing.
Prior to joining NELP, Ms. Owens held a variety of public
interest and public sector positions advancing employment
rights. She's a graduate of the College of William and Mary and
the University of Virginia Law School.
Next is Reverend Dr. Marvin A. Moss, a senior pastor at
Cascade United Methodist Church in Atlanta, GA. This church
operates the Cascade Career Network that has provided support
to hundreds of local unemployed workers. Pastor Moss has
counseled many of these workers and will share some of their
stories with us today. Pastor Moss is a graduate of Hampton
University, holds a Master of Divinity degree from Gammon
Theological Seminary and a Doctor of Ministry degree from Drew
University.
I just wanted to add also that one of our valuable members
of our committee is Senator Isakson, who has other
responsibilities to meet this morning. And he just came up and
spoke very, very highly of you and knows you personally, and he
expressed his regret that he could not be here for your
testimony.
Donna Stebbins of Phoenix, AZ, is a former call center
worker who has been unemployed since April 2010. She has
decades of work experience in a variety of fields, from
waitressing to 15 years as a counselor for the developmentally
disabled and mentally ill. She has an Associate of Applied
Science degree in counseling from Rio Salado Community College
in Phoenix.
Mr. John Meyer is the owner of Office Products Center, a
small business in Winner, SD, and is a former president of the
South Dakota Retailers Association.
All of your statements will be made a part of the record in
their entirety, and we'll just go from left to right, and if
you could just sum up your testimony in 5, 7, 8 minutes,
something like that, we'd be most appreciative so we can have a
dialog.
Ms. Owens, welcome and please proceed.

STATEMENT OF CHRISTINE OWENS, EXECUTIVE DIRECTOR, NATIONAL
EMPLOYMENT LAW PROJECT, WASHINGTON, DC

Ms. Owens. Thank you so much and good morning, Senator
Harkin, Senator Enzi and members of the committee. I appreciate
the opportunity to be with you today on behalf of the National
Employment Law Project to discuss the barriers that are facing
the long-term unemployed as they seek to get back to work.
We interact regularly with these men and women who have
lost their jobs over the last several years and have been
looking for work for months and years. We hear their stories
about the challenges they encounter in simply trying to get an
interview, much less get a job. They have pursued every lead.
They have applied for hundreds of jobs. They have upgraded
their skills. They have made clear their willingness to
relocate, to work for less pay, or to do jobs below the skills
and education they have acquired, and still they cannot find
work.
As you alluded to, Chairman Harkin, the principal reason
these roughly 6 million men and women are unable to find work
is the deep jobs deficit the Nation is experiencing. Restoring
employment to levels that existed before the recession would
require the addition of roughly 11 million new jobs, taking
into account both the jobs that we have lost during the
recession and the recovery as well as the growth in working age
population.
While job growth over the last 6 months has roughly kept up
with population growth, it has still fallen well short of what
we need. In order to restore employment to pre-recession levels
within 3 years, we would need to add roughly 400,000 jobs a
month. On average, we've added 135,000, so less than a third of
what's needed.
And as you noted, Senator Harkin, there are four officially
unemployed workers for every single job opening, meaning if we
filled every single job opening, we would still have close to
10 million officially unemployed workers looking for work. And
on top of that, we have tens of millions of part-time workers
who want full-time jobs, as well as men and women who have
dropped out of the labor force.
The second reason that long-term unemployed workers are
having difficulty finding work is that employers and recruiters
are not considering them simply because they are unemployed. As
Senator Enzi noted, NELP and other researchers have documented
examples of instances in which job postings have included
language that explicitly limits applications to those who are
currently employed, and in some instances have even said
unemployed candidates will not be considered.
There is, admittedly, no official data on the extent to
which this practice occurs, but nor is there official data on
the extent to which individuals are excluded for jobs for other
reasons that are arbitrary or discriminatory, such as their
race or gender or their veteran status. The fact is there is
evidence that this is happening. And perhaps even more
compelling than the ads themselves are some of the statements
of human resource officers, recruiters, and employment agency
representatives.
Those who have been willing to go on the record--for
example, a vice president of Adecco Group North America, which
is the world's largest staffing firm, told CNN.com last year
that companies' interest only in applicants who are currently
working is more prevalent than it used to be, and that in his
own personal experience, in three out of the four last
conversations he had had on average about job candidates, the
requirement of a current job always came up.
A New Jersey human resources consultant specializing in
media and publishing jobs commented that most executive
recruiters won't look at a candidate unless they have a job,
even if they don't like to admit it. And the first question she
is always asked is whether the candidate is working or not, and
she's told if they're not working, the employer is not
interested.
A healthcare head hunter reported that he has trouble
placing jobless pharmacists because the reality of today's job
market is that employers want somebody who's wanted, and the
fact that someone's already employed indicates that they're
wanted. And another executive recruiter who has worked for
major staffing firms for 20 years said, ``I can assure you, as
a recruiter, you get an HR director on the phone--they tell you
point blank, `We want someone who currently has a job.' ''
These accounts are corroborated in stories that NELP hears
from jobless workers, many of whom have years of experience
that are relevant to jobs--they are legally qualified, and
otherwise qualified for the jobs they are seeking. They are
often solicited by recruiters, but when they acknowledge their
unemployment and, particularly, their long-term unemployment,
they are told that their applications will not be referred. The
organization US Action released a report last week which also
documents numbers of instances of individuals who have
experienced this same practice.
Excluding jobless workers from consideration for jobs for
which they are qualified--and I want to emphasize for jobs for
which they are qualified--only because of their unemployment
status not only hurts these workers and their families. It is
bad for our economy. It increases the demand for income support
and social services support, and it squanders the wealth of
human capital that these men and women have spent decades
developing and honing. We need this.
A third and critical barrier, again, as you alluded to,
Senator Harkin, is the increased reliance on credit background
screening for employment. The Society for Human Resource
Management reports that between 1998 and 2010, the share of
employers that screen credit ratings grew from 25 percent to 60
percent. And we know that has a serious impact on the long-term
unemployed.
The John Heldrich Center at Rutgers, which has recently
surveyed unemployed workers, has found that at least a quarter
of the long-term unemployed have missed credit card payments,
taken on credit card debt, and missed mortgage payments because
of job loss and corresponding decline in income. And the
Financial Literacy project found that the rise in bankruptcies
among unemployed workers between 2008 and 2010--that
bankruptcies had increased 24 percent.
So these are some tangible barriers that have a huge impact
on the ability of long-term unemployed workers to find jobs.
Thank you very much.
[The prepared statement of Ms. Owens follows:]
Prepared Statement of Christine L. Owens
The National Employment Law Project (NELP) is a 501(c)(3) national
non-profit organization that engages in research, education, litigation
support and policy advocacy on issues affecting low wage and unemployed
workers. In partnership with national, State and local organizational
allies, NELP works to maintain strong Federal and State programs of
unemployment insurance benefits that are providing a lifeline of
support for individuals who, through no fault of their own, remain
jobless and pumping vital stimulus into local economies. On an ongoing
basis, NELP also engages directly with unemployed workers to help them
assess and address the problems they are facing in trying to find work
in an economy that, though growing modestly, is not creating enough
jobs to meet the employment demand. These direct interactions with
unemployed workers, particularly those whose unemployment has exceeded
6 months--the ``long-term unemployed''--combined with our ongoing
empirical and policy research informs NELP's understanding of the
barriers the long-term unemployed face in getting back to work.
As we address below, the principal barriers to reemployment include
a woeful inadequacy of jobs; discriminatory exclusion of the unemployed
from consideration for job openings, simply because of their
unemployment status; and the use of employment screening devices such
as credit background checks, that have an especially harsh impact on
individuals who, because of job loss, experience financial losses
resulting in substantial debt, home foreclosures, and personal
bankruptcies. Other factors, such as social isolation, depression and
anxiety, that often accompany long-term unemployment, as well as
limitations on access to tools needed for job search--ready
availability of computers and transportation, for example--play a less
tangible but nevertheless real role in affecting access to employment
opportunities.
the long-term unemployment crisis
America faces a near-unprecedented crisis of long-term
unemployment. Of the 13.3 million officially unemployed workers last
month, 43 percent--nearly 6 million--had been unemployed for 6 months
or longer. Roughly one-third of the long-term unemployed have been
without work for a year. Average durations of unemployment in November
reached a record high of almost 41 weeks. As NELP recently reported,
the rate of long-term unemployment has equaled or exceeded 40 percent
for roughly the last 2 years, the longest stretch of such high long-
term unemployment since this data was first reported in 1948.\1\
---------------------------------------------------------------------------
\1\ National Employment Law Project, ``Unemployment Insurance:
Jobless Workers and Our Economy Hanging on by a Thread,'' October 2011,
p. 4 (url: http://www.nelp.org/page/-/UI/2011/
NELP_UI_Extension_Report_2011.pdf?nocdn=1).
---------------------------------------------------------------------------
A recent survey and corresponding report by the John J. Heldrich
Center for Workforce Development of workers who had lost jobs during
the Great Recession found that 43 percent were reemployed (either full-
time or part-time) and 41 percent were unemployed and actively looking
for work. Half of those remaining unemployed had been jobless for more
than 2 years. Continuing joblessness among the long-term unemployed was
not because they were not looking for work. According to the Heldrich
Center report, the unemployed participated in substantial job search
activities, with three-quarters having applied for a job within the
preceding month and two-thirds having searched newspapers and online
job postings. Analysis of survey results showed that ``Unemployed
workers who received [unemployment insurance] benefits were more likely
to have been proactive in seeking work than those who did not receive
UI'' (emphasis in original), with benefits recipients reporting ``more
hours devoted to the job search and more frequently contact friends and
examine job postings.'' \2\
---------------------------------------------------------------------------
\2\ John J. Heldrich Center for Workforce Development, ``The Long-
Term Unemployed and Unemployment Insurance: Evidence from a Panel Study
of Workers Who Lost a Job During the Great Recession,'' November 2011,
p. 2 (url: http://www.heldrich.rutgers.edu/sites/default/files/content/
UI_Unemployed_Brief.pdf.
---------------------------------------------------------------------------
The principle reason for sustained high rates of long-term
unemployment, and the greatest barrier to reemployment facing the long-
term unemployed, is that employers are simply not creating enough jobs
to put Americans back to work. As described below, the Nation's jobs
hole is deep and competition for job openings is stiff.
inadequate job creation is the principle barrier
to work for the unemployed
Although job creation has been anemic since job growth resumed in
the summer of 2010, the good news is that over the past 6 months,
average job growth has been roughly on par with population growth.
Nevertheless the jobs deficit--the hole we need to fill to restore
employment levels to pre-recession status--remains deep.
As shown in NELP's recent analysis, the economy must add another
6.3 million jobs to make up for those lost during and in the aftermath
of the 2007 recession, along with an additional 4.6 million jobs to
account for growth in the working age population since then.
Altogether, this amounts to a deficit of 10.9 million jobs. Closing
this gap in 3 years would require the addition of 400,000 jobs per
months on average--a level more than three times greater than average
job growth (113,500 jobs) of the past 6 months.\3\ Plainly, job
creation is simply not keeping up with the demand for work, either from
the unemployed or from new workforce entrants.
---------------------------------------------------------------------------
\3\ National Employment Law Project, ``Economy faces deficit of
10.9 million jobs,'' December 2, 2011 (url: http://www.nelp.org/page/-/
UI/2011/NELP.jobs.deficit.november.2011.pdf?nocdn
=1).
---------------------------------------------------------------------------
Comparing new job openings to official unemployment levels
underscores the gap between the supply of individuals who want to work
and the opportunities available to them. In September (latest
comparative data available), there were more than four officially
unemployed workers (13.9 million) for every new job opening (3.4
million). Under the best of circumstances, job competition would be
stiff when the ratio of applicants to openings is greater than four to
one. But even this figure understates the real level and intensity of
job competition as it relates to the unemployed. Official unemployment
counts do not include the under-employed--those who want full-time
hours but are able only to get part-time work--or individuals
``marginally attached'' to the labor force, that is those who want to
work and have looked for jobs in the past year but not in the preceding
month. Including these individuals in official unemployment counts
(raising the September count from 13.9 million to 25.6 million) would
nearly double the number of potential unemployed or under-
employed applicants for each vacancy. In addition, in the most recent
employment report (for November), labor force participation declined by
more than 300,000, and adding these individuals to the official counts
of the unemployed would further increase the ratio of unemployed
workers to job openings. Of course, anecdotal evidence suggests there
are numerous applicants for every job opening, with thousands showing
up at job fairs.
Thus, the principal barrier the unemployed, particularly the long-
term unemployed, face in finding work is the sheer absence of jobs.
This is not a crisis likely to be ameliorated anytime soon: The Federal
Reserve Board's most recent analyses project that unemployment will not
fall below 8.5 percent by the end of 2012 and that even at the end of
2014, the economy will not have returned to full employment (which the
Fed posits as a rate between 5.2 and 6.0 percent--though NELP believes
that is still an unacceptably high rate).\4\
---------------------------------------------------------------------------
\4\ Board of Governors of the Federal Reserve, Press Release and
accompanying charts, November 2, 2011 (url: http://
www.Federalreserve.gov/newsevents/press/monetary/20111102b.htm).
---------------------------------------------------------------------------
discrimination against the unemployed because of their unemployment
status limits job opportunities
Stories suggesting systematic exclusion, often blatant, of
unemployed workers from consideration for jobs began to emerge early in
the summer of 2010. In May and June 2010, local media in Atlanta along
with the Huffington Post and CNNMoney.com reported that Sony Ericsson,
a global phone manufacturer that was expanding operations in Georgia,
had posted a job announcement for a marketing position that explicitly
said ``No Unemployed Candidates Will Be Considered At All.'' \5\
Similar documented accounts of such exclusions reported around the same
time included:
---------------------------------------------------------------------------
\5\ 11Alive.com, ``Job Listing: Unemployed Need Not Apply,'' http:/
/www.11alive.com/rss/rss_story.aspx?storyid=144719, May 31, 2010; Laura
Bassett, ``Disturbing Job Ads: `The Unemployed Will Not Be
Considered','' The Huffington Post, http://www.huffingtonpost.com/2010/
06/04/disturbing-job-ads-the-un_n_600665.html, June 4, 2010, updated
Aug. 8, 2010; Chris Isidore, ``Looking for work? Unemployed need not
apply,'' CNNMoney.com, http://money.cnn.com/2010/06/16/news/economy/
unemployed_need_not_apply/index.htm, June 16, 2010.

Numerous listings for grocery store managers throughout
the Southeast posted in the spring by a South Carolina recruiting firm,
Latro Consulting, which included restrictions against considering
unemployed applicants; the restrictions were removed after CNN
Money.com inquired about the practice.\8\
---------------------------------------------------------------------------
\8\ Isidore, op. cit.

Subsequent press reports confirm the practice of ads excluding
unemployed workers has continued.\9\ In July 2011, NELP published the
results of an informal sampling it undertook over a 4-week period in
the spring on four job-listing Web sites: CareerBuilder.com,
Indeed.com, Monster.com and Craigslist.com. In that survey, NELP
identified roughly 150 job ads that included exclusionary language that
implicitly or explicitly barred unemployed candidates, particularly the
long-term unemployed, from applying for openings--simply because of
their unemployment status and without regard to their qualifications
for the position.\10\ Indeed.com has since announced that it will not
include such restrictions in job postings on its Web site.
---------------------------------------------------------------------------
\9\ See, for example, ``Outlook poor for long-term unemployed,''
The Atlanta Journal Constitution, October 4, 2010 (http://www.ajc.com/
business/outlook-poor-for-long-657702.html); ``Employers Continue to
Discriminate Against Jobless, Think `The Best People Are Already
Working','' Huffington Post, October 8, 2010 (http://
www.huffingtonpost.com/2010/10/08/employers-continue-to-
dis_n_756136.html); ``Long-term unemployed face stigmas in job
search,'' USA Today, January 23, 2011; (http://www.usatoday.com/money/
economy/employment/2011-01-23-longterm-unemployed_N.htm); ``How
Employers Weed Out Unemployed Job Applicants, Others, Behind The
Scenes,'' Huffington Post, January 14, 2011 (http://
www.huffingtonpost.com/2011/01/14/unemployed-job-applicants-
discrimination_n_809010.html).
\10\ National Employment Law Project, ``Hiring Discrimination
Against the Unemployed: Federal Bill Outlaws Excluding the Unemployed
From Job Opportunities, as Discriminatory Ads Persist,'' July 12, 2011,
p. 2 (url: http://www.nelp.org/page/-/UI/2011/unemployed.
discrimination.7.12.2011.pdf?nocdn=1).
---------------------------------------------------------------------------
While discrimination against the unemployed is sometimes overtly
reflected in ads, at NELP we also hear regularly from unemployed
workers--mostly older workers--who despite years in the labor force and
significant directly relevant experience are nevertheless told they
will not be referred or considered for employment, once recruiters or
potential employers learn they are not currently working.
That happened to 53-year-old Michelle Chesney-Offutt from Illinois,
who earlier wrote NELP that after working successfully for 19 years as
an IT help supervisor, she was laid off in 2008 due to the downturn.
Many months into her job search, a headhunter contacted her, excited
about her qualifications for a position he was retained to fill. The
excitement faded, however, when he learned she had been unemployed for
more than a year. As Ms. Chesney-Offutt put it, ``When he realized
this, he was very apologetic, but had to admit to me that he would not
be able to present me for an interview due to the `over 6-month
unemployed' policy that his client adhered to.'' The headhunter, she
told NELP, explained to her that his client expressly prohibited him
from referring workers who had been unemployed for 6 months or more.
When we last spoke to Chesney-Offutt, she was still unemployed, had
exhausted all unemployment benefits, was restructuring her mortgage,
and had applied for SNAP (food stamps) and welfare--a first for her.
Kelly Wiedemer, a 45-year-old former operations analyst in
Colorado, wrote describing a similar experience. She responded to a
local staffing firm's November 2010 posting for a financial systems
analyst experienced in implementing a software package she had put in
place in her previous job. The agency called her immediately but after
the recruiter learned of Ms. Wiedemer's unemployment, her enthusiasm
cooled. The recruiter told Wiedemer that she would submit her resume
but that her ``long employment gap was going to be a tough sell.''
Wiedemer later followed up to express her continuing interest but was
not called for an interview.
Similarly, 44-year-old Angela Smith of Texas, an experienced
pharmaceutical sales rep who had posted her resume online, wrote to
share an email she had received from an executive recruiter for a bio-
pharmaceutical company seeking a specialty sales representative. The
recruiter had sent the email after seeing Ms. Smith's resume--but the
outreach was of little value to Ms. Smith, since the email included an
express caveat, required by the employer, that ``Candidates must be
currently employed in pharmaceutical sales, or have left the industry
within the last 6 months.''
Finally, there's 55-year-old Ginger Reynolds from California, who
wrote to tell us about receiving a call from a recruiter for a 6-month
contract position as a software systems engineer. The recruiter thought
Ms. Reynolds was a good fit for the job but upon learning of her
unemployment, told her she could not submit her resume because she had
not worked in the past 6 months.
There is no official data on how frequently unemployed workers are
denied consideration for jobs because of their employment status, but
the openness of the
exclusionary ads noted above and the experiences jobless workers shared
with NELP suggest the practice may be fairly common. That suspicion is
borne out by comments of human resource consultants and recruiters
willing to go on record about the practice. Rich Thompson, vice
president of learning and performance for Adecco Group North America,
the world's largest staffing firm, told CNNMoney.com last June that
companies' interest only in applicants who are currently working ``is
more prevalent than it used to be . . . I don't have hard numbers,'' he
said, ``but three out of the last four conversations I've had about
openings, this requirement was brought up.'' \11\ Similarly, Lisa
Chenofsky Singer, a New Jersey human resources consultant specializing
in media and publishing jobs, commented that, ``Most executive
recruiters won't look at a candidate unless they have a job, even if
they don't like to admit it.'' According to Ms. Singer, the first
question she is generally asked when recommending a candidate is
whether the candidate is currently working--and if the candidate is
unemployed, the recruiter is not interested.\12\
---------------------------------------------------------------------------
\11\ Isidore, op. cit.
\12\ Ibid.
---------------------------------------------------------------------------
A January 2011 article posted on The Ladders, an online job search
resource site, further corroborates the widespread exclusion of jobless
workers from employment opportunities.\13\ According to one quoted
source, Matt Deutsch, communications coordinator at TopEchelon.com, the
tendency to exclude the unemployed is ``growing.'' Deutsch said:
---------------------------------------------------------------------------
\13\ ``Uninterested in the Unemployed,'' (https://
recruit.theladders.com/recruiter-resource-center/uninterested-in-
unemployed).

Not all companies are doing this, but it certainly has become
an issue. What's startling are the lengths to which companies
and recruiters are going to communicate this, such as including
the phrase ``Unemployed candidates will not be considered''
right in the job posting.\14\
---------------------------------------------------------------------------
\14\ Sharon L. Florentine, ``Uninterested in the Unemployed,'' The
Ladders, https://recruit.theladders.com/recruiter-resource-center/
uninterested-in-unemployed, Jan. 2011.

The Chairman. Thank you, Ms. Owens.
Dr. Moss.
I want to ask unanimous consent to put a longer testimony
from Dr. Moss in the record that you had requested.
Reverend Moss. Yes, sir.
The Chairman. Without objection.
Go ahead, Dr. Moss, please.

STATEMENT OF REVEREND DR. MARVIN ANTHONY MOSS, SENIOR PASTOR,
CASCADE UNITED METHODIST CHURCH, ATLANTA, GA

Reverend Moss. Thank you, Chairman Harkin, Ranking Member
Enzi, and members of the committee for the opportunity to be
with you today. I lead a congregation of over 4,000 members of
every broad demographic, ranging from cooks, clerks, drivers,
teachers, active and retired military, corporate professionals,
executives, business owners, doctors, judges, all who have been
affected by our current economy.
This church is the same church where Reverend Dr. Joseph
Lowery pastored, and so a part of the DNA woven into the fabric
of who we are is a passionate concern and social awareness of
justice and equality. And what we have experienced through the
testimonies of individuals, the long-term unemployed, are
indications that it is not fair out there.
With me today is Sanquinetta Dover, a Cascade member seated
behind me, of Dover Staffing. She's the owner of Dover
Staffing, and she also owns Dover Training Institute. And she
leads her company in training and retooling individuals to get
back into the workforce. She's a WIA provider, has been put on
the SBA 100 list, and crafted a program to help the survivors
of fallen soldiers with financial counselors in helping them
deal with providing for their families.
Also with me is Valerie Jones, who is the chair of our
Cascade Career Network. Valerie's ministry focuses on
informing, encouraging, and empowering the unemployed and
underemployed--long-term unemployed with techniques, skills,
and expectations of the job search. Valerie's team leads
individuals in an effort to speak to the spiritual, emotional,
and psychological needs of individuals, because when you lose
your job, you lose a part of who you are.
It takes a moment to get back in the race or trying to find
a job, because you also have to deal with the dynamics of the
family. And as a faith community, we're looking at making sure
that the family is whole during this time of economic upheaval.
Some of the barriers that we have been made aware of
include those wherein you've worked for a company for 15 years,
and you lose that job. There are no 6-month career transition
programs paid for by the company. No one has brought in the
Department of Labor or told you that there may be assistance.
You've simply been notified that you've been phased out or your
job has been cut out.
And so now, even if you know of programs, you don't have
the resources to take part in those programs. And this speaks
to the importance of a partnership between the faith-based
community and the Government so that we can prepare
individuals, inform them of their rights and responsibilities,
and partner with the opportunities that are provided for by the
Government.
A second barrier would be access to the computer, to
Internet access, making sure that you're able to expand your
job search. At best, individuals can get 1 hour per day at a
local library--which more and more of them are being closed
because of budget constraints. And so now the church is having
to step in to provide assistance to individuals, helping them
expand their search.
Child care--you stopped child care when you lost your job,
one of the greatest expenses that there is. And if you do not
have family in your local area, then you are challenged beyond
measure, because you do not have anyone to assist you with
looking for a job by watching the children. And I don't think
that it would be appropriate to take the children with you on a
job interview, if you got the interview.
Finally, the insurance premiums--COBRA--who can afford
COBRA if you're unemployed? And so now you're going without
healthcare. If you have a chronic illness such as asthma or any
other illness requiring regular medication--you are being
bombarded by situations that make it even harder to get your
mind in a place where you can get in the job search.
I wish I could tell you about the number of families who
could have been saved if conversations had been created around
the immobilizing effect that a job loss has had--dealing with
the psychological impact, the emotional impact. And Valerie has
shared how so many have been empowered and encouraged just by
having someone pray with them and saying there is a way out of
this.
It is not laziness. People want to work. It is not a
situation of people just sitting around and saying, ``I'll take
all that the Government gives me.'' But it is working through
grief, disbelief, and devastation, and it takes a minute to get
there.
What we have found is that there are discriminatory
practices--recruiters screening applicants based on what a
person's name suggests in terms of ethnicity or what zip code a
person lives in. And I'm shocked and saddened that there are
people who have to walk 5 miles to get a job because public
transportation will not provide them the opportunity to get
there. And then there are instances where, given the distance
to your home and your job, individuals will not provide you
with that opportunity.
One of the things that we have found relative to the faith-
based initiative, Cascade Career Network, is that there are
opportunities that exist. But the providers of those
opportunities need to know that the long-term unemployed have
individuals speaking for them.
On Tuesday of this week, I was one of the speakers at the
Faith-Based Economic Development Summit held on the campus of
Alabama State University in Montgomery, AL. And one of the
facilitators, Dr. Christina Clamp, director of Community
Economic Development Center for Cooperatives and CED at
Southern New Hampshire University, stated that ``The faith
tradition goes beyond partisan political culture. We can take
this country beyond where it is.''
And so I share with you--how can there be a famine in the
land in the richest Nation on earth? People are hurting. They
are angry, and they are becoming increasingly disillusioned
with leadership at various levels.
Unemployment lines are full of Democrats, Republicans, Tea
Partiers, and independents; black, white, Latino Americans,
Asian Americans. Everyone is in this crisis. So we must look at
the fact that it is going to take a partnership. And we can
read in the New King James Version of the Bible, II Chronicles
7:14,

``If My people who are called by My name will humble
themselves and pray and seek My face and turn from
their wicked ways, then I will hear from Heaven and I
will heal their land.''

The faith community, especially the African-American
church, has been the bedrock for formulating ideas, birthing
movements, and changing hearts and minds. It is also not ironic
that Dr. King's final campaign upon his untimely death was the
poor people's campaign. We must take the lessons of the past,
utilize the knowledge of the present, and change the future for
all people.
Thank you.
[The prepared statement of Reverend Moss follows:]
Prepared Statement of Reverend Dr. Marvin Anthony Moss
My name is Marvin Anthony Moss and I am the Senior Pastor of
Cascade United Methodist Church located in SW Atlanta, GA. This is a
predominately African-American church and the same church where
Reverend Dr. Joseph Lowery served as pastor. Woven in the fabric of who
Cascade is as a faith community, built into their DNA is a social
awareness and passion for justice and equality for humanity.
Of the 50-plus ministries that are a part of Cascade, the one that
we have given particular attention is our Cascade Career Network
Ministry. This ministry, led by Valerie Jones (who is with me today),
focuses on nurturing and empowering individuals who are victims of the
current economic crises leaving them unemployed. Valerie leads a team
of individuals who speak to the spiritual, emotional and psychological
well-being of the unemployed. They help these individuals with resume
rewriting, sharpening interviewing skills, and networking.
Additionally, this team is privy to firsthand account of the
frustrating obstacles that these individuals face. Some of them have
been unemployed for a couple of years now yet they refuse to give up.
Valerie's team tries to encourage these individuals to not become
bitter but more intent in their resolve to find employment.
Some of the barriers that the long-term unemployed are facing
includes being labeled as lazy because they have been unemployed for so
long. They may find employment but they rely on public transportation
to get there. It would be safe to say that oftentimes public
transportation in the South has quite a bit of room for expansion.
Relocating is not an option given the current state of the real estate
market. Another obstacle or barrier is affordable quality daycare.
There are other instances where individuals are hired only to find out
later that it was a seasonal position.
There are small- to medium-sized business owners who would love to
hire individuals but find it economically impossible to do so.
There must be a public mantra of ``both/and''. Assistance from the
Government ``and'' an aggressive push from the Faith Community to
ensure that information is gathered and disseminated in laymen's terms
so that individuals are aware of rights, responsibilities and
opportunities.
I can say with passion that we have proven that this is not solely
an issue of economics. This country has some of the greatest economists
there are yet we are still dealing with the plight of the people.
We have an issue with the condition of the heart and it is going to
take the voice of the Faith Community to speak to the moral fiber of
this great country in order for us to consider our ways.
How is it that a famine can be declared in the richest Nation on
earth? People are hurting, they are angry and becoming increasingly
disillusioned with leadership at all levels. The unemployment lines are
full of Democrats, Republicans, Independents and some Tea Partiers! The
lines are full of blacks, whites, Asian-Americans and Hispanic
Americans not to mention numerous other ethnicities that make this
country the place where everyone wants to be--EVEN NOW!
On Tuesday of this week I was one of the speakers at a Faith-Based
Economic Development Summit held on the campus of Alabama State
University. One of the facilitators, Dr. Christina Clamp, director of
the Community Economic Development Center for Co-Operatives and CED at
Southern New Hampshire University, stated that ``the Faith tradition
goes beyond partisan political culture. We can take this country beyond
where it is''.
While I was there I went by Dexter Avenue Baptist Church. The
question that crossed my mind was, ``Dr King what should we do?'' The
answer in my heart was to tell the people to keep believing in the
power of God and the strength of a people united.
We can read in the New King James version of the Bible II
Chronicles 7:14,

If My people who are called by My name will humble
themselves, and pray and seek My face, and turn from their
wicked ways, then I will hear from heaven, and will forgive
their sin and heal their land.

This is not solely about economics, but it is largely about the
condition of our hearts.
Yours In God's Service.

The Chairman. Thank you very much, Dr. Moss. Very good.
[Applause.]
Thank you very much, Reverend Moss. Very profound.
Ms. Stebbins, welcome, and your statement will be made part
of the record also. Please proceed.

STATEMENT OF DONNA STEBBINS, PHOENIX, AZ

Ms. Stebbins. Thank you. Thank you, Chairman Harkin, for
the opportunity to testify before you and the Senators on this
committee today.
My name is Donna Lynn Stebbins. I'm 58 years old, and for
the first time in my life, I'm unemployed, apparently
unemployable due to my age, and uninsured. I grew up in Little
Rock, AR, raised by two very hardworking parents. They worked
hard, but didn't have a lot of money. When I turned 14, they
let me know that if I wanted extra things or spending money,
things like that, I needed to get a job.
That was easy enough. I started working summers, and I was
able to get my new shoes and my new school clothes and albums.
And I got to see movies and things like that that I wouldn't
have gotten to see if I had not have gotten my summer jobs, and
that was really important for me as a teenager, and thus began
my work life.
I was making $1.10 an hour then, and I did have things that
I would have had to have gone without if I hadn't gotten summer
jobs. I continued my work life during my adult years. I did
everything that was right to live the American dream. My
husband, who's in construction, and I moved to Arizona in the
1980s, and together we raised a family, bought two homes, and
we put what little bit we could in a 401(k). We never made a
lot of money, but we were doing good. We were doing just fine.
In 2008, we had to refinance our home in Phoenix and took
some cash out to do some home improvements, thinking this would
be a really good idea, because we could get the house fixed up,
and then when we retired, we could get a little money out of
the house for our place up in the mountains in Arizona. We were
under the impression that this would bring the value up--we
would have that little nest egg.
That didn't work out so well. It turns out our monthly
payment was now almost double. The mortgage industry tanked,
and our house was now approved at a much lower amount than it
was when we refinanced.
In April 2010, I was laid off from my job. Did I mention
that I'm 58 years old? In the last year and a half, I've
applied for more than 200 jobs. The interviews I've had, which
was only a couple of dozens, have been group interviews. That's
right--group interviews. Gone is the day when you can sit with
an employer one-on-one, tout your strengths, your work
experience, and let them know what an asset you could be to
their company. That's gone.
Today, it's me, a 58-year-old woman in group interviews
with 15 to 20 20- and 30-year-olds. They don't ask me a lot of
questions. They direct most of their questions to the younger
adults. If I am asked a question, it's usually related to
things like, ``Why would a woman your age want to work in a
shop where we sell younger women's clothing? '' Or another
question might be ``I see you've been unemployed for 6
months,'' or a year or 18 months, whatever time I had been
unemployed during that time period--and then having to explain
why I was unemployed, which--I thought everybody knew that
there just wasn't a lot of jobs out there.
But in June that same year, my husband was laid off. He's
been in the construction business for 28 years and had the same
job for over 20 years. He was one of the last let go, but he
was let go. He's an expert in his field, so he did get a job,
but he's making what he made 10 years ago. But he does have a
job, which--we're supposed to be real thankful that he does
have a job, even if he is making what he made 10 years ago.
Why does someone have to work at the rate that they made 10
years ago or work at the rate of someone with 10 years less
experience? There's a lot of work to be done out there, and
Rick deserves to make what he deserves. I should have a job.
Millions of the unemployed should have a job, a job at a living
wage.
Those high mortgage payments I was telling you about--well,
we couldn't make them anymore. It took a year of wrangling with
the bank to get our home refinanced. And after the threat of
foreclosure--with these people in the bank telling me that I
was going to do it their way or I could pack up my bags and get
out of my house. This is a house we purchased in 1995 and
raised three daughters in that house. So we swallowed our pride
and we did it their way, and we did save our home. We were
lucky to be able to save our home, so I'm thankful for that.
Health insurance--we don't have it anymore. We both have
medical issues that we literally have to ignore. Even with Rick
working--and his company does offer insurance--we can't afford
to pay for the insurance because we have to pay the mortgage
and all the utilities and the food. And we try to make sure
that we get Rick what medicine he needs to keep him healthy
enough to go to work so that we can continue to live.
At the time we were refinancing--the time we were working
on refinancing our home, my unemployment benefits were about
$216 a week after taxes, which is the maximum allowed in
Arizona. And that is the same time all of this was going on--
when I was trying to do the refinancing is when this was going
on.
Now, our oldest daughter was married October 30th of this
year. She and her husband had to pay for their own wedding.
We've gone through all our money in the past year and a half.
We've had to live off part of our 401(k) and everything else to
stay on our feet. Her having to pay for her wedding--our baby
having to pay for her wedding was the hardest thing that Rick
and I had to face. We didn't deserve this, and most certainly
she didn't deserve this.
After all that Rick and I have gone through, the groveling
we've had to do, the debt we've incurred because of the
mortgage broker, the praying with all of our might that one of
us don't get sick, the choosing medicine over the food so that
my husband can stay healthy enough to work, and having to ask
for rides for me to look for a job because I can't afford gas--
this is what killed us, is not being able to pay for my
daughter's wedding.
We didn't deserve that. We didn't do anything wrong. We
played by the rules. We worked all our lives. So why are we and
other people like us, the unemployed, suffering like this when
we did not do anything wrong.
I'm angry, I'm frustrated, and I will not stop telling my
story to others and telling others to tell their story. I'll
visit my elected officials. I'll write letters. I'll sign
petitions. I will sit in my Senators' offices where I'm at. And
that's why I'm here in Washington, DC, to tell you my story in
hopes that you and other lawmakers will hear what we have to
say and help the thousands of people like myself who just want
a job.
Thank you.
[The prepared statement of Ms. Stebbins follows:]
Prepared Statement of Donna Stebbins
Thank you Chairman Harkin for the opportunity to testify before you
and other Senators on this committee today. My name is Donna Lynn
Stebbins. I'm 58 years old and for the first time in my life I am
unemployed, apparently unemployable due to my age, and uninsured.
I grew up in Little Rock, AR, raised by two very hardworking
parents. They worked hard but didn't make a lot of money. When I turned
14, I was told that if I wanted spending money I would need to get a
job. Easy enough. I started working summers and was able to buy the new
shoes and clothes I wanted, and the albums I wanted, and I got to see
movies I wanted to see. At that time, we also had to buy our school
books, so I got to buy NEW books. All of this was pretty important to
me as a teenager. Thus, began my work life. At $1.10 an hour, I had
things I otherwise would have gone without.
I continued my worklife and during my adult years did everything I
thought was right to live the American Dream. My husband Rick is an
electrician and together we raised a family, bought two homes, and put
what little we could into our 401(k). We never made a lot of money, but
we were doing just fine.
In 2008, we refinanced our home and took some cash out to do some
home improvements. Thinking this was a really good idea, we spent about
$45,000 getting our somewhat rundown home ``spruced up.''
We were under the impression this would bring the value of our home
up; so when we retired and sold our home, we would have a nice little
nest egg. That didn't work out so well. Turns out, our monthly payment
was now almost double, the mortgage industry tanked, and our house was
appraised at a MUCH lower amount than it was when we refinanced.&
In April 2010, I was laid off from my job. Did I mention earlier
that I'm 58 years old? In the last year and a half I have applied for
more than 200 jobs. The interviews I have been on--a couple dozen--have
been ``group'' interviews. That's right, ``group'' interviews. Gone is
the day when you could sit one-on-one with a potential employer and
tout your strengths, your work experience and what an asset you would
be for their company. Today, it's me, a 58-year-old woman, surrounded
by 20- and 30-year-olds applying for the same job. Interviewers
directed their attention to younger applicants. Seldom was I asked a
question. I have yet to get a phone call from anyone.
In June of that same year, Rick was laid off from his job. My
husband is an expert in his field and has gotten a job after months of
being unemployed. He makes what he made 10 years ago, but he has a job
(we are supposed to be so thankful that he HAS a job). Why does he have
to work at a rate of someone with 10 years less experience? There IS
work to be done and Rick should be making what he deserves. I should
have a job. Millions of unemployed should have a job--a job with a
living wage.
Those high mortgage payments? Well, we couldn't make them anymore.
It took a year of wrangling with the bank to get our home refinanced
after the threat of foreclosure, with these people telling us we would
do it their way or pack up and get out of the house. The house we
purchased in 1985 and raised our daughters in. We had no choice but to
swallow what little pride we had left, and we did it their way. Health
insurance? We don't have it, and we both have medical issues we have to
ignore. Even with Rick working, we can't afford the cost of insurance.
I will add that this is the first time in our adult lives that we have
not been insured.&
At the same time we were working to refinance the house, my
unemployment benefits, about $216 a week after taxes--the maximum
allowed in Arizona--were cutoff, along with thousands of other
Arizonans.
Our youngest daughter was married on October 30. She and her
husband had to pay for their own wedding. We had gone through all of
our money a year and half before her wedding just to get by.
This was the hardest thing Rick and I had to face. We could not
give our precious daughter a wedding that she deserved. We did not
deserve this and she most certainly didn't deserve this.
After all that Rick and I have been through: the groveling we've
had to do; the debt that we have incurred because of the mortgage
broker; the praying with all of our might that we don't get sick; the
choosing medicine over food so that Rick can at least stay healthy
enough to work; having to ask for rides because I don't have gas money
. . . THIS is what almost killed us mentally and emotionally.
We didn't deserve this. We did nothing wrong. We played by the
rules and have worked throughout our lives. Why are we and other
working people suffering like this? I'm angry, I'm frustrated and I
will not stop telling my story and telling others to tell their story,
and I will visit my elected officials; I will write letters; and I will
sign petitions. And that's why I am here in Washington, DC, today to
tell my story to you in the hope that you and other lawmakers HEAR me
and will act to help the millions of other people like me who just want
a job.
Thank you for listening to my story.

The Chairman. Thank you very much.
[Applause.]
Thank you, Ms. Stebbins.
Now we turn to Mr. Meyer. Again, your statement will be
made a part of the record in its entirety. Please proceed.

STATEMENT OF JOHN MEYER, OWNER, OFFICE PRODUCTS CENTER, WINNER,
SD

Mr. Meyer. Good morning. I am John Meyer from Winner, SD. I
would like to thank the committee for allowing me to speak
today.
As a small business owner of 30 years and former president
of South Dakota Retailers Association, whether directly or
indirectly, all businesses are relying on a stable oil supply,
which is why I signed on with the coalition of businesses that
support the construction of the Keystone XL Pipeline called the
Partnership to Fuel America.
The new coalition of business leaders, companies, and
opinion leaders have come together to promote stable and secure
North American energy development. By developing North American
energy resources, the United States will create thousands of
jobs right here in America while also increasing our security
by decreasing our dependence on unstable oil producers such as
those in the Middle East.
Increasing demands on the same oil supply from China and
India will only limit supply and drive up prices. I presently
pay 2\1/2\ times per month for gasoline than I did 3 years ago.
One of the first issues that the Partnership to Fuel
America is focused on is the proposed Keystone XL Pipeline
expansion. The pipeline carries crude oil from the tar sands in
Canada and drops it off at refineries in the Midwest and Texas.
The proposed expansion to this system would increase the
capacity of the pipeline from 591,000 barrels to 1 million
barrels a day in addition to opportunities to use our own
States' oil--such as Wyoming, North Dakota, Montana, South
Dakota--who have those resources readily available. North
Dakota last week just went to 3.4 percent unemployment rate.
The U.S. Geological Service issued a report in 2008 that
the Bakken, known as the Williston Basin formation, is the
largest domestic oil discovery since Alaska Prudhoe Bay and has
the potential to eliminate all American dependence on foreign
oil. Some first estimations are somewhere around 2,041 years.
Building the Keystone expansion will pump thousands of
dollars into South Dakota's economy, while bringing hundreds,
if not thousands of workers to our State. And even though I am
not a construction worker or manufacturer, I joined the
Partnership to Fuel America because, as a business owner, I
recognize that these workers and dollars have an energizing
effect on our State and region.
It is reported that the construction of the pipeline will
bring as many as 20,000 jobs to the State in which the pipeline
goes through. By 2035, the pipeline will produce over 600,000
jobs, both directly and indirectly. This is something that all
Americans, regardless of political party, should support.
Many businesses along the construction route, including
mine, will see more customers and higher profits. Between new
jobs and new workers relocating here, living in the area and
spending money, our region and South Dakota as a whole will see
$10 million in State and local revenues. The real estate tax
alone on the pipeline is equivalent to adding another county to
the State of South Dakota.
I see value in this pipeline beyond just more customers
walking through my doors. Everyone will benefit from it, and it
will be a welcome boom to our economy. At the end of the day,
both businesses and individuals--the backbone of our entire
economy--are relying on the Keystone XL Pipeline for more than
just stable oil. They're relying on it for a stable economy and
a better life.
The construction of the first pipeline through eastern
South Dakota--sales tax dollars increased 6 to 8 percent in the
communities along the pipeline. We're estimating a 37 percent
increase in my county, Tripp County, with the real estate tax,
gross receipts tax, and sales tax.
In the near future the world will need 70 percent more
food. Presently, this is produced with fossil fuels. Time,
money, and technology have made us more efficient producers.
Right now, we need fossil fuels to remain the top producer.
Right now, we need to create jobs and put people back to work
in America. Let's import jobs to America.
I have colored maps that show the existing pipelines that
cross the Ogallala aquifer. Pipelines are the safest and most
efficient way to transport oil, far safer than transporting via
other modes of transportation such as tankers. Millions of
barrels are leaked into our oceans every year during shipping.
This will be the latest with satellite technology, with 5-
second intervals with monitoring shutoff valves and pressure in
this pipeline.
I hope Congress and the President recognize the investment
and return a partnership with TransCanada and Keystone pipeline
would bring to my State and the United States. I just want to
emphasize the fact that we have a foreign country that is
willing to spend $7 billion to build an infrastructure that we
have failed to do ourselves in the last few years. I want to
say--and the fact that when we look at the amount of oil that
is sitting in the United States--official estimates are eight
times more than Saudi Arabia, 18 times more than Iraq, 21 times
more than Kuwait, 22 times more than Iran, and 500 times more
than Yemen.
Thank you for inviting me to testify today about these
important job issues, and I look forward to answering any
questions you may have.
Thank you.
[The prepared statement of Mr. Meyer follows:]
Prepared Statement of John Meyer
Good morning, I am John Meyer from Winner, SD. I would like to
thank the committee for allowing me to speak today.
As a small business owner of 30 years and former president of the
SD Retailers Association, whether directly or indirectly, all
businesses are reliant on a stable oil supply, which is why I signed on
with a coalition of businesses that supports the construction of the
Keystone XL Pipeline, called the Partnership to Fuel America.
This new coalition of business leaders, companies, and opinion
leaders have come together to promote stable and secure North American
energy development. By developing North American energy resources the
United States will create thousands of jobs right here in America,
while also increasing our security by decreasing our dependence on
unstable oil producers such as those in the Middle East. Increasing
demands on the same oil supply from China and India will only limit
supply and drive up prices.
One of the first issues the Partnership to Fuel America is focused
on is the proposed Keystone XL pipeline expansion. The Keystone
pipeline carries crude oil from tar sands in Canada and drops it off at
refineries in the Midwest and Texas. The proposed expansion to this
system would increase the capacity of the pipeline from 591,000 a day
to more than 1 million barrels a day, in addition to opportunities for
use in our own States (Wyoming, North Dakota, Montana, and South
Dakota) with oil resources.
The U.S. Geological Service issued a report in 2008 that the Bakken
is the largest domestic oil discovery since Alaska Prudhoe Bay and has
the potential to eliminate all American dependence on foreign oil.
Building the Keystone expansion will pump thousands of dollars into
South Dakota's economy, while bringing hundreds, if not thousands of
workers to our State. And even though I am not a construction worker or
manufacturer, I joined the Partnership to Fuel America because, as a
business, owner, I recognize that these workers and dollars will have
an energizing effect on our State and region.
It is reported that the construction of the pipeline will bring as
many as 20,000 jobs to the States in which the pipeline goes through.
By 2035, the pipeline could produce over 600,000 jobs, both directly
and indirectly. This is something that all Americans, regardless of
political party should support. Many businesses along the construction
route, including mine, will see more customers and higher profits.
Between new jobs and new workers relocating here, living in the area
and spending money, our region--South Dakota as a whole--will see over
$10 million in State and local revenues.
The real estate tax on the pipeline will be equivalent to adding
another county to South Dakota.
I see value in this pipeline beyond just more customers walking
through my doors. Everyone will benefit, and it will be a welcome boom
to our economy. At the end of the day, both businesses and
individuals--the backbone of our entire economy--are relying on the
Keystone XL pipeline for more than just stable oil. They're relying on
it for a stable economy and a better life.
The construction of the first pipeline through Eastern SD increased
sales tax dollars 6-8 percent in the communities along the pipeline.
We're estimating a 37 percent increase in our county (Tripp) with the
real estate tax, gross receipt tax, and sales tax.
In the near future the world will need approximately 70 percent
more food. Presently this is produced with fossil fuels. Time, money,
and technology have made us more efficient producers. Right now we need
fossil fuels to remain the top producer, right now we need to create
jobs and put people back to work in America.
I have colored maps that show the existing pipelines that cross the
Ogallala aquifer. Pipelines are the safest and most efficient way to
transport oil, far safer than transporting via other modes of
transportation such as tankers. Millions of barrels are leaked into our
oceans every year during shipping.
I hope Congress and the President recognize the investment and
return a partnership with TransCanada-Keystone pipeline would bring to
my State and the United States.
Thank you for inviting me to testify about this important jobs
issue and I look forward to any questions you may have.

The Chairman. Thank you very much, Mr. Meyer.
We'll start a round of 5-minute questions. A vote has just
been called on the Senate floor. I'm told that Senator Franken
is voting and will come over so that we, hopefully, don't have
a break. But if other Senators want to go and then come back,
that'll be fine.
Ms. Owens, you made it clear that too many job seekers are
being judged not by their talent, ability, and qualifications,
but on arbitrary criteria often out of their control, such as
whether they're currently employed. Now, I have kind of two
questions. One, is that just anecdotal, or do we really have
enough evidence to show that this is, indeed, widespread?
It's just my feeling that if qualified workers are turned
away, even though they have qualities and skills, but for some
other reason, it just seems to me that's just un-American, un-
American to its core. So, again, I just would ask you is that
really anecdotal, is it just one or two instances of this or a
few someplace, or is it more widespread?
Ms. Owens. It's a more widespread practice, Senator. It's
impossible to document how widespread it is. But in a random
sampling we undertook over a 4-week period, looking a couple of
times a week at ad placements on four online sites, we found
over 150 instances of such restrictions. And as I noted in my
testimony, we have--there are examples of HR consultants,
recruiters, and employment agency reps who have spoken on the
record about this practice and about the fact that it is a
growing practice.
So as is true with almost all forms of unfair
discriminatory treatment, it's very hard to document its exact
incidents. But there are more than one or two examples. There
are plenty of people who have spoken to this. Reverend Moss
said that they hear this in their church. I'm sure Ms. Stebbins
has experienced it herself. There's the empirical evidence.
There's the statement of the industry reps, if you would,
themselves, and I think that that provides a fairly compelling
case that this is a practice that has become fairly widespread.
The Chairman. Reverend Moss, you said something that I
think more people need to understand, and that is a lot of
people who are unemployed who are on the lower end of the
economic spectrum--in order to have a job, they need public
transportation.
Reverend Moss. Yes, sir.
The Chairman. That public transportation in many cases is
woefully inadequate. I can't tell you how many times we've
heard testimony here over the last few years. Someone gets a
job. They may have an old, broken down clunker. It doesn't make
it 1 day. They can't get to work. They're out of a job.
Reverend Moss. Exactly, sir. There are many instances where
individuals have had exactly that to happen. Their car repairs
were neglected because they needed to buy medication or food.
So the service light--they are 3,000 miles past service, and we
won't even talk about an oil change, and this is not a luxury
car. This is just basic transportation. And then public
transportation being affordable for individuals who have been
out of work in order to get to the interview or make the job,
and there are employers who are looking for reasons now to let
go of employees. And if you are late or you miss your job,
regardless of what the situation is, then you're out.
So what the faith community--what we've tried to do is
support--the transit system in Atlanta is MARTA--try and
support the unemployed by giving them MARTA cards, helping them
with the transportation. But we can only do so much. And,
again, the partnership is what's most important.
The Chairman. The data that we've seen indicates that young
African-American men have some of the highest rates of
unemployment in America. The figures I've seen approach 40
percent, almost one out of every two. What's been your
experience with young African-American men in your congregation
or in Atlanta that you serve down there?
It seems to me that when young people have been told about
the American dream and are told that if they work hard, play by
the rules, they can own a home and have a good life, and yet
here's young people--one out of two can't find a job. What
happens to their dreams? What happens to their future? What are
you experiencing in that regard?
Reverend Moss. We recently hosted the Secretary of the
Department of Labor, Hilda Solis. And we had an opportunity
through Valerie Jones and the Cascade Career Network to hear
testimonies of young African-American men who graduated from
Morehouse or other colleges in the area--very well-educated,
articulate, and attired appropriately. I'll say it that way--to
get into the workforce.
But they are being told that without experience, ``we
cannot use you right now,'' not even for internships or
opportunities that will position them to be hired. And so they
become disillusioned, disheartened, and they continue to hear
the negative--I'll say negative press given to young African-
American males, and they have responsibilities as well. So then
we have to continue to encourage them, provide opportunities
for--when I graduated from Hampton in 1995, the recruiting
office set up the interviews. I had five job offers coming out
of Hampton. But that was 1985, and that was because we had an
aggressive recruiting office, and things were a little
different then.
What I contend, sir, is that with the faith-based community
and the Government and agencies such as Dover Staffing
providing the training, the retooling, and then targeting those
industries or companies that have opportunity, we can decrease
the level of disappointment and the level of anger in young--
not just young African-American men. I'm going to say the
American public.
The Chairman. Thank you very much.
We've only got about 5 minutes left, so I'm going to go
vote.
Have you voted, Senator Merkley?
Senator Merkley. No, Mr. Chair. I was planning to vote
after I had a chance to ask some questions.
The Chairman. We only have about 5 minutes left. I'd be
glad to recognize you now, but I want to turn it over to
Senator Franken.
Have you voted, Senator Franken?
Senator Franken. I have, so I can----
The Chairman. Good. Can I turn over the chair to you to
continue the hearing?
Senator Franken. I'd be honored.
The Chairman. I mean, not for all time. I mean, just for--
--
Senator Franken. Well, in that case, no.
[Laughter.]
The Chairman. We'll be right back.
Senator Merkley.

Statement of Senator Merkley

Senator Merkley. Thank you very much, Mr. Ex-Chair.
Ms. Stebbins, I thank you for your story, and one piece of
it was your 2008 mortgage refinancing. And you mentioned in
your written testimony--and maybe you said this--that the loan
didn't work out so well, in part due to your mortgage broker.
Was this a teaser rate loan that had an increasing interest
rate or had some other feature that was a substantial
challenge?
Ms. Stebbins. No, it wasn't. I didn't really need to take
out as much money as I took out. It was a 30-year loan. I knew
not to get a 30-year loan. But he just kept telling me how much
better it would be if I took out more money to get this done,
this done, and this done so that my house would have more--be a
lot more valuable.
Senator Merkley. Yes.
Ms. Stebbins. The sad thing is that 2 weeks later is when
the market crashed. Their office was closed. So I think they
knew that this was going to happen, and they were just trying
to get me to just take all--as much as I could out, and that's
the impression I got when all was said and done. And instead of
my payments being more leveled out, it was almost twice as much
as what they said it was going to be when we were signing the
papers.
Senator Merkley. Thank you for sharing that, because so
many families were impacted by various predatory strategies
during that period. One was a triple option loan, where you
could do negative amortizing, but you weren't told that that
would switch over time to an accelerated rate where the
payments would double from what you were initially told.
I don't know if that was the case there, but--and others
had these 2-year teaser rates, very low, but the person wasn't
informed that after 2 years, it doubles, so that it's going
from 4 percent to 9 percent or so forth, and that you couldn't
get out of the loan, because it had a prepayment penalty that
took a pound of flesh--very devastating to millions of families
and was the complete foundation of this entire bubble and
collapse that we're facing.
And right now, I'm on my way to vote on closing debate on
the nomination of Richard Cordray for the Consumer Financial
Protection Bureau. And the reason that this ties in directly is
because the reason those predatory practices were not ended is
they were at the Federal Reserve, and the Federal Reserve put
their monetary policy in the upper floors of the building, and
they locked their responsibilities for consumer protection down
in the basement and threw away the keys. They did absolutely
nothing.
And so the response to that is we should have an agency
that watches out for financial fairness.
Ms. Stebbins. Thank you.
Senator Merkley. It goes without saying. But we may lose
this vote here in a few moments, because folks on behalf of
those who want to make money through predatory practices are
defeating those who are fighting for fairness for American
families. And so I hope to come back later in this hearing and
say we won this vote. But I encourage folks to keep pushing on
this.
And I wanted to turn, Dr. Moss--you mentioned the poor
people's campaign. And could you--I mean, I feel like there are
real common elements between that and the current frustration
in America over fairness for working families. Certainly, the
Occupy movement that's trying to draw attention to the fact
that we're--as a nation, our GDP has grown over the last 20
years, but the benefits or the sharing and growing that economy
to working people has been flat and then is declining. And I
don't know if you'd like to draw any parallels or elaborate a
bit on what was moving Dr. King in that moment and the major
elements of that campaign.
Reverend Moss. One of the things that I do know, sir, is
that Dr. King was looking at equality for people. And,
oftentimes, we can say poor people and we can directly draw
attention to economic status. But I would suggest that in these
days and times that we also look at the poor in heart and the
poor in spirit, because America that I know--I'm an Army brat.
My dad served 27 years in the U.S. Army--two tours in
Vietnam. And I asked him, ``Dad, why did you do that? '' He had
a sixth grade education, obtained his GED in the Army. And he
looked me square in my face--this was my last year at Hampton.
He had been diagnosed with lung cancer and they said he had 6
months to live. And he said,

``Son, I did it so that you and your mother and your
brothers would have a house to live in, a yard to play
in, and could go to school anywhere in this country
that you wanted to go.''

When I think about the poor people, I think about those who
have become disillusioned and disheartened, thinking that no
one is concerned about their plight, thinking that no one wants
to be involved with those who are less fortunate, and that we
can sit and talk all day while millions of people continue to
lose their homes, children are called home from college,
families are torn apart, marriages dissolved, because they are
poor in spirit and poor in heart.
And what we have an opportunity to do is to reinvigorate,
to re-energize, redirect, and to redeploy those persons in
America who believe in hope and believe in a brighter tomorrow,
even though we are in the midst of a struggle, knowing that
there is a better way and a brighter day.
Senator Merkley. Thank you.
[Applause.]
Senator Franken [presiding]. Has the Ranking Member been
able to ask questions?
Senator Enzi. I haven't yet. Have you asked questions yet?
Senator Franken. No. But I would yield to you. I am the
chairman now.
Senator Enzi. Yes.
Senator Franken. I know----
Senator Enzi. I realize that, so I will yield to you.
Senator Franken. No, no, no. I'm in charge here, and I
would----
[Laughter.]
Senator Franken [continuing]. And I would recognize the
Ranking Member.
Senator Enzi. I know from past experience it's not quite
the feeling of power that a person would expect.
Senator Franken. Well, it's a meteoric rise but well-
deserved, so----
Senator Enzi. Yes, very well deserved, and----
Senator Franken. Yes. Thank you for saying so.
Senator Enzi. Yes. I appreciate your efforts at doing some
bipartisan things that we're going to enjoy next Monday night
too. So thank you for that.
Let's see. I'll start with my neighbor, Mr. Meyer.
Have you ever hired any individuals who were older?
Mr. Meyer. Yes, I have. Over half of my staff are older
people. I find them very dependable and very reliable.
Senator Enzi. Have you ever hired any individuals that were
unemployed?
Mr. Meyer. Yes, I have. And, to me, that's an advantage
because they're readily available.
Senator Enzi. Thank you. In your testimony this morning, of
course, you concentrated on the pipeline which would make a
difference in thousands of jobs for construction and then some
local tax revenue. So besides millions of barrels of oil,
there'd be thousands of jobs. What kind of jobs do you think
will be created in South Dakota because of the pipeline?
Mr. Meyer. Right now, of course, you know, it's hard to
believe if--where I come from, it's 40 or 50 miles to an
interstate. We have no manufacturing. And we've had this
Economic Development Committee, which I serve on, and time
after time we're turned down because we don't have the power.
The handshake with this is phenomenal. We're going to have
two pump stations that consume more electricity than most of
the southern part of our State to pump this oil. The gross
receipts tax off of those alone is going to bring $1.2 million
to our Winner School District, to have almost a million--half a
million to our county, and et cetera.
But with those new power lines, then we are also sited for
700 wind turbines. So when you look at our vo-tech schools
right now, every one of them are full for tower operators and
people that can work. It's just a lot of positive things that
will handshake and spin off from this.
We have trucks that are going to bring pipe in. They figure
right at a semi-load of tires a month, just to haul the
pipeline into these States. I mean, it's not just in South
Dakota. There's going to be--everywhere across the United
States is going to feel the ripple of this, from what I can
see.
Senator Enzi. So this would be a shovel-ready project, I
assume. I know that we have some stimulus money that's still
not being spent because the projects really weren't that ready.
How soon would this go into effect if the pipeline were
approved?
Mr. Meyer. This has been under study for 2 if not 3 years.
I've been involved for a couple of years. But, I mean, these
people are ready to go. The sites are ready. The towers are
there. Some of the easements--TransCanada has purchased some
land themselves. I would say after the first of the year, if
this thing was given a green light. And I guess the thing I
want to emphasize is that you have a foreign country, or Canada
as our neighbor, spending $7 billion in our country to move the
oil from the States, that we desperately need in this country,
and we're not willing to do it ourselves.
Senator Enzi. I like the number--the 20,000 jobs that
multiples into 500,000 jobs. Now, you've been a small business
owner for over 30 years?
Mr. Meyer. Yes, I have.
Senator Enzi. Do you think it's more difficult today to own
and operate a small business than it was when you first started
out? Do government regulations make it any more difficult for
you to operate and to hire people?
Mr. Meyer. You know, an employee of mine the other day--
he's been with me 22 years, and he says to me--the other
morning, he said, ``You know, it's not fun anymore.'' And I
said, ``What's not fun? '' He said, ``It's so difficult to do
business.''
I look at my gas cost of another couple of thousand dollars
a month. I look at my double digit sometimes health insurance.
I would like to employ another person or two. I have 10 full-
time and two part-time. And I'd like to employ more people, but
when I look at those overhead costs, I'm not going to.
Senator Enzi. Thank you. Since I'm limited on time, I'll
turn to Christine Owens.
The legislation that you've endorsed would expose employers
to litigation if someone alleges that they considered whether
someone applying for a job was unemployed. How would an
employer be able to prove that he or she considered or did not
consider employment status?
Ms. Owens. Well, Senator Enzi, in the first place, I think
that it is an exaggeration to suggest there would be a lot of
litigation. What most of these folks want is jobs. They don't
want to file lawsuits. I think it actually may be difficult to
find lawyers who would bring these lawsuits.
But in the event that a complaint was filed, a lawsuit was
filed, the burden is on the individual who's challenging the
employment practice to make a showing, to provide evidence that
unemployment status, in fact, was a consideration. And if an
individual can't make that kind of showing, then under the way
these cases proceed in other areas of the law, the case would
not persist.
Senator Enzi. Even if the case doesn't persist, doesn't the
small businessman have to hire an attorney to represent him, to
take care of the case?
Ms. Owens. I don't believe that's the case. I think--I
mean, like my colleague on the panel, I've also hired
unemployed workers. Every job opening we have, we receive many,
many applications. We don't consider one's employment status.
We consider whether people are qualified for jobs or not. And
if they are qualified and we interview them, and if there's a
gap in their resume, we may inquire about that to give someone
an opportunity--in an individual setting. We've never done
group interviews--but in an individual setting.
And we certainly understand that at a time like this, it's
very hard for people to get jobs. I don't think a small
business owner--I run a small business--actually is burdened by
a process that takes into account whether someone's qualified
and allows an individual to explain unemployment if the
employer thinks that's relevant.
Senator Enzi. You bring up an interesting point, though,
and that's asking about gaps in a resume. If the reason was
unemployment, even if that made no difference to the employer,
but that person were not hired, would that not be a possibility
of a lawsuit?
Ms. Owens. It could open a door, but I would say that that
kind of situation occurs in many kinds of environments, whether
an African-American is interviewed and doesn't get a job, or a
woman or a veteran or an older worker. I think it's a stretch
to think that just because an unemployed candidate--frankly,
many of them would be grateful for the opportunity to get an
interview and would not assume that the reason they weren't
hired was their unemployment. I really think it's a stretch to
assume they would translate that into a lawsuit.
Senator Enzi. I appreciate having this hearing today. I'm
concerned about anybody putting down that they don't want to
interview anybody that's unemployed. I think that's a bad
business move.
Ms. Owens. I agree.
Senator Enzi. As Mr. Meyer said, those people can go to
work right away, and if they have the skills, they're a
valuable resource. I'm sure that the time is going to come
again when we're going to be encouraging older Americans to
work longer than they ever have before so that we can keep the
economy going. They're going to be needed.
I think just the conversation that we're having is going to
stop a lot of the mistakes by employers. I appreciate all of
you testifying. I'm sorry that I don't have more time for
questions. I've exceeded my time already, and the chairman has
been very generous.
Thank you.

Statement of Senator Franken

Senator Franken. Since it's you and me, I'm going to ask
some questions, and if you have some further questions,
certainly you should feel free to ask them. I don't know if you
have something you have to do next.
I'm going to start with associating myself with some of the
Ranking Member's remarks in his opening statement about the
Workforce Investment Act--I think it's high time that we
reauthorize it. I'm a big supporter of the workforce system.
Recently, in Minnesota, nearly half of Minnesota
manufacturers responding to a survey said they haven't filled
positions because they lack qualified job candidates. We need
to reauthorize the Workforce Investment Act. I realize it isn't
a silver bullet, but I think it plays an important role in
making sure that members of the workforce can get the training
they need to take advantage of skilled employment
opportunities.
I agree with pretty much everyone here, including Mr.
Meyer, that we simply need more jobs. But short of that, Ms.
Owens, what are other things that Congress could be doing to
help create jobs, to help get people employed, really?
Ms. Owens. I think the first answer is first do no harm. So
it is critical that Congress renew the Federal unemployment
insurance benefits programs that are slated to expire at the
end of this year. Aside from the vital life line of support
that those benefits provide to millions of families, the
estimates are that if Congress fails to renew this program, we
could lose upwards of 500,000 jobs next year as a result.
Beyond that, I think Congress should invest in job
creation, particularly in infrastructure projects that are
shovel ready, that could put people back to work, renovating
schools, making buildings--public buildings more energy
efficient, and the like. And, finally, I would add that our
States are still struggling, and much of the private sector job
growth that we are finally seeing is being offset by public
sector job losses.
That's a huge crisis. It could have a significant spillover
effect in the private sector. And so to the extent that
Congress can provide relief to the States, I think doing so
would, in fact, help with respect to creating and saving jobs
and putting more people back to work.
Senator Franken. I actually have to agree with all of that.
Speaking of unemployment insurance, Reverend Moss, the problem
as I see it isn't lack of motivation. And we have certainly
seen that with Ms. Stebbins.
When I travel around Minnesota, I meet people who have been
unemployed for months and even a couple of years. And these are
folks who previously have been working, really, since they've
been 14, when they got their first paper route. And, indeed,
their almost entire identity has been ``I'm a working person. I
work.'' And they're very proud of that, and this is
psychologically devastating in many instances.
I really hope they never have to hear the claims that I
believe are ignorant that come from politicians that
unemployment insurance incentivizes people not to work. I find
that, frankly, offensive. And I know that people I talk to hate
taking their unemployment benefits, they'd rather be working.
But they've come to me and said, ``If it weren't for the
unemployment benefits, I'd be out of a home.''
There was just a piece on 60 Minutes on homeless kids who
live out of cars. Every one of them had become homeless the
moment their unemployment insurance ran out--essentially, their
parents' unemployment insurance ran out. And the folks you've
been working with--in your view, during a period of
unemployment, do they see that as a time to just relax and
watch TV and eat junk food? And collect that $300?
Reverend Moss. No, sir. Senator Franken, one of the things
that Valerie Jones, chair of our Cascade Career Network, said
to me was that when this team--this group came together, one of
the things that they said is, ``We do not want to form a
support group where we sit around and bemoan our challenges. We
want to encourage and empower one another to get back in the
fight,'' the fight being staying psychologically healthy,
emotionally prepared, and spiritually empowered to look for
jobs, even after you have applied over 200 times and you're
told no, yet you know that jobs exist.
What I do know, sir, is that any time an EMT shows up to an
accident scene, they triage the wounds until they can get to
the hospital. Unemployment insurance, other opportunities
provided by the Government to sustain those who have lost
employment is simply triaging until we can find a healthy
solution.
We know we need more jobs. What do we do to continue to
incentivize the small and medium businesses that can provide
those jobs? What do we do to slow the corporate sector--the
layoffs in that area so that we can begin to gain some type of
footing?
I serve as a chaplain in the Navy, and we're on an aircraft
carrier, sir, and it takes a minute to turn that ship around.
Once the captain gives the order and the XO confirms, it goes
to engineering. It's plugged into the computer. The computer
engages. Then that ship begins to turn. What I am suggesting is
that if we stay deliberate in our efforts, focused on the
American people, focused on what they are dealing with, we can
turn this thing around.
This is a time of great opportunity. I am not just being
rhetorical in my remarks, but I am being very sincere in the
fact that the Government, partnered with a people who want to
and who can--we can turn this thing around.
[Applause.]
Senator Franken. Thank you. I can't reiterate enough my
association with the Ranking Member's remarks on the Workforce
Investment Act that he made in the opening. And I hope that we
get to that.
As the interim chairman, I want to set a good example. I'm
over my time, however, I see the chairman is back, so I would
like to actually go well over my time.
[Laughter.]
No. I thank the chairman for allowing me to take over for a
small measure of time.
The Chairman [presiding]. Thank you.
Senator Franken. Thank you.
The Chairman. Thank you very much, Senator Franken.
I recognize Senator Blumenthal. Before I do, I'll just
mention the Workforce Investment Act. We have been working for
about 18 months on this. Senator Enzi and Senator Murray have
been leading up this effort. I think we've made great progress,
but I'm willing to move the bill. I'm willing to have a meeting
of this committee to debate it, to amend it, and vote it out.
I'll do it next week. I'll do it next week, or I'll do it the
week after.
[Applause.]
Do you want to have it next week?
Senator Enzi. It would have to be next week, because the
next week is Christmas week.
The Chairman. All right. Not next week--January. We've got
a lot of things on our plate here for the next week. But it is
my intention to bring up the Workforce Investment Act. We've
been trying to get an agreement. There's an issue hanging out
there that I think we're just going to have to debate and vote
on in committee and see where the votes lie.
I thought we could work it out. It hasn't been able to be
worked out. So it would be my intention that when we come back
in January that one of the first things that this committee
will do will be to meet to vote on and report out the Workforce
Investment Act. And we'll just see where the votes lie on that
one little issue that seems to be thwarting us.
Senator Blumenthal.

Statement of Senator Blumenthal

Senator Blumenthal. Thank you, Mr. Chairman. I want to join
in associating myself with your comments on that measure, just
as Senator Franken has, and thank you for your leadership on
it. Whenever you call a meeting, I'll be there.
I would like to begin by asking Ms. Owens a couple of
questions, particularly focused on discrimination against
unemployed people. I know you've done a lot of work on this
issue, and there's a lot of persuasive factual material in your
testimony. As you know, I've proposed a measure that would
prohibit discrimination against unemployed people simply
because they are unemployed. But the measure of the extent of
the problem is not simply the number of ads, is it?
Ms. Owens. No, absolutely not. And that wouldn't be the
case for any form of bias or discrimination. I think that as--
in my testimony, I quote a number of HR consultants and the
like who have gone on the record talking about the extent of
the practice.
At our organization, we, among other things, maintain a Web
site that has around 90,000 subscribers, most of whom are
unemployed. And a number of those individuals have told us
their accounts of being--actually sometimes even being
recruited for jobs because their resume indicates that they
meet all the qualifications, and then when the recruiter finds
out they're unemployed, they have been told that their
application will not be forwarded to the employer.
So as is the case for all kinds of employment bias
situations, what we have is some measure of the sampling of ads
that include exclusionary language; statements by industry
representatives, if you would; and individual anecdotal
accounts from unemployed workers themselves, all of which point
to the existence of a problem which the industry reps indicate
is greater now than it has ever been before.
Senator Blumenthal. When you say greater than it's ever
been before, would you say it's a problem of sufficiently
substantial magnitude that it deserves addressing by the
Congress?
Ms. Owens. Absolutely, Senator Blumenthal. You know, it
would be wonderful if employers and employment agencies would
of their own accord do what I'm sure Senator Enzi did and what
Mr. Meyer did and what my organization does, which is to
consider qualified candidates regardless of their unemployment
status or their employment status.
But the fact is in this environment where there are so many
candidates for every job opening, many employers find it easier
to screen candidates based on things like are you employed or
not, as well as your credit rating. And, obviously, these are
practices that hurt the unemployed. If we can't get the
business community voluntarily to discontinue these practices,
then Congress has a role to intervene just as it intervened to
make sure people get paid the minimum wage and get overtime pay
and have safe and healthy work places.
Senator Blumenthal. Thank you.
[Applause.]
And, Mr. Meyer, you wouldn't discriminate against somebody
simply because they're unemployed, would you, in your hiring?
Mr. Meyer. No, I haven't, Senator.
Senator Blumenthal. You haven't and you wouldn't.
Mr. Meyer. No, I wouldn't.
Senator Blumenthal. And you would support efforts to combat
that practice because it is really discriminatory and
invidious, isn't it?
Mr. Meyer. It is. It is. And I think--over the years, if I
may add, we used to have a thing in this country called OJT, on
job training. And when I hired somebody--as you mentioned, the
paper boy doesn't always remain a paper boy.
And I've had mechanics come in to me, and I said, ``I will
train you,'' and sent them to school on my dime, and they're
some of the best technicians you ever found out there. So it
can be done. But at one time, no matter what I paid them, they
compensated me part of their wage for so many months to do so--
or a tax incentive break to the individual to do that, to put
these people back to work.
Senator Blumenthal. Thank you.
My time has expired on this round, Mr. Chairman, and I'd be
happy to take another round.
The Chairman. Thank you very much. We'll start another
round of 5-minute questions here.
Ms. Stebbins, I didn't get a chance to interact with you.
You had a very profound statement, and you are personally
affected by this.
Ms. Stebbins. Yes, sir.
The Chairman. I wanted to ask you about your job search.
You've applied for a lot of jobs, which you seem to be
overqualified for. Talk to me about what kind of reaction you
get when you talk to employers about certain jobs--like minimum
wage jobs, other low-skill jobs for which you've applied but
for which you are obviously very overqualified, but you've
still applied for those.
Ms. Stebbins. Yes, sir. That's pretty much what I've found
is out there. I will go to an interview, and if they do speak
to me, they'll ask me things like,

``Well, you know, you're older and you've probably made
more money with your experience here. You've done a lot of
different types of things. Why would you work for minimum wage?
''

And my answer is ``That's what you're offering, you know.
That's what's out there right now. I have bills to pay.''
We're trying to get me a job to at least be able to afford
to pay insurance on my husband's job that he has so we can at
least get insurance so we can take care of our health. But
that's been asked many, many times. ``Why would you, with your
experience, want to work for minimum wage? '' And I'm telling
them it's not that I want to. It's that I need to at this
point, and that's what's out there.
The Chairman. But they don't offer you the job.
Ms. Stebbins. No.
The Chairman. Has your age ever been an issue in any of
your interviews or conversations?
Ms. Stebbins. I went to a job at a clothing store, and when
I got there, there was probably 100 people there. And they
invited us in, 10, 20 at a time. Well, these are 20- and 30-
year-old people. And they went around the room, and she got to
me, and she said, ``Why would someone your age want to work in
a store that sells young women's clothes? ''
The Chairman. You mentioned that.
Ms. Stebbins. And I said,

``Well, I'm young at heart, you know. I may look old,
but there's still a young person in there. And I have
two daughters in their 20s, so I know what's happening,
you know.''

But they just didn't see it that way, I guess.
The Chairman. What happens when you tell them you've been
unemployed since April 2010? That's a year and three-quarters
now.
Ms. Stebbins. Right. It started out I was unemployed for 3
months, and then 6 months, and then 9 months. And it's always,
you know, the same--``Are you looking for work? '' I'm here,
you know, things like that. Some of the questions people ask
you--you just wonder, ``What are you thinking? Why would you
ask me the question, have I been looking for a job, when I'm
here? ''
So they actually make me feel like I'm sitting home being
lazy, like you said--we sit around and eat sandwiches, watch
TV, drink a glass of wine. That's what one of our Senators back
home said. I haven't had a glass of wine in a long time,
personally. But I'm out there looking for jobs.
I would like to take someone that thinks we're lazy or that
we're not looking for jobs--the reason we're not employed--you
go to the unemployment office, and you can see every computer
there full of people and a line waiting to get that computer to
look for those jobs. You go to--I go to Goodwill--they have
career centers in all the Goodwills. You go there. Every
computer is full. There's a waiting line to check those
computers for jobs.
It's not because we're not looking for jobs. It's because
they're not there. So, I don't have a job because I can't get a
job, and it's insulting when they treat--when someone asks me
in a manner that makes me feel like--``Oh, you've been sitting
home watching All My Children.'' That's not what I'm doing.
I'm hitting the unemployment offices. I'm hitting Goodwill.
I am begging, borrowing. I want a job, and it's not because I'm
not looking for one that I don't have one. It's not because I
don't want one, that I'm not having one. It's because I'm not
being hired for whatever reason, whether it's my age or things
like that.
The Chairman. President Obama in Kansas the other day, I
think, said something that we all have to really start thinking
about. He said that a factory that employed 1,000 people at one
time to do a job now employs 100 people because of automation.
What happens to those 900 people? They need to be retrained. We
need new jobs. I don't think we're thinking about this in a
systemic way and in an overall way.
Now, Mr. Meyer is here talking about the Keystone Pipeline.
I don't have a view on that one way or the other. I'm still
trying to figure it out. But, obviously, that might provide
some jobs there, but I don't know that you'd benefit from that
any.
Ms. Stebbins. Can I add something?
The Chairman. Yes.
Ms. Stebbins. I did get unemployment for a year. And when I
was doing that, this is when I started going to the job center,
the unemployment job center. In the very beginning, they had
programs for women 50 and older. Once I got everything settled
down and figured that I wasn't going to be hired back into my
field, I thought, ``OK. I'll go to that job center, I'll do
some classes, whatever needs to be done, to get this''--because
I'm over 50. I qualify.''
I went back, and all the funding for that program had been
dropped. There's no training for 50-year-old people anymore.
You know, we've done our things. Now, we may need to learn
something different.
The Chairman. I appreciate that. I think my point is that I
don't care how much you retrain people and train them for new
jobs, if there's only one job for every four to eight people,
all you're doing is setting up a competition in a dog-eat-dog
world.
Ms. Stebbins. That's right.
The Chairman. Somehow we've got to think about creating
more jobs.
Ms. Stebbins. More jobs, absolutely.
The Chairman. Not just retraining people for jobs that
don't exist.
Ms. Stebbins. Exactly, yes.
[Applause.]
The Chairman . This is one of the fundamental issues that
we have to start thinking about, fundamental in the same way
that a century ago--more than a century ago, in the late 1800s,
there was a movement started in America for a shorter work
week. It wasn't a 40-hour work week. It was a 32-hour work
week.
When the Great Depression came, and in 1938 when the Fair
Labor Standards Act was passed, a compromise was reached at 40
hours a week, with time and a half for overtime. And when that
passed, more people started being hired, because it was better
to hire someone new than start paying time and a half overtime.
Ms. Stebbins. Right.
The Chairman. So I'm just wondering if we shouldn't start
thinking about these issues again and how we can spread out
work a little bit more. But, again, these are some kinds of
fundamental issues that we are not addressing in this country.
I'll just repeat, for emphasis sake, I'm all for WIA and job
training and putting more things out there to tell people to
retrain for new jobs. But if there's only one job for every
four to eight people, you're setting up a situation to
disappoint a lot of people.
Ms. Stebbins. Absolutely.
The Chairman. And we have to think about creating new jobs
somehow.
I'm sorry. I went way over my time.
Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman. I appreciate your
comment on moving ahead on WIA. I think that some retraining
will make a difference. We've located a lot of jobs out there
that American's don't have the skills for. The option is either
training people for those skills or sending those jobs
somewhere else, and we don't want them sent somewhere else. We
want them to be available here.
I didn't get a chance to ask Dr. Moss any questions. I want
to first commend you for your work with the unemployed in your
community and particularly the work that your Cascade Career
Network does. I know that's similar to the Department of
Labor's one-stop career centers.
Do you think your ministry can provide better and more
comprehensive services for less than what the Government spends
at the one-stop centers? Should we consider investing more in
the private non-profit organizations like yours with proven
records of providing valuable service?
Reverend Moss. Senator Enzi, it's important to, again,
focus on the partnership, because these ministries are staffed
by volunteers, individuals who have gone through or are going
through the same thing of the persons they're trying to help.
And Valerie has shared with me that the challenges that exist--
one of the challenges is the capacity to provide adequate care,
direction, and encouragement for individuals because of the
number of individuals who come to us.
She received a message just this morning of a young man who
just--``I was just laid off.'' And he has reached out to us,
first for the spiritual, and then to deal with the emotional.
And so I would contend, sir, that it has to be a both/and
versus either/or, and that is the type of environment that I
try to create in the church, getting individuals to reach
consensus and to see the both/and versus either/or, because
when you set up the either/or, you set up us against them. And
what happens now is in cases like this, we need to put
everything on the table to make sure that we are meeting the
needs of the American people.
Senator Enzi. I appreciate that. I mentioned that this WIA
bill has made it through the committee in the Senate twice and
through the Senate twice. What has held it up before has been
concern that some of the money might be diverted to faith-based
initiatives. There's no provision in this particular law to do
that, and if that was going to keep it from happening, I was
willing to keep that out of the bill. But the House did not
consider it.
You mentioned another real important aspect when you were
talking about your testimony, and that's the need for daycare.
People have to--if they have children, and they're the
responsible one for the children, they have to have some kind
of daycare to even be able to apply for a job. Then, of course,
if they get the job, they've got to have some daycare.
I know in a lot of the boom communities--I was the mayor of
a boom town for 8 years that tripled in size. That's one of the
problems that we found, was that somehow you've got to arrange
for daycare, because it's usually young people that are coming
to these boom towns, and they're not bringing their support
with them. The grandparents aren't coming.
One solution we found was to ask the churches to start
daycares. Do you have that in your church?
Reverend Moss. Not at the present, sir. We are looking at
going in that direction. But what we do--we pull together those
churches that do provide daycare to make sure that we have a
resource bank so that when individuals come to us, we can point
them in the direction where they can get help versus sending
them on a wild goose chase.
Senator Enzi. Thank you. Because that is critical, and we
found out in our church that most of the building is going to
waste most of the days of the week.
Reverend. Moss. Yes, sir.
Senator Enzi. It provided a good resource. But thank you
for what you're doing with that. It is very important.
I need to go back to Ms. Owens, because this credit rating
thing has come up, and I've been checking with some of the
businesses to see what kind of background checks they get when
they go with a credit bureau. I'm told that they cannot get
credit rating scores, and the largest credit reporting
agencies, the ones who provide the reports, are all on record
saying they don't include credit rating scores in their
reports.
So is that incorrect? Is there evidence that the employers
are actually using credit rating scores?
Ms. Owens. I would refer, again, to my testimony. And I
don't know, Senator Enzi, about whether what they get is scores
or some other kind of information. But the Society for Human
Resource Management reported at the end of 2010 on its survey
of employers and their use of credit background checks as part
of the employment screening process and found that 60 percent
of employers said that they were doing credit background
checks. And that was an increase from 25 percent in 1998, so
there certainly is, at least in terms of SHRM, which is a very
well-recognized human resource organization nationally--there
is evidence--significant evidence that employers have access to
some credit rating information which they use.
And, again, there are anecdotal examples. There have been
press accounts over the last year or so featuring individuals
who have even gotten job offers that were later rescinded
because a credit check turned up negative information. And,
again, I think the critical point here is that in an economy
like ours, where unemployed workers suffer a real decline in
income, when their only income is unemployment benefits and
then when those benefits are lost, many actually fall into
poverty. There's a high incidence of people having to miss
mortgage payments, having to miss credit card payments, taking
on substantial credit card debt, which is an absolute killer
for people, and necessarily developing bad credit scores as a
result of that.
Senator Enzi. Thank you, and I thank you for the reference
to SHRM as well. I went through that process of becoming a
professional in human resources, where they provide the
certification on it. They are a real good resource, thank you.
I've gone over my time again. Thank you.
Senator Blumenthal [presiding]. Thank you, Senator Enzi.
I've been asked to chair the hearing for the remainder of the
session. I'm going to turn now to Senator Franken.
Senator Franken. What happened to me?
[Laughter.]
Senator Blumenthal. You didn't really do that good a job
the first time around.
Senator Franken. OK. Well, I feel a little slighted. But
again, I would like to cite the Ranking Member's questioning
here and talk about boom towns and ask Reverend Moss a
question, and you referred to it in your testimony. With all
the online job sites, people can search for jobs all over the
country. Now, if someone in Atlanta sees a job opportunity in,
let's say, South Dakota, and they have a house in Atlanta that
is a little bit under water, would they be able to just pick up
and move to South Dakota?
Reverend Moss. Senator Franken, thank you for an easy
question. The answer is no, sir. I've heard of individuals who
have tried to engage in short sales, and for whatever reason,
the negotiator with the mortgage companies has taken them
through--have given them a rough ride trying to get the short
sale. Realtors have had three and four buyers for this
property, but for whatever reason, the mortgage company refuses
or comes up with one more thing that is necessary to close the
deal.
And so it is virtually impossible at this time to relocate
unless you have the support of the extended family, in which
most cases, you don't. If you have a young family with two
kids, that is not going to work, to be able to pick up and
move, unless, unless the prospective employer is incentivized
to support that move. That's the only way it can happen.
Senator Franken. But you have a house where you really
can't pay off the mortgage, and the value of the house is such
that people are stuck, and they're stuck all over the country.
Reverend Moss. Yes, sir.
Senator Franken. I don't know if anyone on the panel is an
expert on child care, but I think that was a very good point,
again, that the Ranking Member brought up. And by the way, I
had the new chairman tell me I had done a bad job, and then you
tell me that I had asked you a very easy question. So I'm just
taking it from every side here.
Does anyone else care to insult me? No, I'm just kidding.
My understanding is that we are considering cuts in child care
and community block grants for child care. What effect would
that have on people's ability to take jobs even if they could
find one?
Reverend Moss.
Reverend Moss. Sir, that would be devastating. It would be
devastating. The fabric of who we are is already stretched
beyond measure to maintain the community. And I stand in front
of thousands of people on Sunday, preaching a word of hope, of
encouragement, of faith. And then they leave, and on Sunday
evening, they open their mail, and they get more devastating
news.
They watch the news--the media is great at putting out what
we're losing and what's being taken away. And that's all that
the people hear--oh, good, now this is going; oh, good, now
that's going. And I would say, sir, that unless we begin to
focus on supporting those entities, those areas that we know
are vitally critical to sustaining basic needs, we're just
going to continue to make this wound even deeper.
And there are some areas, sir, with all due respect, that
we need to make sure that we look very carefully at so that we
can say that we care about the American people. Childcare,
education, and healthcare--those are the three--and food--basic
necessities. So to answer your question----
Senator Franken. And transportation, public transportation.
Reverend. Moss. And public transportation.
Senator Franken. In terms of getting to work----
Reverend Moss. Yes, sir.
Senator Franken [continuing]. Public transportation--I
mean, when you're specifically talking about jobs.
Reverend Moss. Yes, sir.
Senator Franken. And I think we've identified a few
things--childcare, job training, public transportation. Well,
my time is up, and I thank you all for your testimony. Thank
you.
Thank you, Mr. Chairman.
Senator Blumenthal. Thank you for your excellent questions,
Senator Franken.
Senator Franken. Sarcasm.
Senator Blumenthal. No, they were--in all seriousness, they
were excellent questions.
And I want to thank you, members of the panel, for your
excellent answers to those questions and the others that have
been asked this morning. This area is really very, very
important, obviously, to members of this committee and to the
Congress.
I want to go back to the credit rating issue--because I
think the discrimination against people who have bad credit
ratings, who have financial difficulty, is one of the less
noticed problems here--and ask you, Ms. Owens, if you could
expand a little bit on that problem insofar, again, as your
experience in dealing with unemployed people, whether that is a
common reason that people are not employed.
Ms. Owens. It's certainly something that we're hearing from
unemployed workers, that because their credit reports have
adverse information, they are considered--that there's an
equation between their credit worthiness and their
employability or their suitability for work. And it is
understandable that as people have lost their jobs and their
incomes decline that there will be adverse marks in their
credit reports because of their inability to meet obligations.
I think it's really--it's critical to point out that there
is no evidence that suggests that there is any link between
one's credit rating and credit report and their suitability for
a job. There may be some particular narrow slice of jobs for
which a credit report would be a relevant consideration for an
employer. But, in general, there is no basis for excluding
someone from a job because of an adverse credit report.
We are certainly hearing it. Again, there have been these
anecdotal news accounts. The National Consumers Law Center has
testified on the House side about the practice. And as I noted,
it is--at a time when there is an increased reliance of
employers on this form of screening in an environment in which
more and more workers looking for jobs are likely to experience
adverse credit experiences, it creates another one of these
perverse catch-22s that in order to have a solid credit rating,
one needs a job, but to get a job, one needs a solid credit
report.
Senator Blumenthal. Is there evidence that, on occasion--
and this really is a question for all the members of the
panel--that credit rating or reporting agencies may actually be
inaccurate in some of what they tell employers?
Ms. Owens. I'll answer that first, and then others can
weigh in as well. We know from research--from a study that the
FTC has undertaken that--at least in reviewing one panel of
reports, that the error rate was as high as 33 percent or 37
percent. And this is not necessarily that there's fraud that's
committed by the agencies. It's just that information is
inaccurate.
I myself get my own credit ratings every year and realize
that my credit--my report shows that I've moved 10 times in the
last 4 or 5 years. It's because my young adult daughter shares
a credit card with me. And like many young adults who have been
in college and finished college, she's moved about 10 times in
the last 4 or 5 years. So I have to get that corrected on my
own credit report.
So sometimes there are errors. Sometimes there are things
like my situation. But an employer doesn't have any way of
knowing that there's a perfectly reasonable, innocent
explanation. And so if an employer just looked at my credit
report and said, ``She moves around a lot,'' it might raise
questions.
Senator Blumenthal. Any of the other members of the panel
wish to comment on that question?
Ms. Stebbins. I just know that for the last probably 8
years that they always ask for credit checks. And I always
wondered what do they need my credit for if I can do the job.
And I do know people that have not gotten the jobs or people
that have gotten the jobs and then were asked to leave because
they may have been 3 months late on a mortgage payment at one
time or the other. That doesn't tell me what a person can do at
the job. It tells me they had a hard time at one point, and I
don't think that should be considered.
Senator Blumenthal. And, on occasion, perhaps frequently,
individuals who have found errors in their credit reports may
have a tough time getting them corrected so that the accuracy
becomes even more questionable, apart from, as you say quite
rightly, the relevance, the sheer relevance of a credit history
to suitability or ability to do a job.
I don't know whether, Senator Enzi, you have any other
questions?
I'd like to thank the panel on behalf of all of us. We're
going to keep the record open for 10 days in case any of you
have additional written submissions. But I certainly want to
thank you for the excellent and very informative testimony that
you've given us today. And we look forward to hearing more
about the great work that you are doing--each of you are doing
in the areas that are important to our country. Thank you very
much.
And this panel is adjourned.
[Additional material follows.]

ADDITIONAL MATERIAL

Prepared Statement of Senator Murray

The middle class in America is in crisis right now.
Families across America are struggling to stay in their homes,
put food on their tables, and buy clothing for their children.
Millions of workers across the country are unemployed and
are desperately fighting to find a way back into the workforce.
Many of these men and women lost their jobs through no
fault of their own. The companies they worked for closed down
or out-source their labor, or the skills they spent years
acquiring became less relevant in this quickly changing
economy.
These workers didn't cause the economic collapse, but they
are the ones bearing the brunt of it.
I have heard from so many of them across Washington State
and I know they aren't looking for a hand-out, they just want
their government to be there for them the way it was there for
generations of workers before them.
They are just looking for a hand up--some support so they
can keep food on their families' tables while looking for work,
and the resources and tools they need to skill-up, train-up,
and get back on the job.
Nobody needs this support more right now than the long-term
unemployed, who in this current economic turmoil make up 43
percent of the unemployed in America, and who face a steeper
and steeper climb back into a career with every additional
month they spend out of work.
I really appreciate the Chairman holding this hearing to
discuss this important issue and give a voice to the long-term
unemployed.
I am absolutely committed to working with all of my
colleagues to extend unemployment insurance and to keep working
to give the long-term unemployed the skills and resources they
need to get back on the job and give back to their communities.
Prepared Statement of Alex M. Brill, Research Fellow,
American Enterprise Institute*
introduction
Chairman Harkin, Ranking Member Enzi, and members of the committee,
my name is Alex Brill, and I am a research fellow at the American
Enterprise Institute. Thank you for the opportunity to provide
testimony on the important topic of the status of long-term
unemployment in the United States.
---------------------------------------------------------------------------
* The views expressed in this testimony are those of the author
alone and do not necessarily represent those of the American Enterprise
Institute.
---------------------------------------------------------------------------
As my testimony will describe, the recent improvement in payrolls
and the unemployment rate are welcome news, but the plight of the long-
term unemployed in the United States is considerable. The policies that
have been executed since mid-2008 to foster an economic recovery have
failed to deliver measurable results, and those most hurt by the
current downturn are often the long-term unemployed. In fact, some
policy actions taken by Congress and the Administration have likely
exacerbated the duration of unemployment for some workers, the
consequences of which are significant fiscal, economic, and social
costs.
After a description of the recent and current labor market
situation, my testimony describes the social and economic costs of
long-term unemployment, followed by a description of the repeated and
costly Federal expansion of the unemployment insurance benefits
program. My testimony concludes with recommendations of changes to the
unemployment insurance program and other fiscal policy reforms
necessary to address this issue comprehensively.
Before delving into the specifics of the long-term unemployed, I
will first comment briefly on the labor market generally. At present,
the labor market is beginning to show some modest signs of improvement,
though the road to recovery will likely be a long one. The unemployment
rate has declined in 2011 relative to 2010 (though so has the labor
force participation rate); the number of new jobs created in the last 3
months averaged 143,000, an improvement from 84,000 per month in the 3
months preceding; and the 4-week moving average of the number of
workers claiming unemployment benefits for the first time has dipped to
388,000 from a peak above 600,000 in 2009.
While the labor market remains far worse than in early 2008, the
most recent data offer a positive sign. Nevertheless, the Congressional
Budget Office (CBO) expects the unemployment rate to average 8.5
percent through 2014.\1\ Compared to the 5.3 percent unemployment rate
that CBO expects in the long-run, this equates to an additional 5
million unemployed.
---------------------------------------------------------------------------
\1\ http://www.cbo.gov/ftpdocs/123xx/doc12316/EconomicTables.pdf.
---------------------------------------------------------------------------
Turning to the long-term unemployed--that is, workers who have been
jobless for 27 weeks or more--5.7 million Americans are thus
classified, representing 43 percent of all unemployed. Figure 1
demonstrates how the percentage of unemployed, who are long-term
unemployed, has jumped in the last several years. As the figure shows,
it is typical for this metric to increase following a recession, but
the current levels are unprecedented.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

As discussed in greater detail below, long-term unemployment is
devastating to individuals and their families. In particular, workers
unemployed for years instead of weeks or months have a difficult time
reentering the workforce and finding employment comparable to their
previous jobs. In addition, long-term unemployment represents a serious
financial challenge to the unemployment insurance (UI) system, which is
intended to provide temporary relief to individuals in their search for
jobs and was not designed to sustain the long-term unemployed as it has
in the last several years. Given this, it is important to focus not
only on the plight of the long-term unemployed, but also on the
sustainability and purpose of unemployment assistance.
Knowing how devastating long-term unemployment is to workers, the
economy, and the unemployment system, it behooves policymakers to find
an effective way to help people avoid remaining unemployed for over a
year. The failure of policymakers to stave off the surge in long-term
unemployment that began in earnest in 2009 will have substantial
detrimental consequences.
key points to consider in addressing long-term unemployment
Given budgetary pressures, as well as evidence that excessive weeks
of UI benefits elongate unemployment spells for some workers, Congress
must approach the current unemployment situation with targeted and
cost-effective measures. Before offering recommendations for how
Congress should proceed, however, I will highlight three points that
are important for policymakers to keep in mind as they determine how
best to help those who have been or will be unemployed for a relatively
short period of time (roughly up to 6 months) compared to those
experiencing an extended period of unemployment:
1. There is no single, national labor market in an economy as large
and diverse as the United States. Labor markets are a local phenomenon.
The appropriate duration of unemployment benefits depends on individual
labor market conditions. In other words, when conditions deteriorate in
a particular labor market, it may be reasonable to provide benefits for
a longer period of time if finding employment in that labor market is
likely to take longer. It will always be more efficient to target any
additional benefits only to the labor markets experiencing distress.
2. The consequences of long-term unemployment are particularly
damaging to our economy and society. Beyond the obvious impact that
unemployment has on production and aggregate demand, long-term
unemployment has broader, more lasting consequences.
3. The policy response to sustained high unemployment has been
enormous both in budgetary terms and in terms of additional weeks of
unemployment benefits, which have been extended from 26 weeks to 99
weeks in certain States. However, no implemented policy, including the
$825 billion stimulus bill enacted in February 2009, has been shown to
clearly improve the economy.
1. There is no single labor market in the United States
As I noted in testimony on UI benefits before the House
Subcommittee on Income Security and Family Support in April 2008,
looking at the aggregate U.S. labor market is useful for gauging simple
economic trends, but in reality our economy is composed of numerous and
distinct labor markets.\2\ This is important in the context of long-
term unemployment because there are variations in long-term
unemployment statistics depending on which labor market is under
examination, as I will discuss in greater detail below.
---------------------------------------------------------------------------
\2\ http://aei.org/files/2008/04/10/20080411_BrillTestimony.pdf.
---------------------------------------------------------------------------
On the macro level, despite recent improvements, the aggregate U.S.
labor market is performing poorly by virtually any metric. The
unemployment rate in the first 11 months of 2011 averaged 9.0 percent,
an improvement from an average rate of 9.6 percent in 2010 but still
high. Roughly 13 million people were unemployed in November, down from
a monthly high of 15.6 million in October 2009 but far above the 7.4
million unemployed in February 2008. Furthermore, recent data released
by the Bureau of Labor Statistics (BLS) indicates that in 2010, 25.2
million workers were unemployed at some point during the year.
However, a disaggregate inspection is necessary in order to
carefully evaluate the condition of our economy. Such a review can
include a detailed inspection of labor markets across States, across
industries, by educational attainment, by age, by duration of
unemployment, or by multiple factors simultaneously.
In this section, I will first highlight unemployment rates by
State, as the percentage of workers seeking employment is one measure
of slack in the labor force and there is significant variation across
States. Then, I will examine unemployment duration by State, worker
age, and industry. Current labor market statistics are not always
available for this analysis, but while there have been modest
improvements since 2010, the general conclusions are unchanged.
These unemployment duration statistics are important for a number
of reasons, one of which is that the long-term unemployed, as mentioned
above, have more difficulty returning to work. According to a recent
BLS report, 30 percent of those unemployed for less than 5 weeks in
2010 became employed in the subsequent month versus remaining
unemployed or dropping out of the workforce. Among those unemployed for
27 weeks or more, that probability of employment dropped to just 10
percent.\3\
---------------------------------------------------------------------------
\3\ http://www.bls.gov/opub/ils/pdf/opbils89.pdf.
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State unemployment rates. In November 2011, the national average
unemployment rate was 8.6 percent. However, this national average masks
considerable regional variation. For example, the unemployment rate in
Nevada (13.0 percent), California (11.3 percent), the District of
Columbia (10.6 percent), Mississippi (10.5 percent), and Rhode Island
(10.5 percent) are all well above the national average.
Conversely, the unemployment rate was relatively low in North
Dakota (3.4 percent), Nebraska (4.1 percent), South Dakota (4.3
percent), New Hampshire (5.2 percent), and Vermont (5.3 percent).
Figure 2 presents the variation in unemployment rates by State.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Furthermore, the change in the unemployment rate can vary
considerably across States, as the recovery is occurring at a different
pace in different markets. For example, New Mexico experienced a
statistically significant 2.1 percentage point drop in its State
unemployment rate over the previous 12 months, while the District of
Columbia's unemployment rate rose 0.9 percentage points. A number of
States have recently reached their highest level of unemployment (since
records were first kept in 1976). Colorado hit its highest unemployment
rate on record in February 2011; Idaho in March 2011; and California,
Florida, Georgia, and Nevada in December 2010.
Duration of unemployment by State. Nationally, the average duration
of unemployment was 40.9 weeks in November 2011, and, as mentioned
above, 43 percent of the unemployed have been unemployed for more than
6 months, which is an increase from 21 percent 3 years ago. While data
for 2010 and 2011 are not yet available, BLS has reported on the mean
and median duration of unemployment by State for 2007, 2008, and
2009.\4\ In 2009, 51 percent of the unemployed were unemployed more
than 15 weeks. However, 58 percent of workers in Florida were out of
work for more than 15 weeks, while in North Dakota, South Dakota, and
Wyoming, less than 35 percent of workers remained unemployed for that
amount of time or longer.
---------------------------------------------------------------------------
\4\ http://www.bls.gov/opub/mlr/2010/12/art3full.pdf.
---------------------------------------------------------------------------
Duration of unemployment by worker age. BLS also provides data on
the duration of unemployment based on the age of workers.\5\ In 2010,
unemployed workers 20-24 years of age were unemployed for an average of
19.5 weeks. Conversely, the average unemployment spell for workers age
55-64 was more than twice as long at 41.1 weeks.
---------------------------------------------------------------------------
\5\ http://www.bls.gov/cps/cpsaat31.pdf.
---------------------------------------------------------------------------
Duration of unemployment by industry. By industry, BLS reports that
in 2010, workers in the manufacturing sectors (where employment is
falling) experienced average unemployment durations of 40 weeks, while
those in education and health services (a sector with increasing
employment) averaged 29.9 weeks of unemployment.\6\
---------------------------------------------------------------------------
\6\ http://www.bls.gov/cps/cpsaat32.pdf.
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2. Long-term unemployment is particularly damaging to our
economy and
society
Weak labor markets--particularly long average unemployment
durations--have significant consequences. As other witnesses noted, it
is more difficult to return to employment after being unemployed for a
long period of time. Workers may lose current skills and/or may be
stigmatized by future employers. In addition, while many households may
be able to cushion the financial blow of short-term unemployment with a
combination of personal savings (a ``rainy day'' fund) and UI benefits,
a lengthy period of unemployment can devastate personal resources,
causing severe financial strain.
University of Chicago economist Robert Shimer studied the
probability of a worker becoming reemployed as a function of his or her
length of unemployment and determined that reemployment becomes
dramatically more difficult as one remains unemployed longer.
Specifically, after examining workers and their employment status from
1976 to 2007, Shimer concludes that the probability of reemployment
within 1 month drops from 51 percent for those unemployed just 1 week
to 31 percent for workers unemployed less than 6 months to 14 percent
for workers unemployed more than a year.\7\ Furthermore, Nobel Prize-
winning economist, Christopher Pissarides, has shown that workers'
losing their skills during a period of unemployment can result in a
longer persistence of high unemployment in the overall economy.\8\
---------------------------------------------------------------------------
\7\ http://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.98.2.268.
\8\ http://ideas.repec.org/a/tpr/qjecon/v107y1992i4p1371-91.html.
---------------------------------------------------------------------------
Economists have also documented other consequences of weak labor
markets on our society. Catherine Maclean, a doctoral student at
Cornell University, has shown that men entering the workforce during
periods of high unemployment are more likely to experience poor health
at age 40 than men who enter the workforce during a period of
relatively low unemployment.\9\
---------------------------------------------------------------------------
\9\ http://yale.edu/adhvaryu/Maclean_JMP.pdf.
---------------------------------------------------------------------------
Timothy J. Classen of Loyola University Chicago and Richard A. Dunn
of Texas A&M published research in February 2011 that identifies
unemployment duration as ``the dominant force in the relationship
between job loss and suicide.'' \10\ This research follows a long
literature examining the health and suicide consequences of
unemployment.
---------------------------------------------------------------------------
\10\ http://www.ncbi.nlm.nih.gov/pubmed/21322087.
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In addition to the societal and personal impact of long-term
unemployment, the economic effects are significant. Beyond the obvious
detriment to the economy in terms of lost production and consumption by
the long-term unemployed, a very long duration of UI benefits as we
have seen in the last few years--up to 99 weeks in some States, as
mentioned above--actually results in an increase in the unemployment
rate. As Harvard economist Martin Feldstein testified in 2007,

``While raising unemployment benefits or extending the
duration of benefits beyond 26 weeks would help some
individuals who might otherwise face financial hardship, it
would also create undesirable incentives for individuals to
delay returning to work.'' \11\
---------------------------------------------------------------------------
\11\ http://finance.senate.gov/imo/media/doc/012408mftest.pdf.

Labor economists have devised a range of estimates gauging the
effect of extended UI benefits on the unemployment rate. One recent
conservative estimate by Rob Valletta and Katherine Kuang at the
Federal Reserve Board of San Francisco shows that the current 99 weeks
of UI benefits raises the unemployment rate by 0.4 percentage points.
\12\ Others have recently estimated the effect to be considerably
larger. Shigeru Fujita of the Federal Reserve Bank of Philadelphia
finds that the current benefit structure raises the unemployment rate
for males about 1.2 percentage points. \13\
---------------------------------------------------------------------------
\12\ http://www.frbsf.org/publications/economics/letter/2010/
el2010-12.html.
\13\ https://www.philadelphiafed.org/research-and-data/
publications/working-papers/2010/wp10-35R.pdf.
---------------------------------------------------------------------------
Conversely, Jesse Rothstein at the University of California,
Berkeley, found the effect to be much smaller, although still
significant, particularly with regard to the long-term unemployed.\14\
---------------------------------------------------------------------------
\14\ http://gsppi.berkeley.edu/faculty/jrothstein/published/
rothstein-ui-july132011.pdf.
---------------------------------------------------------------------------
An important caveat to this research is to note that longer
duration of benefits is not always an adverse outcome. It is
appropriate to provide benefits to assist unemployed workers in
completing an optimal search for the ``right'' next job. Absent any UI
benefit program, workers may not have the resources to complete an
appropriate search.
Nevertheless, 99 weeks of benefits, as is currently provided in
many States, is nearly quadruple the duration of benefits normally
offered in the United States and is unprecedented.
3. The policy response has been enormous in budgetary terms
and additional weeks of UI benefits
This month, Congress is in the midst of debating an extension of
extended Federal UI benefits. This would be the 10th time since June
30, 2008, that Congress has enacted legislation providing emergency UI
benefits with a combined net cost of $180 billion (see table 1).

Table 1.--Federal UI Extension Bills, June 2008-December 2010
------------------------------------------------------------------------
UI spending
added to
Title Date signed into law debt [in
billions of
dollars]
------------------------------------------------------------------------
Supplemental Appropriations Act of June 30, 2008........ $13
2008.
Unemployment Compensation Extension November 21, 2008.... 6
Act of 2008.
American Recovery and Reinvestment February 17, 2009.... 39
Act of 2009.
Worker, Homeownership, and Business November 6, 2009..... 0
Assistance Act of 2009.
Department of Defense December 19, 2009.... 11
Appropriations Act, 2010.
Temporary Extension Act of 2010.... March 2, 2010........ 7
Continuing Extension Act of 2010... April 15, 2010....... 13
Unemployment Compensation Extension July 22, 2010........ 34
Act of 2010.
Tax Relief, UI Reauthorization, and December 17, 2010.... 57
Job Creation Act of 2010.
-------------
Total.......................... $180
------------------------------------------------------------------------
Source: Congressional Budget Office.

These costs are only the direct Federal expenditures. Before
unemployed workers receive Federal UI benefits, they first must exhaust
their State's unemployment benefits, generally 26 weeks. In fiscal year
2011, total UI payments (State and Federal combined) were $119 billion.
In 2010, total UI benefits paid were $156 billion, and in 2009, they
were $120 billion. These compare to outlay totals of $32 billion and
$33 billion in 2006 and 2007, respectively.\15\ Over 3 years, roughly
$300 billion in UI payments above the normal level is a significant
amount of stimulus and deficit spending that is often not recognized.
It is a sizable cost even compared to the American Recovery and
Reinvestment Act (ARRA), which is now estimated to have cost $825
billion (including $39 billion in UI benefits).
---------------------------------------------------------------------------
\15\ http://workforcesecurity.doleta.gov/unemploy/pdf/MSR.pdf.
---------------------------------------------------------------------------
The recent recession has forced the majority of States to
completely exhaust their State unemployment trust funds, and those
funds are now insolvent. Put simply, fewer workers are subject to the
State and Federal UI taxes, and far more workers are claiming benefits.
As of December 15, 2011, UI trust funds in 27 States and the Virgin
Islands were insolvent, requiring loans from the Federal Government
totaling nearly $39 billion.\16\
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\16\ http://workforcesecurity.doleta.gov/unemploy/
budget.asp#tfloans.
---------------------------------------------------------------------------
Furthermore, as a result of depleted UI trust funds, many States
are experiencing tax increases. The 5.4 percent FUTA tax credit that is
provided to a State that is in compliance with the Federal rules
governing UI is reduced for States with outstanding UI loan balances
for two consecutive years. In 2010, employers in three States--Indiana,
South Carolina, and Michigan--were not entitled to the entire 5.4
percent credit. In 2011, 21 States faced a reduced FUTA credit. For
most States, the credit is reduced 0.3 percentage points, but Indiana's
credit is reduced 0.6 percentage points, and Michigan's is reduced 0.9
percentage points. The reduction in this credit translates directly
into a higher tax bill for employers in those States.
conclusion and policy recommendations
Recent labor market data have shown some improvement, but
unemployment remains a serious problem, particularly with regard to
long-term unemployment. At present, Congress is debating a potential
12-month extension of UI benefits. Legislation that passed the House of
Representatives on December 13, H.R. 3630, contained a number of
changes to the UI program aimed at improving outcomes. In recognition
of the modest improvement in the labor market and the potential harmful
effects of providing nearly 2 years instead of 6 months of unemployment
benefits, H.R. 3630 adjusts the duration of benefits to a maximum of 79
weeks beginning January 1, 2012, and to 59 weeks by July 2012 for most
States.
Furthermore, recognizing that many unemployed, particularly those
who are long-term unemployed, may lack the necessary skills and
training to return productively to the workforce, H.R. 3630 establishes
a requirement for job search, and requires that those with the most
difficulty reentering the workforce participate in GED programs or
training to assist them in the quest for reemployment. Furthermore, the
House-passed bill contains provisions to permit States to obtain
waivers from the Federal Government to engage in new strategies to help
unemployed workers beyond the traditional weekly benefit check.
These provisions are common-sense increments toward a better
unemployment program. It is time to move away from the Obama
administration's ill-fated efforts to address unemployment woes through
the ineffective ARRA and repeated blanket extensions of UI benefits.
The House proposal maintains benefits at more than double their normal
levels, and the new requirements on the States are in many respects
modest. These are important first steps toward orienting the UI program
more toward helping people get reemployed rather than simply helping
sustain those who are unemployed. Congress should pursue these changes
now and continue to explore more radical reforms to the UI system to
more strongly encourage reemployment and retraining.
Broader and bolder policy reforms outside of unemployment insurance
will also be necessary to facilitate a full recovery of the labor
market. The status quo of policies is not serving workers well. No
single policy change will suffice, and policymakers need to examine tax
reform, trade promotion, education policy, and broad fiscal measures to
tame the long-run deficit outlook. Sadly, many workers who have been
out of work for an extended period of time may never fully regain their
financial footing. But if Congress pursues an aggressive agenda, it may
be able to prevent more workers from suffering the same fate in the
future.
Prepared Statement of Robert Johnson, Harding County Commissioner,
Harding County, SD
I am a County Commissioner of Harding County, SD and have been
involved with the proposed Keystone XL TransCanada pipeline project
since its' first route consideration through our county. Our County has
been very active in researching and learning the pros and cons of this
project and the impact that it will and could have on our community.
While the timeframe for the installation of the pipeline through
our county will be relatively brief (approximately 6 to 8 months) we
have all agreed that the impact will be significant. The creation of
jobs from the project will be very welcome and needed. These jobs will
vary based on the need, from people that have professional
qualifications (welders for example) to people that can assist with
vehicle maintenance all the way to washing clothes.
Our county is in a unique location. We are on the southern edge of
the Bakken oil play in North Dakota. We see a constant flow of people
traveling through our community going north to find work. People are
hungry and desperate for jobs and willing to work to hold on to the
homes and families that they are leaving behind. The Keystone XL
Pipeline would also offer a job base outside of the oil play and give
opportunities to people that are so desperately needing jobs across the
Nation.
The jobs created from this project for the most part will be short
term. But the jobs very well could be for a long enough duration to get
the people that need the jobs to a financial point that they will be
able to survive the economic downturn that our economy is currently
facing.
The Keystone XL Pipeline is nothing but an absolute win-win project
for our county and the Nation. The amount of revenue that will be
generated by local governments and our schools will provide an economic
boost to the citizens that these agencies serve by enhancing services
and reducing costs to the local taxpayers due to an added property tax
base.
Harding County supports this project and, quite truthfully, needs
this project. We do not feel that this project will jeopardize our way
of life, it will in fact give us the ability to maintain our way of
life by offering more jobs and income into our communities.
Prepared Statement of the National Small Business Association (NSBA)
Chairman Harkin, Ranking member Enzi and members of the committee,
on behalf of the 150,000 small-business owners represented by the
National Small Business Association (NSBA), I would like to thank you
for the opportunity to discuss proposals to bar discrimination against
the unemployed.
There are several recent proposals to enact a new law making
unlawful discrimination against individuals based on their status as
unemployed. Proposed legislation includes three bills that would enact
a Fair Employment Opportunity Act of 2011, (S. 1471, H.R. 2501, H.R.
1113) and subtitle D of the proposed American Jobs Act of 2011 \1\
released by the White House on September 12, 2011. Enacting these
proposals would be a serious mistake.
---------------------------------------------------------------------------
\1\ See Subtitle D ( 371-79) of the proposed legislation.
Available at: http://www.whitehouse.
gov/sites/default/files/omb/legislative/reports/american-jobs-act.pdf.
---------------------------------------------------------------------------
There is no credible evidence that small businesses discriminate
against the unemployed. Doing so would deprive an employer of many good
potential hires. What the bill would do, however, is enrich trial
lawyers at the expense of small businesses and lead to a new wave of
litigation. Litigation is expensive and wasteful and will harm the
ability of small firms to hire new workers.
These proposals would exacerbate the problems faced by the
unemployed, slow economic growth and cause unemployment, rather than
reduce it. First and foremost, they would harm the very employers that
would employ the unemployed and reduce the resources they have
available to grow their businesses and hire people. The proposals would
have a disproportionate adverse impact on small businesses. Each
decision to interview an unemployed person would be fraught with legal
risk. Business would need to expend resources to familiarize themselves
with yet another regulation of their hiring practices and, eventually,
the case law that develops around the new statute. They would have to
expend funds retaining counsel and drafting new human resources
directives. They would have to expend funds training their managers.
Obviously, only one person can be hired for each position. Yet each
unemployed person who is interviewed but not hired would become a
lawsuit waiting to happen. The risk of these lawsuits will increase the
effective cost of employment hiring. The reality of these lawsuits or
threats of lawsuits, although enriching the plaintiff 's bar, will
reduce the resources that businesses have to hire people, to grow their
businesses and to make products or provide services that consumers
want.
Litigation is very expensive. Allegations that an unemployed person
was discriminated against will become commonplace, particularly if the
job happened to go to a more qualified employed person. Businesses will
often be forced to settle unfounded claims rather than litigate because
the cost of litigation is so high.
There is no credible evidence that there is a problem of
discrimination against the unemployed. No rational employer would fail
to hire a qualified person because they are currently unemployed. It
would be contrary to their self-interest. Employers want the most
qualified person at the least possible expense. If that person is
unemployed, they will hire them. If that person is employed, they will
hire that person but hiring that person creates an opening. It does not
increase unemployment.
What does create unemployment are policies, such as these
proposals, that substantially raise the cost of employing people and
reduce the resources that employers have to hire people. What reduces
unemployment are policies that cause the economy to grow and increase
the aggregate level of employment.
The NSBA strongly urges Congress to oppose the Fair Employment
Opportunity Act or any other proposal that would permit lawsuits based
on a person's status as unemployed.
______

[PR Newswire-USNewswire--November 10, 2011]

Build America So America Works--LiUNA! Builds America
``job killers win, american workers lose''
Washington, DC--Terry O'Sullivan, General President of LIUNA--the
Laborers' International Union of North America *--made the following
statement today in response to the U.S. State Department delay of the
construction of the Keystone XL pipeline :
---------------------------------------------------------------------------
* The half-million members of LIUNA--the Laborers' International
Union of North America--are on the forefront of the construction
industry, a powerhouse of workers who are proud to build America.

``Environmentalists formed a circle around the White House
and within days the Obama administration chose to inflict a
potentially fatal delay to a project that is not just a
pipeline, but is a lifeline for thousands of desperate working
men and women. The Administration chose to support
environmentalists over jobs--job-killers win, American workers
lose.
Environmental groups from the Natural Resources Defense
Council to the Sierra Club may be dancing in the streets,
having delayed and possibly stopped yet another project that
would put men and women back to work. While they celebrate,
pipeline workers will continue to lose their homes and
livelihoods.
We had hoped the decision would have been made on the basis
of economics, facts and the best interests of the Nation, not
on the basis of a political calculation.
The State Department should have been freed to make its
decision, and then allowed the State and people of Nebraska to
proceed with their concerns through the many avenues available
to them. That would have been a sign of the Administration's
support for jobs and a recognition that workers can't wait
until after the next election for a job.
We are extremely disappointed.''
______

Response to Questions of Senator Enzi by Christine L. Owens
Question 1. As you acknowledge in your testimony, inadequate job
creation is the principal barrier to work for the unemployed. Mr. Meyer
described the many thousands of new jobs that could be created if the
Keystone Pipeline project was allowed to move forward, instead of being
halted until after next year's election. As I mentioned, there are at
least four labor unions that also support this project and the jobs it
would create. Wouldn't the creation of these new jobs help lower this
barrier?
Answer 1. Robust job creation is ultimately the solution to our
unemployment crisis, and will also reduce budget deficits. NELP has not
taken a position on the Keystone Pipeline project, but we are aware
that there are a number of questions and competing views regarding the
number of jobs it would create, its environmental impacts, and the most
effective strategies for meeting the Nation's energy needs.

Question 2. You testified that lack of jobs, discrimination and
credit checks are the principal reason unemployed jobseekers are unable
to find work. You did not mention potential mismatch of a jobseeker's
skills with the skills required for available job openings. Do you
believe that some long-term unemployed individuals may have skills that
have not kept up with the current job market, or do not match the needs
of their community?
I have worked on bipartisan job training legislation which would
specifically improve coordination of job training services for
unemployment recipients. For example, it would require that all UI
recipients get referrals to, and application assistance for, training
and education resources and programs, including Federal Pell grants and
WIA training and education programs. Do you support WIA
reauthorization?
Answer 2. NELP staff have reviewed the literature regarding the
extent to which ``skills mismatch'' is a factor in the high rate of
long-term unemployment. Based on that review, we believe that while
there are some sectors (advanced manufacturing, for example) in which
there is some mismatch between the skills employers need and those job
applicants can provide, overall, the principal reason for persistent
high long-term unemployment remains the imbalance between the numbers
of unemployed workers looking for jobs and the numbers of jobs that
have been created.
NELP supports reauthorization of WIA. In June 2011, NELP submitted
formal comments to Senate HELP committee staff addressing the bi-
partisan working draft of WIA reauthorization. While we had suggestions
as to ways it could be strengthened, and noted a few sections with
which we did not agree, our comments were very positive as to both the
legislation and the process that was under-way in the Senate. We look
forward to bringing the knowledge and experience we have gained from
our direct hands-on experiences in helping laid off manufacturing
workers in the Midwest, as well as our interactions with unemployed
workers more generally, into discussions about how to best reform and
reauthorize this program.

Question 3. The legislation you are supporting here today would
create a new ``protected class'' of unemployed individuals. Some have
raised concerns that the additional litigation risk this bill would
expose employers to will encourage them to stop widely advertising job
openings. After all, posting job advertisements costs money and it
requires more man-hours to review applicants. The fewer people that
know of a job opening, the fewer that can claim they were denied
``consideration'' for it. If employers began to rely only on their
networks of current employees, friends, family, fellow church
congregants, etc. to fill open positions, I am concerned that it would
make the situation for the long-term unemployed even worse. These
individuals are less likely to be connected to networks that know about
jobs. Are you concerned about this negative consequence?
Answer 3. NELP is concerned with any obstacles that would limit
employment opportunities for the unemployed, particularly for those who
are experiencing long-term unemployment. With regard to this issue,
however, we think it is unlikely many employers (particularly large
employers) would stop advertising jobs because they were barred from
refusing to consider qualified applicants solely because of their
unemployment status; and we think the harm to unemployed workers that
results from discriminatory refusal to consider or hire them solely
because of their unemployment status far outweighs the potential risks
that banning the practice would give rise to negative consequences. We
believe most employers are motivated by a desire to recruit the largest
pool of qualified candidates possible, enabling them to review the
strongest candidates for open positions. We don't think they would
forego advertising job openings in response to legislation banning
discrimination based on unemployment status, any more than they forego
advertising because they are barred from other types of exclusionary
practices. The legislation also exempts small employers (those with 15
or fewer employees), who may be those most likely to rely on existing
networks and word-of-mouth recruitment.

Question 4. What is a Bona Fide Occupational Qualification? Can you
give us several examples?
Answer 4. A ``bona fide occupational qualification (BFOQ)'' is a
criterion or qualification possessed by an applicant or employee that
directly relates to the essential job duties for which the individual
is employed. Under Title VII of the Civil Rights Act and the Age
Discrimination in Employment Act, an employer may base a hiring
decision on sex, national origin, religion or age, if the employer can
demonstrate that the requirement is necessary for doing the job (a
BFOQ). The BFOQ is a narrow defense to what is otherwise a broad
prohibition against discrimination along these lines. The types of
examples that have been provided for BFOQ's with regard to sex involve
situations in which either a man or a woman is necessary for
authenticity or genuineness (e.g., an employer may limit hiring of
``actress'' roles to women). In the 1977 Supreme Court decision of
Dothard v. Rawlinson, the Court upheld the State of Alabama's claim
that ``male'' sex was a BFOQ for corrections officers who had regular
direct contact with inmates in the State's all-male maximum security
prisons (here, deciding that women's sex would make them vulnerable to
attack by the inmates and undermine security within the prisons).
BFOQ defenses are assessed and decided on a case-by-case basis. In
the context of discrimination against someone because of unemployment
status, an employer would be required to demonstrate that ``being
currently employed'' is essential to the job for which an individual is
applying. Examples of the types of situations in which we envision an
employer might argue that the status of being ``currently employed'' is
a BFOQ that might include jobs involving sophisticated and rapidly
changing technologies that individuals can reasonably stay on top of
only through current employment, or one to which a candidate is
required to bring an existing client base with which s/he is currently
working on an ongoing basis.

Question 5. Do you think the Fair Employment Opportunity Act will
create jobs? If so, how?
Answer 5. We believe the Fair Employment Opportunity Act will
strengthen the Nation's economic recovery, by helping to ensure that
qualified job applicants are fairly considered for job openings,
regardless of their current employment status, thus expanding and
enhancing the pool of qualified candidates from which employers may
choose. Re-opening employment opportunities for the long-term
unemployed, many of whom have years of workforce experience and bring a
strong work ethic, significant skills and deep commitment to
employment, will restore their earning power and consumption, reduce
their current reliance on unemployment insurance or public assistance,
and help them to begin to restore their retirement nest eggs. Rather
than squander the rich storehouse of human capital among the unemployed
(particularly the long-term unemployed), we believe our national goal
should be to maximize the skills, talents and experiences all workers,
including the unemployed, are able to bring to American workplaces.
That is key to building a strong economic recovery, which in turn will
promote more job growth.

Question 6. At the hearing you agreed to followup with me regarding
your view on whether employers actually use credit ratings/scores
during a pre-employment background check. This is an important point
because as you explain in your written testimony that a ``bad credit
rating undermines employability.'' I am told by the companies that
provide these consumer reports to employers that credit ratings are not
included. Please explain your view of whether or not this practice
exists.
Answer 6. The reference to ``credit ratings'' in my written
testimony was a mistake. The typical credit report generated by private
screening firms for employers includes information on an individual's
credit account(s), as well as on bankruptcies, foreclosures, liens and
other public record information. It does not include the individual's
credit score, but the underlying information provided above gives rise
to the individual's credit score. (I am correcting the mistaken
reference to credit ``ratings'' in my testimony and resubmitting it
along with these responses.)

Question 7. Do you support limiting an employer's use of pre-
employment criminal background checks? Do you think criminal background
checks have the same sort of effect as credit checks in terms of the
ability of unemployed individuals to get jobs?
Answer 7. NELP supports limiting the use of pre-employment criminal
background checks in ways that will reduce the extent to which such
checks unfairly or unnecessarily preclude qualified, rehabilitated job
applicants from job consideration. The Equal Employment Opportunity
Commission and the courts have recognized that criminal record
screening for employment may violate civil rights laws, because it will
often have a disparate impact on people of color, as a result of their
disproportionate representation within the criminal justice system.
According to a 2006 report authored by the U.S. Department of Justice
(The Attorney General's Report on Criminal History Background Checks,
June 2006, at page 3), the FBI's criminal records database is
significantly incomplete because it is ``still missing final
disposition information for approximately 50 percent of its records.''
A major survey of large employers found that 92 percent perform
criminal background checks on some or all of their job candidates,
which is up from 80 percent in 2004. The combination of this increase
in background screening, the relatively large share of Americans (1 in
5) who have something that will show up in a criminal record check, and
the incompleteness and inaccuracies of the databases means that
criminal record screening can be a crude but inefficient and
devastating tool for weeding out potential job candidates.
NELP supports criminal record screening that is appropriate to the
specific job for which a candidate applies, and that takes into account
the nature and severity of an offense, when it occurred, any
extenuating circumstances, and evidence of rehabilitation. Except in
limited circumstances, criminal record screening should not occur at
the application stage, but should be undertaken only after an applicant
has been able to demonstrate s/he is qualified for the position in
question, and the employer is considering an offer to the candidate.
NELP also supports efforts to clean up the FBI's criminal records
database, to ensure that only complete and accurate information about
job applicants is communicated to potential employers, and to provide
job applicants with appropriate protections in order to ensure that
they have adequate access to their own records and ample opportunities
to correct mistakes and incomplete information on those records.
Criminal background checks and credit checks play a role in
limiting employment opportunities for some of the unemployed. We are
unaware of any empirical analyses comparing the effects of criminal
records checks and of credit checks on employment opportunities for the
unemployed.

Question 8. At the hearing you stated that pre-employment credit
checks are relevant for only a ``particular narrow slice of jobs'' and
that ``in general, there is no basis for excluding someone from a job
because of an adverse credit report.'' Please provide a list of those
jobs in which such credit checks are relevant.
Answer 8. While it is impossible to provide a complete list of all
jobs for which a credit check is relevant, because decisions of this
nature are made on a case by case basis and will vary across employers
and industries, in general positions entailing fiduciary or financial
responsibilities--such as handling cash (either a company or client's
funds), accounting, banking or processing of consumer credit and debt
information--are the most likely examples of the kinds of jobs or
circumstances in which credit checks would be appropriate. However,
even where there is strong evidence that the inquiry into an
individual's credit history may be substantially related to the job, it
is necessary to have in place strong protections to ensure the accuracy
of the information and an opportunity for the individual to produce
information demonstrating particular circumstances, like job loss,
medical history, and other factors that fairly account for credit
issues. This is an area where more States have found it necessary to
limit access to credit history for employment screening purposes.

Question 9. For the NELP briefing paper titled, ``Hiring
Discrimination Against the Unemployed: Federal Bill Outlaws Excluding
the Unemployed from Job Opportunities, as Discriminatory Ads Persist,''
published on July 12, 2011, how many total job ads were reviewed?
Answer 9. Randomly reviewing online job postings over a limited
period of time in 2011, NELP identified about 150 ads that included
exclusions based on current employment status. NELP did not track the
number of ads reviewed.

Question 10. I agree that the long-term unemployed are looking for
jobs and not lawsuits. During the hearing, you stated it was an
``exaggeration'' to suggest there would be a lot of litigation against
business owners that would stem from making the unemployed a protected
class once the legislation you support--the Fair Employment Opportunity
Act--is enacted. You further stated that you believe it would be
``difficult to find lawyers who would bring these lawsuits.'' Do you
think an alternative dispute mechanism, instead of individual and class
actions against employers and employment agencies, would provide a
better way to handle allegations of discrimination?
Answer 10. Alternative dispute resolution (ADR) may be an
appropriate means for resolving disputes in some circumstances, e.g.,
when the issue is one that involves only the employer and complaining
employee; the parties have freely decided to submit the claim to ADR;
the dispute resolutions officer is neutral and/or jointly selected by
the claimant and employer; the claimant has access to all relevant
information regarding the dispute, and is able to present relevant
information in the process; the costs of the process are minimal; and
the process can provide meaningful relief and an opportunity for
review. We strongly oppose conditioning a job offer or continued
employment on requirements that applicants/employees agree to forego
rights to bring legal actions and to resolve any and all employment-
related claims through ADR. We also believe that because many mandatory
arbitration or other ADR procedures require employers and employees to
split costs, pursuing a claim can be prohibitively expensive, thus
deterring workers from coming forward. In addition, under most ADR
systems, the decision of the arbitration or other ADR officer is final
and not subject to judicial review--regardless of how arbitrary or
wrong the officer may be. We do not think any alternative dispute
resolution process should be able to enshrine a legal wrong.
Response to Questions of Senator Murray by Christine L. Owens
Question 1. We all know we need to get the debt and deficit under
control, but many of us also feel very strongly that investing in our
workers can have a positive impact both in the short and long-run. In a
recent report, the CBO wrote that households receiving unemployment
benefits spend their benefits quickly, making unemployment a timely and
cost-effective tool in spurring the demand for goods and services in
the economy. These benefits help many families from falling off a
financial cliff.
What would our economy look like right now without the Federal
emergency unemployment compensation program?
Answer 1. In July 2010, economist Wayne Vroman of the Urban
Institute wrote that ``the payment of extended [Federal] benefits has
helped to sustain real DPT during `the great recession' and estimates
from the model [used for the analysis] suggest a per-dollar effect on
real GDP is about the same as the effect of regular UI benefits [that
is, every dollar spent on the Federal benefits generated roughly $2 in
GDP growth]. The positive effect of extended benefits during 2008Q3-
2010Q2 raised real GDP by an average $57 billion per quarter while
regular program benefits raised real GDP by $71 billion over the same
period. Regular and extended benefits both operated to cushion the
falloff in real GDP.'' (Vroman, Wayne, The Role of UI as An Automatic
Stabilizer During a Recession, Impaq International, LLC, analysis
prepared as part of a multi-year contract with the Department of Labor
Employment & Training Administration, July 2010). An analysis of
Vroman's findings by the Center for American Progress concluded that
Federal benefits saved or created nearly 1.l million jobs in the fourth
quarter of 2009, while all benefits combined created or saved 2.3
million jobs during that period (on an annualized basis). (Boushey,
Heather & Matt Seppara, Unemployment Insurance Dollars Create Millions
of Jobs, Center for American Progress, 2011). In short, the programs of
Federal extended unemployment insurance have played a critical role in
saving or creating jobs and boosting overall GDP. Without these
benefits, more workers would be unemployed, the downturn would have
been even more severe, and the economy would be weaker than it is
today.

Question 2. The consequences of a worker being laid off are wide-
ranging. The issues are not limited to the ability of that worker to
pay the rent, put food on the table or fill the gas tank. Long-term
unemployment erodes workers' skills, puts a strain on the local
economy, and the State's UI trust fund as well.
Various experts have highlighted ``work sharing'' as a policy that
prevents lay-offs from occurring in the first place and keeps workers
attached to the labor market. In fact, ``work sharing'' has saved over
70,000 jobs in my State of Washington since 2009.
Can you explain how ``work sharing'' benefits both workers and
businesses; and what affect do these policies have on State UI Trust
funds?
Answer 2. ``Work-sharing'' or ``shared work'' are terms that refer
to a voluntary program that serves as an alternative to layoffs during
a temporary decline in business. Such programs are authorized under the
Short-time Compensation (STC) program within the Federal-State
unemployment insurance system. Under a work-sharing program, an
employer may reduce the hours and wages of employees (in lieu of worker
layoffs) and those employees may qualify for unemployment benefits to
compensate for the reduction in hours. There are currently 23 States
with federally approved work-sharing programs.\1\
The following example illustrates how the typical work-sharing
program operates. An employer is facing a temporary decrease in demand
for its product. Normally the employer would temporarily lay off three
full-time employees with the hope of recalling them in a few months
when demand increased. However, under an approved work-sharing plan,
the employer could instead elect to reduce the schedules of 15 full-
time employees from 40 to 32 hours. Each of the 15 employees would
become eligible for a work-sharing benefit that is equivalent to 20
percent of the unemployment insurance (UI) benefit that the worker
would have received if he or she had been fully unemployed.
Under the UI law of most States, workers cannot typically qualify
for a partial unemployment benefit when working 3 or 4 days in a week;
however under a voluntary work-sharing plan in States with STC laws,
workers can qualify for a prorated UI benefit while maintaining
employer attachment. Thus, in the example above, each worker would
receive 80 percent of their regular pay and an unemployment benefit
that would replace a portion of the 5th day.
How do work-sharing programs benefit workers? Workers retain their
jobs and the financial security that comes with continuing employment.
They are compensated for the day or two of unemployment they experience
and are able to continue to meet their financial obligations and to
contribute to their local economies. Workers can retain their health
insurance and keep accruing any retirement benefits. In addition,
employees avoid the economic and emotional hardship associated with
layoffs, and the stress of looking for a new job in a tough labor
market is averted.

What are the benefits of work-sharing programs for employers?
Participating employers are able to retain a skilled, trained workforce
and do not incur new training costs when a business upswing occurs and
laid-off workers are no longer available for recall. In addition, by
committing to workforce continuity and job security, employers enjoy
the benefits of increased employee morale. This program does not create
additional UI costs for employers since the charges for 1 week of UI
benefits are equivalent to the charges for five employees each
receiving 20 percent of a full week's benefit. Because the employer is
certifying that any reduction of hours through work-sharing is in lieu
of the same number of hours reduced through layoff, the resultant UI
costs should be virtually the same. Because work-sharing benefits are
replacing UI benefits that would otherwise be paid to laid off workers,
the impact on State UI trust funds is minimal.

Question 3. For decades, this country has stood against employment
discrimination. People who lost work through no fault of their own face
numerous barriers to reemployment, and I am disappointed that some
employers have chosen policies to ``weed out'' the long-term unemployed
during their hiring process.
Can you explain to us how these discriminatory hiring policies have
manifested themselves during this recession?
Answer 3. Based on our review of the literature, analyses of online
job postings, and direct reports from unemployed workers,
discriminatory hiring policies are manifested in the following ways:

Job postings that include exclusionary language, such as
``must be currently employed'' or ``must be recently employed''. (On
one occasion, we reviewed an ad that explicitly indicated ``no
unemployed'' candidates would be considered, but that language is
rare);
A number of articles (identified in my written testimony)
have quoted job recruiters, job placement industry representatives and/
or human resources professionals as saying their clients (employers)
will not consider unemployed candidates;
Unemployed workers have described to us specific
situations in which they were told by recruiters that their resumes
would not be referred for consideration, because they are unemployed;
The anecdotal evidence indicating that the unemployed,
particularly the long-term unemployed, apply for numerous jobs for
which they are qualified without hearing back from recruiters/placement
firms/employers could indicate that the unemployed are screened out of
the review process. With job openings still limited and many candidates
for each job, employers may find it efficient to use a blunt screen
like current employment status to winnow the list, and may assume that
being currently employed is a reasonable proxy for qualification for
the job.

A copy of my February 2010 testimony before the United States Equal
Employment Opportunity Commission is attached to these responses. The
testimony describes in greater detail the bulleted points set out
above.

Question 4. I was encouraged to see that President Obama included
specific funding for reemployment services for the long-term unemployed
in his jobs bill.
We know that one-on-one, intensive services can help many find
opportunities they may have missed on their own. However, the systems
that provide these services have been depleted of sufficient funding
for so long that it's hard to provide this level of attention on a
regular basis. That's why I fought to include a focus on reemployment
services in the Recovery Act.
How can intensive, reemployment services help the long-term
unemployed sharpen their skills and get back on the pathway to work?
Answer 4. Under provisions of the President's American Jobs Act,
States would be required to (a) design more rigorous reemployment
services for the long-term unemployed, (b) assess the eligibility of
the longest term unemployed, and (c) help the long-term unemployed
develop work-search plans. NELP agrees that these steps would be
important in focusing on the challenges facing the long-term
unemployed. UI claimants should receive individualized reemployment
assistance, including referrals to job openings and in-person
counseling on work search plans--strategies that have proven effective
in getting unemployed workers back to work as quickly as possible.\2\
The Employment Service, established by the Wagner-Peyser Act in
1933 as the Nation's public labor exchange mechanism, benefits both
workers and employers, enabling employers to find qualified workers
more quickly and employees to gain reemployment or better employment.
UI plays a role in unemployed workers' return to work by requiring
claimants to register for work and disqualifying those who refuse
offers of suitable work. In addition to its public labor exchange
functions, the Employment Service is charged with enforcing the UI work
search test. And, since 1995, most UI claimants have been ``profiled''
by State UI agencies so that those who are deemed most likely to
exhaust benefits and require reemployment services are referred to such
services with a suspension of UI benefits if they do not cooperate.
Despite its role in these important labor market functions,
Employment Service funding under the Wagner-Peyser Act has remained
stagnant (in the $700 million range) since the 1980's. And
notwithstanding concern expressed by employers about enforcing the UI
work search test, the public Employment Service program has languished
as a program that receives little attention or support. Employment
services are important because they are universal and available to both
employed and unemployed jobseekers as well as UI claimants and jobless
workers who have exhausted UI. Yet, to a significant extent, fewer job
referrals are made to UI claimants in many States today due to the
decline in ES services.
Nonetheless, there is general agreement among program evaluators
that Employment Service job referrals and job search assistance are
``highly cost effective,'' \3\ returning as much as $4.50 to taxpayers
for every dollar spent.\4\ Studies by Lou Jacobson demonstrate that
personal contact by trained personnel with jobless workers can
particularly help shorten time spent on UI benefits. He has found that
States could improve job search assistance and shorten unemployment
spells by increasing the number of unemployed individuals who visit
one-stops for group workshops and one-on-one counseling; expanding job
development (i.e., employer outreach) to ensure that more jobs are
listed on public labor exchanges; and providing assessment and
counseling for potential trainees to determine what type of training,
if any, would be most beneficial.\5\ His work calls particular
attention to automation used in Oregon and Washington that immediately
list job openings and notify jobseekers of openings in their
occupational fields.
Over the last decade, the services provided to UI claimants have
shifted from in-person counseling and job referrals to group services
and various forms of self-help, mostly through the use of on-line job
search tools. Starting in 2005, the Federal Government responded to the
need for more direct reemployment services with the Reemployment and
Eligibility Assessment (REA) initiative, which has provided about $150
million to 40 States. A recent evaluation of the program found that in
most States, it helped reduce the duration of benefits. NELP strongly
supports the provision of in-person reemployment services, especially
for the long-term unemployed and those identified as at risk of
exhausting their UI benefits. Given that unemployed workers out-number
job openings by more than four to one, it is important that the intent
of these reemployment programs be to provide the long-term unemployed
with constructive assistance in directing their job searches, finding
ways to quickly upgrade workplace skills and otherwise becoming more
employable.

Question 5a. When the economy is struggling to add new, quality
jobs, many turn to education and training programs to brush up on their
skills or acquire new ones for a different industry or occupation.
For many years our workers have been able to turn to our
educational institutions and our public workforce system to get the
skills and training they need to get back on the jobs or advance their
careers. In fact, this is exactly what my own mother did when she
unexpectedly needed to get back in the workforce after my dad got sick.
Government programs were there for her, and it made a huge difference
for our family.
Unfortunately, the programs that have supported so many workers and
families have been under attack recently by House Republicans on every
front. In their budget proposal, they cut Pell grants for low-skilled
or low-income working adults, and workforce funding was reduced by 75
percent at a time when these workers need more access to education and
training, than ever.
I think this is the wrong way to go. If we want our workers to fill
the 21st century jobs our country is fighting to create, we are going
to need more education and training, not less.
How important is access to education and training resources for the
long-term
unemployed in their efforts to sharpen skills or prepare for a new
career?
Answer 5a. According to a recent Hamilton Project report, of the 15
million workers displaced between 2007 and 2010, 7 million had been at
their jobs for 3 years or more (Jacobson et al., 2011, 5). Even after
finding work, high-tenured displaced workers typically experience
annual earnings losses of 15 to 25 percent, resulting in $220,000 worth
of lost wages over a lifetime (Jacobson et al., 2011, 5).
A 2005 evaluation of community college-based retraining in
Washington State found that displaced workers earned approximately
$1,390 (or 4.4 percent) more per year after retraining, based on only
one-half year of schooling.\6\ Meanwhile workers who trained for 1 year
in more technical fields saw annual gains of up to $3,000 (Jacobson et
al., 2011, 11). However, only 15 percent of high-tenured displaced
workers enrolled in community college-based training and less than one-
quarter of those who attended community college completed a year or
more of training (Jacobson et al., 2011, 11).
Jacobson et al., estimate that the opportunity cost, for a 40-year-
old displaced worker with children, of a 2-year training program is
over $93,000 (2011, 14). The authors conclude that the rate of return
to society for subsidizing ``high-return'' training for displaced
workers is in the 7-12 percent range and is just as efficient to
subsidize formal schooling for children (2011, 15).

Question 5b. How would these workers and employers benefit from
additional funding in on-the-job or customized training?
Answer 5b. Kevin Hollenbeck of the Upjohn Institute evaluated the
Massachusetts Workforce Training Fund that provides matching grants to
employers to provide incumbent worker training (Hollenbeck 2008, 7).\7\
Hollenbeck concluded that as a result of the incumbent worker training
program, ``primary sector jobs were created or retained at a public
cost of less than $9,000 per job--a cost that rivals or bests most
economic development initiatives'' (2008, 20). The estimated return on
investment for the first year following training was 5.4 percent for
workers; 16.6 percent for firms; and 38.9 percent for the State (2008,
18). Over 90 percent of firms participating in the training grant
program reported productivity and competitiveness improvements (2008,
10).
Of the firms surveyed in the Massachusetts study, training grants
led 30 percent to add workers and allowed 20 percent to avert
layoffs.\8\ Bartik finds that funding for incumbent worker training
may be 10 times as effective in creating jobs and earnings as business
tax breaks (Bartik 2009, 13). He estimates that expanding Michigan's $5
million customized training program by $30 million would increase the
present value of earnings for Michigan residents by $900 million
(Bartik 2009, 13).

Question 6. Millions of our fellow citizens have been severely
impacted by the recession, returning veterans, older Americans,
minorities; the list goes on and on. However, one group that often goes
unmentioned is our Nation's youth.
Youth employment right now is the worst we've seen since World War
II. This is especially problematic because we know serious delays at
the beginning of a worker's career severely decrease lifetime earnings
and career outcomes.
Early work experience helps to shape young peoples' work ethic and
their work history, meaning they are more likely to pursue and achieve
advancement in the workplace. These experiences help shape the next
generation of leaders and the future health of our economy.
So, the fact that more youth than ever are finding it extremely
difficult to find work--coupled with the fact that an alarming one-
third of our high school students drop out before graduating--is a
serious problem for the future of our country and our economy.
Can you explain how the recession has impacted today's youth and
their prospect for long-term employment? What impact has this had on
their families?
Answer 6. During congressional testimony, economist Till von
Wachter summarized the impact of a recession on the employment
opportunities for young workers:

``The available evidence suggests that the consequences from
entering the labor market in a recession are severe in both the
short and the long run. In the short run, labor market entrants
and young workers suffer from larger increases in unemployment
and layoffs than the average worker. Yet, even in the long-run
young workers--who enter with no prior employment history and
are presumably most flexible--can suffer from initial bad luck
for a long period of time.'' \9\ (Wachter 2010, 1).

According to Watcher, the adverse impact of entering the labor
force during a recession can last for 10 to 15 years as the result of
young workers settling for jobs they otherwise would not have taken,
while some workers never fully recover (2010, 2).
The impact of a recession on future earnings varies by education,
with lower educated workers experiencing a larger increase in
unemployment in the short run, but recovering more quickly (along with
highly educated workers) in the long run (Wachter 2010, 2). Those
workers in the middle ``suffer close to permanent earnings consequences
from entering the labor market in a recession'' (2010, 2).
Anecdotally, we know that the incidence of young people moving back
in with their parents has increased over the last several years. For
many, shouldering huge amounts of college debt coupled with the
inability to find good jobs (or any work) has added strains to their
families' lives.
References
\1\ These States are Arizona, Arkansas, California, Colorado,
Connecticut, Florida, Iowa, Kansas, Maine, Maryland, Massachusetts,
Minnesota, Missouri, New Hampshire, New York, Oklahoma, Oregon,
Pennsylvania, Rhode Island, Texas, Vermont and Washington. In January
2012, Governor Chris Christie signed a New Jersey work sharing program
into law.
\2\ Paul Decker, Robert Olsen, Lance Freeman and Daniel Klepinger,
``Assisting UI Claimants: The Long Term Impacts of Job Search
Assistance Demonstration,'' U.S. DOL Occasional Paper 2000-2,(2000),
http://wdr.doleta.gov/owsdrr/00-2/00-02.pdf; Stephen Woodbury, ``Long
Term Effects of the Work Test and Job Search Assistance: Reexamining
the Washington Alternative Work Search Experiment'' (2001), http://
econ.as.nyu.edu/docs/IO/14690/Woodbury_20100412.pdf.
\3\ O'Leary and Eberts, supra, p. viii; Louis S. Jacobson,
``Strengthening One-Stop Career Centers: Helping More Unemployed
Workers Find Jobs and Build Skills,'' Brookings Institution (2009), p.
8, http://www.brookings.edu/papers/2009/0402_
jobs_skills_jacobson.aspx.
\4\ Jacobson (2009), p. 29.
\5\ Based on previous demonstration projects, Jacobson estimates
that UI weeks claimed could be reduced by 1.1 weeks for claimant call-
ins, 2.8 weeks for job search assistance, 3.8 weeks for job
development, and 0.8 weeks for counseling for potential trainees. Id.
at p. 24, Table 2A.
\6\ Louis S. Jacobson, Robert J. LaLonde and Daniel G. Sullivan.
2011. ``Policies to Reduce High-Tenured Displaced Workers' Earnings
Losses Through Retraining.'' Discussion Paper, Hamilton Project,
Brookings Institution, Washington, DC http://www.brookings.edu//media/
Files/rc/papers/2011/11_displaced_JLS/11_dis-
placed_JLS_paper.pdf.
\7\ Kevin Hollenbeck. 2008. ``Is There a Role for Public Support of
Incumbent Worker On-the-Job Training?'' Kalamazoo, MI: The W.E. Upjohn
Institute for Employment Research http://research.upjohn.org/cgi/
viewcontent.cgi?article=1155&context
=up_workingpapers.
\8\ Tim Bartik. 2009. ``What Should Michigan Be Doing To Promote
Long-Run Economic Development? '' Kalamazoo, MI: The W.E. Upjohn
Institute for Employment Research http://research.upjohn.org/
up_workingpapers/160/.
\9\ Till von Wachter. ``Avoiding a Lost Generation: How to Minimize
the Impact of the Great Recession on Young Workers.'' Hearing of Joint
Economic Committee of U.S. Congress, May 26, 2010 http://
www.columbia.edu/ vw2112/testimony
_JEC_Till_von_Wachter_26May2010_final.pdf.
______

Attachment.--Statement of Christine L. Owens Before the Equal
Employment Opportunity Commission Meeting on ``Out of Work, Out of
Luck? Denying Employment Opportunities to Unemployed Job Seekers''
(February 16, 2010)
The National Employment Law Project (NELP) commends the Equal
Employment Opportunity Commission (EEOC) for its concern about employer
exclusion of the unemployed from job opportunities. We appreciate the
opportunity today's forum provides for NELP and others to address this
important issue.
NELP is a national non-profit organization that engages in
research, education, and advocacy on behalf of low-wage and unemployed
workers and individuals facing unfair and unlawful barriers to
employment. Through our dedicated Web site for unemployed workers
(www.unemployedworkers.org) and our close partnerships with State-based
organizations, NELP maintains ongoing and direct contact with jobless
workers that informs our awareness of the problems they face and the
policies and strategies needed to support their return to work. The
arbitrary employment barriers facing the long-term unemployed are
reminiscent of those confronting another group of workers for whom we
advocate, individuals with criminal records. NELP's efforts to restore
employment opportunities for the latter group include an extensive
title VII program combining outreach and case development, training,
policy advocacy and litigation, all focused on reinvigorating
enforcement of and compliance with title VII's prohibition of selection
procedures that have a disparate impact on protected classes.
At NELP, we believe that the best way to create a healthy,
sustainable and growing economy is for the public and private sectors
to work together to boost job creation and ensure that all who want to
work have access to jobs for which they are qualified. That means,
among things, eliminating arbitrary employment barriers that operate to
weed out qualified and interested job applicants based on biased
assumptions or on objective practices that have a disproportionately
harsh impact on identified groups.
Excluding unemployed workers from consideration for jobs is one
such barrier, which is not only unfair but also may violate basic civil
rights protections because of the disparate impact of such policies on
older workers, workers of color, women or other protected groups. At a
moment when we all should be doing whatever we can to open up job
opportunities to the unemployed, it is profoundly disturbing that the
trend of deliberately excluding the jobless from work opportunities is
on the rise.
The Jobs Crisis Facing the Unemployed: As the jobs crisis persists,
millions of unemployed workers are facing the bleakest employment
prospects in a generation. NELP estimates that throughout 2010, 3.9
million unemployed workers exhausted all of their unemployment benefits
without finding new work. And while some of those have presumably found
employment by now, the Congressional Research Service estimated that in
October 2010, there were roughly 1.5 million very long-term unemployed
workers--that is, jobless workers who had been unemployed for 99 weeks
or longer.\1\
---------------------------------------------------------------------------
\1\ U.S. Congressional Research Service, ``The Trend in Long-Term
Unemployment and Characteristics of Workers Unemployed for More than 99
Weeks,'' (R41559; Dec. 20, 2010), by Gerald Mayer, p. 5.
---------------------------------------------------------------------------
Meanwhile, although the official unemployment rate dipped again in
January, employers added only 36,000 jobs to their payrolls. We have
2.2 million fewer jobs overall today than 10 years ago, while the
working age population has grown by almost 10 million. Simply returning
to where we were at the beginning of the recession would require that
the economy add roughly 11 million jobs; the addition of only a little
more than 1 million since job growth resumed in March 2010 has hardly
made a dent in our huge jobs deficit.
The recent dip in the overall unemployment rate is a misleading
sign with respect to the economy's overall health: A principal reason
for the dip is that the number of persons marginally attached to the
labor force--that is, they want jobs and are available to work, and
have looked in the last year but not the last month--rose to 2.8
million in January, the highest number on record. There are still
roughly five officially unemployed jobseekers for every new job
opening, which accounts for the Great Recession's record levels and
rates of long-term unemployment.
The dire job market has made it essential that Congress and the
Administration maintain the most robust program of unemployment
insurance benefits in the Nation's history. But what's needed most--and
what all unemployed workers most want--is jobs. Meeting that need
requires sound public policies that help encourage job growth and a
willingness on the part of employers to make job openings equally
available to all qualified jobseekers, without regard to their current
employment status. Sadly, as this forum illustrates, it appears the
latter is not happening.
Unemployed Need Not Apply: Stories suggesting systematic exclusion,
often blatant, of unemployed workers from consideration for jobs began
to emerge early last summer. In May and June, local media in Atlanta
along with The Huffington Post and CNNMoney.com reported that Sony
Ericsson, a global phone manufacturer that was expanding operations in
Georgia, had posted a job announcement for a marketing position that
explicitly said, ``No Unemployed Candidates Will Be Considered At
All.'' \2\ Similar accounts of such exclusions reported around the same
time included:
---------------------------------------------------------------------------
\2\ 11Alive.com, ``Job Listing: Unemployed Need Not Apply,'' http:/
/www.11alive.com/rss/rss_story.aspx?storyid=144719, May 31, 2010; Laura
Bassett, ``Disturbing Job Ads: `The Unemployed Will Not Be
Considered','' The Huffington Post, http://www.huffingtonpost.com/2010/
06/04/disturbing-job-ads-the-un_n_600665.html, June 4, 2010, updated
Aug. 8, 2010; Chris Isidore, ``Looking for work? Unemployed need not
apply,'' CNNMoney.com, http://money
.cnn.com/2010/06/16/news/economy/unemployed_need_not_apply/index.htm,
June 16, 2010.

An ad posted on The People Place (a job recruiting Web
site) by an anonymous Angleton, TX electronics firm seeking a ``quality
engineer''; the ad specified the company would ``not consider/review
anyone NOT currently employed regardless of the reason'' \3\;
---------------------------------------------------------------------------
\3\ Bassett, ``Disturbing Job Ads,'' op. cit.
---------------------------------------------------------------------------
A Craigslist posting for assistant restaurant managers in
Edgewater, NJ, flatly requiring that applicants ``Must be currently
employed'' \4\;
---------------------------------------------------------------------------
\4\ Ibid.
---------------------------------------------------------------------------
Numerous listings for grocery store managers throughout
the Southeast posted in the spring by a South Carolina recruiting firm,
Latro Consulting, which included restrictions against considering
unemployed applicants; the restrictions were removed after CNN
Money.com inquired about the practice.\5\
---------------------------------------------------------------------------
\5\ Isidore, op. cit.

Subsequent reports confirm that the practice of including bans on
unemployed applicants in job ads has continued. See, for example,
``Outlook poor for long-term unemployed,'' The Atlanta Journal
Constitution, October 4, 2010 (http://www.ajc.com/business/outlook-
poor-for-long-657702.html); ``Employers Continue to Discriminate
Against Jobless, Think `The Best People Are Already Working','' The
Huffington Post, October 8, 2010 (http://www.huffingtonpost.com/2010/
10/08/employers-continue-to-dis_n_756136.html); ``Long-term unemployed
face stigmas in job search,'' USA Today, January 23, 2011 (http://
www.usatoday.com/money/economy/employment/2011-01-23-longterm-
unemployed_N.htm); ``How Employers Weed Out Unemployed Job Applicants,
Others, Behind The Scenes,'' The Huffington Post, January 14, 2011
(http://www.huffingtonpost.com/2011/01/14/unemployed-job-applicants-
discrimination_n_809010.html).
While refusal to consider the unemployed is sometimes overtly noted
in ads, at NELP we also hear regularly from unemployed workers--mostly
older workers--who despite years in the labor force and significant
directly relevant experience are nevertheless told they will not be
referred or considered for employment, once recruiters or potential
employers learn they are not currently working.
That happened to 53-year-old Michelle Chesney-Offutt from Illinois,
who wrote us that after working successfully for 19 years as an IT help
supervisor, she was laid off in 2008 due to the downturn. Many months
into her job search, a headhunter contacted her, excited about her
qualifications for a position he was retained to fill. The excitement
faded, however, when he learned she had been unemployed for more than a
year. As Ms. Chesney-Offutt put it, ``When he realized this, he was
very apologetic, but had to admit to me that he would not be able to
present me for an interview due to the `over 6 month unemployed' policy
that his client adhered to.'' The headhunter, she told NELP, explained
that his client expressly prohibited him from referring workers who had
been unemployed for 6 months or more. When we last spoke to Chesney-
Offutt, she was still unemployed, had exhausted all unemployment
benefits, was restructuring her mortgage, and had applied for SNAP
(food stamps) and welfare--a first for her.
Kelly Wiedemer, a 45-year-old former operations analyst in
Colorado, wrote describing a similar experience. She responded to a
local staffing firm's November 2010 posting for a financial systems
analyst experienced in implementing a software package she had put in
place in her previous job. The agency called her immediately but after
the recruiter learned of Ms. Wiedemer's unemployment, her enthusiasm
cooled. The recruiter told Wiedemer that she would submit her resume
but that her ``long employment gap was going to be a tough sell.''
Wiedemer later followed up to express her continuing interest but was
not called for an interview.
Similarly, 44-year-old Angela Smith of Texas, an experienced
pharmaceutical sales representative who had posted her resume online,
wrote to share an email she had received from an executive recruiter
for a bio-pharmaceutical company seeking a specialty sales
representative. The recruiter had sent the email after seeing Ms.
Smith's resume--but the outreach was of little value to Ms. Smith,
since the email included an express caveat, required by the employer,
that ``Candidates must be currently employed in pharmaceutical sales,
or have left the industry within the last 6 months.''
Finally, there's 55-year-old Ginger Reynolds from California, who
wrote to tell us about receiving a call from a recruiter for a 6-month
contract position as a software systems engineer. The recruiter thought
Ms. Reynolds was a good fit for the job but upon learning of her
unemployment, told her she could not submit her resume because she had
not worked in the past 6 months.
Excluding the Unemployed Becoming Business as Usual: There is no
official data on how frequently unemployed workers are denied
consideration for jobs because of their employment status, but the
brazenness of the ads described above and the experiences jobless
workers shared with us suggest the practice is fairly common. That
suspicion is borne out by comments of human resource consultants and
recruiters willing to go on record about the practice. Rich Thompson,
vice president of learning and performance for Adecco Group North
America, the world's largest staffing firm, told CNNMoney.com last June
that companies' interest only in applicants who are currently working
``is more prevalent than it used to be . . . I don't have hard
numbers,'' he said, ``but three out of the last four conversations I've
had about openings, this requirement was brought up.'' \6\ Similarly,
Lisa Chenofsky Singer, a New Jersey human resources consultant
specializing in media and publishing jobs, commented that, ``Most
executive recruiters won't look at a candidate unless they have a job,
even if they don't like to admit it.'' According to Ms. Singer, the
first question she is generally asked when recommending a candidate is
whether the candidate is currently working--and if the candidate is
unemployed, the recruiter is not interested.\7\
---------------------------------------------------------------------------
\6\ Isidore, op. cit.
\7\ Ibid.
---------------------------------------------------------------------------
A January article posted on The Ladders, an online job search
resource site, further corroborates the widespread exclusion of jobless
workers from employment opportunities (``Uninterested in the
Unemployed,'' (https://recruit.theladders.com/recruiter-resource-
center/uninterested-in-unemployed). According to one quoted source,
Matt Deutsch, communications coordinator at TopEchelon.com, the
tendency to exclude the unemployed is ``growing.'' Deutsch said:

Not all companies are doing this, but it certainly has become
an issue. What's startling are the lengths to which companies
and recruiters are going to communicate this, such as including
the phrase ``Unemployed candidates will not be considered''
right in the job posting.\8\
---------------------------------------------------------------------------
\8\ Sharon L. Florentine, ``Uninterested in the Unemployed,'' The
Ladders, https://recruit.theladders.com/recruiter-resource-center/
uninterested-in-unemployed, Jan. 2011.

Deutsch speculates that some companies may rationalize the
exclusion on the assumption that the best candidates are likely to be
those who are currently working. But in an economy with such high
unemployment, he notes, it is simply not ``100 percent true'' that
being employed is a proxy for suitability for a position. More likely,
Deutsch says, firms are inundated with applications and screening out
the unemployed is ``a pretty simple metric that can easily reduce their
workload . . . '' \9\
---------------------------------------------------------------------------
\9\ Ibid.
---------------------------------------------------------------------------
Other staffing firm industry specialists similarly confirm that the
unemployed need not apply. Amherst Healthcare headhunter Isang Inokon
told The Huffington Post at the end of last year that ``he has trouble
placing jobless pharmacists because the reality of today's job market
is that employers `want somebody who's wanted' ''--that is, already
employed.\10\ Another executive recruiter who has worked for major
staffing firms for 20 years said, ``There's a lot of dirty stuff going
on, a lot of hush-hush discrimination, I can assure you. As a
recruiter,'' he said, ``you get an HR director on the phone, and they
tell you point blank, `We want somebody . . . [who] currently has a
job. We don't want to see a resume from anyone who's not working.' It
happens all the time.'' \11\
---------------------------------------------------------------------------
\10\ Laura Bassett, ``Employers Won't Hire The Jobless Because of
the `Desperate Vibe','' The Huffington Post, http://
www.huffingtonpost.com/2010/12/03/employers-wont-hire-the-u_n_
791710.html, Dec. 3, 2010, updated Feb. 2, 2011.
\11\ Laura Bassett, ``How Employers Weed Out Unemployed Job
Applicants, Others, Behind the Scenes,'' Huffington Post, http://
www.huffingtonpost.com/2011/01/14/unemployed-job-applicants-
discrimination_n_809010.html, Jan. 14, 2011.
---------------------------------------------------------------------------
In sum, there is a disturbing and growing trend among employers--
honored by staffing firms--to refuse to consider the unemployed for
available job openings, regardless of their qualifications. This
refusal is often explicitly manifested in job ads that include
restrictive language specifying that only currently employed candidates
will be considered; or that no unemployed candidates will be
considered, regardless of the reason for unemployment; or no candidate
unemployed for more than a certain period (e.g., 6 months) will be
considered. Employers or staffing firms questioned about such ads
typically pull the ads or delete the exclusionary language, but that
does not signal that they will not apply the exclusion in the selection
process. Even more insidious, staffing firms and recruiters are aware
of and honor employers' preferences for candidates who are currently
working, sometimes explicitly acknowledging to unemployed candidates
that they are doing so but more often than not, simply not providing
the reason the candidate will not advance through the process.
Blanket Exclusions of the Unemployed Has a Disparate Impact on
Workers Protected Under Title VII and the ADEA: Both Title VII of the
Civil Rights Act of 1964 (Title VII), 42 U.S.C. 2000 et seq., and the
Age Discrimination in Employment Act of 1967 (ADEA), 29 U.S.C. 621 et
seq., make it unlawful for employers to engage in practices that
``limit, segregate, or classify'' individuals in ways that will limit
or deny employment opportunities based on race, gender, color,
religion, ethnicity or age. Practices neutral on their face
nevertheless violate Title VII and the ADEA if they have a disparate
impact on members of protected classes. Griggs v. Duke Power Co., 401
U.S. 424 (1971); Smith v. City of Jackson, 544 U.S. 228 (2005).
Other witnesses are addressing the impact that refusal to consider
the unemployed has on women, people of color, people with disabilities
and other groups hit hard by unemployment. NELP's testimony speaks
largely to the impact of this exclusion on older workers. We note,
however, that the evidence is strong that excluding unemployed workers
from job consideration will have a disparate impact on people of color,
and this is particularly true for African-Americans. In January 2011,
when the official unemployment rate overall was 9.0 percent, the
unemployment rate for African-Americans was 15.7 percent, compared with
only 8.0 percent for white workers. That means that the share of
African-American workers adversely affected by an employer ban on
considering the unemployed is almost twice as large as the share of
white workers affected by the exclusion.
The impact of excluding unemployed workers from job consideration
is real and substantial for older workers as well. That's because the
persons most likely to be most affected by discrimination against the
unemployed are those who have been unemployed longest; and long-term
unemployment is far more likely among older unemployed workers than
among their younger counterparts.
As described in the preceding sections, bans on considering
unemployed workers for jobs are often linked to the duration of
individuals' joblessness; candidates unemployed 6 months or longer are
out of luck. Even absent such an explicit time limitation, longer
spells of unemployment are more likely to be obvious to employers and
recruiters than shorter spells, and hence, will more readily trigger
the assumptions that underlie exclusion of unemployed workers from job
consideration.
Among unemployed workers, older workers are much more likely than
their younger counterparts to experience long periods of unemployment
that undermine opportunities to return to work. As shown in Table 1,
older workers (55-64, or 65 and older) are almost equally likely to
have been unemployed for a year or more as they are to have been
unemployed for less than 6 months (more than 40 percent of older
workers in each category). Younger workers, on the other hand, are far
more likely to experience relatively short durations of unemployment
than long-term unemployment, with more than 60 percent of workers
younger than 35 years old unemployed for 6 months or less compared to
less than a quarter unemployed for more than a year. Thus, a policy
that excludes applicants from consideration based on duration of
unemployment will fall more harshly on older unemployed workers.
Data about average durations of unemployment further underscore the
disparate impact policies excluding persons unemployed for 6 months or
longer will have on older jobless workers--an impact that has
intensified as the jobs recovery has limped along. The average duration
of unemployment is correlated with age of unemployed workers: the older
the jobless worker, the longer (on average) the unemployment spell.
Average durations of unemployment have grown over the past year. In
January 2010, unemployed workers between the ages of 45-54 averaged
33.6 weeks of joblessness, compared to 42.0 weeks in January 2011. For
unemployed workers between the ages of 55 and 64, the average duration
rose from 37.4 weeks in January 2010 to 43.0 weeks in January 2011. And
for those older than 65 years, average duration of unemployment as of
January 2010 was 30.7 weeks, compared with 49.3 weeks as of January
2011. (See Table 2)
Thus, NELP believes that excluding the long-term unemployed from
consideration for jobs will typically have an age-based disparate
impact that can be justified only through an affirmative showing that a
reasonable factor other than age justifies the practice. Similarly, as
other witnesses will discuss in more detail, we believe these
exclusionary practices have a disparate impact on people of color,
especially African-Americans, who experience unusually high rates of
unemployment and long-term unemployment.
Advancing Other State and Federal Remedies: The critical first step
toward addressing this disturbing practice of shutting unemployed
workers out of jobs is happening today--exposing the practice,
exploring its legality, calling out employers and staffing firms that
engage in it, and educating the public about its devastating impact on
workers who need jobs, their families and communities. Excluding
unemployed workers from employment opportunities also has serious
negative consequences for the economy overall, increasing personal
indebtedness, bankruptcies, and foreclosures; destroying credit; and
diluting America's storehouse of human capital. Raising public and
policymaker awareness of this practice is thus both timely and
critically important.
Next, it's important to explore every available legal option to
prevent this practice from spreading and cause even more damage at a
time when workers are already suffering from record rates of
joblessness. NELP strongly encourages the EEOC to review application of
Title VII, the ADEA and the ADA to situations in which employers and/or
staffing firms explicitly exclude unemployed workers from job
consideration solely because of their unemployed status, or where
investigations--either based on charges filed with the EEOC or
initiated by the EEOC through a commissioner's charge or directed
investigation--support findings that respondents refused to consider
unemployed workers or long-term unemployed workers for job openings,
regardless of their qualifications.
But it's not up to the EEOC alone to help turn this situation
around. In addition, the EEOC should encourage State fair employment
practice agencies to monitor these practices locally--holding their own
forums, as the EEOC has done--and use their statutory authorities to
challenge it. Congress and the State legislatures should hold hearings
and, if needed, develop new laws to address the issue, perhaps building
on State laws that now bar retaliation against workers who file
unemployment claims.
At least one State, New Jersey, is also exploring legislation
(Assembly bill no. 3359) that would make it unlawful for employers or
their agents to include language in job postings that limits the
applicant pool to only those individuals currently employed. The
measure would impose civil penalties of up to $5,000 for first offenses
and up to $10,000 for subsequent offenses. The legislation passed the
New Jersey legislature but was ``conditionally'' vetoed by the
Governor, and returned for consideration of his specific objections.
Its review is ongoing.
conclusion
The purpose of 20th century fair employment laws--whether banning
discrimination based on race or gender, age, national origin,
disability status or otherwise--was to erase the biases that had
defined America's workplaces and remove arbitrary barriers that deny
employment opportunities to qualified individuals. Today's working
families, particularly those enduring unemployment, face a monumental
economic crisis that is exacerbated by employers' refusal to consider
unemployed workers for jobs--a refusal that falls especially harshly on
older workers, African-Americans and other protected groups. At a
moment when we have so far to go to rebuild a sustainable economy that
works for all, we hope employers will voluntarily step up, end the
exclusion of unemployed applicants, and make job opportunities equally
available to all who qualify. Many employers do so. But given the
pervasiveness of the practice of excluding the unemployed and its
implications for jobless workers and the economy, relying on the good
will of employers is not enough. The EEOC should continue to explore
this problem and utilize its authority to restore the promise of equal
opportunity for all.

Table 1.--Unemployment by Age
(Taken from Pew Center Analysis of Current Population Survey, Dec. 2010)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Under 20 20-24 25-34 35-44 45-54 55-64 65+ Total
--------------------------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------In thousands----------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------------------------------
Employed........................................................ 4,116 12,611 30,384 30,528 33,244 21,901 6,376 139,159
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unemployed:
<26 weeks..................................................... 970 1,336 1,965 1,340 1,281 697 206 7,796
27-51 weeks................................................... 125 306 451 391 417 229 60 1,979
>52 weeks..................................................... 167 448 875 860 1,037 626 209 4,221
---------------------------------------------------------------------------------------
Total....................................................... 1,262 2,090 3,291 2,591 2,735 1,552 475 13,997
--------------------------------------------------------------------------------------------------------------------------------------------------------
Labor Force..................................................... 5,378 14,701 33,675 33,119 35,980 23,452 6,851 153,156
--------------------------------------------------------------------------------------------------------------------------------------------------------
As Percentage of Unemployed (Within Age Band)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unemployed:
<26 weeks..................................................... 76.9 63.9 59.7 51.7 46.8 44.9 43.4 55.7
27-51 weeks................................................... 9.9 14.6 13.7 15.1 15.3 14.7 12.7 14.1
>52 weeks..................................................... 13.2 21.4 26.6 33.2 37.9 40.3 43.9 30.2
--------------------------------------------------------------------------------------------------------------------------------------------------------
Data is not seasonally adjusted.
Source: Addendum: A Year or More: The High Cost of Long-Term Unemployment, Pew Fiscal Analysis Initiative, Pew Charitable Trusts, http://
www.pewtrusts.org/our_work_detail.aspx?id=988, January 2011.

Table 2.--Average Duration of Unemployment by Age
January 2010, January 2011
------------------------------------------------------------------------
January 2010 January 2011
---------------------------------------
Weeks unemployed Weeks unemployed
Age group ---------------------------------------
Average Average
(mean) Median (mean) Median
duration duration duration duration
------------------------------------------------------------------------
Total, 16+...................... 28.9 *18.6 35.5 19.9
16-19........................... 20.8 12.2 21.4 11.7
20-24........................... 24.3 14.2 28.5 15.5
25-34........................... 28.3 19.1 32.8 17.8
35-44........................... 27.7 17.0 38.5 22.6
45-54........................... 33.6 24.1 42.0 27.5
55-64........................... 37.4 28.4 43.0 26.8
65 percent...................... 30.7 22.5 49.3 31.8
------------------------------------------------------------------------
Data not seasonally adjusted.
NELP analysis of CPS data.
Source: Bureau of Labor Statistics, Household Data, Table A-36.

Response to Questions of Senator Murray by Reverend Dr. Marvin Moss
Question 1. There is a lot of discussion among today's economists
about how the impact of sustained long-term unemployment will impact
the structural nature of the labor market in this country. More
importantly, there's an untold cost of being long-term unemployed to an
individual's dignity and sense of self-confidence. Supporting workers
during this trying time isn't only about putting us on the right course
for recovery, it's simply the right thing to do.
Can you help the committee further understand the impact that this
struggle can have on a working family's psyche and why it's important
that we as a nation stand with them?
Answer 1. Experience from our Cascade Career Network ministry,
discussion with other career ministry leaders, career coaches, and
grief experts suggested that job search momentum may be hampered by
depression, disillusionment, discouragement, and lack of resources to
handle a multitude of interrelated challenges at the same time
(finances, housing, transportation, child care, basic sustenance, bill
collectors, Internet access, etc). This led to some research and a
summary of a 2002 study that was published in the Journal of
Occupational Health Psychology concludes that job loss and the
resulting financial strain can lead to depression and strain on
relationships, lost personal confidence and lowered self-esteem.\1\
---------------------------------------------------------------------------
\1\ (See http://www.healthyplace.com/depression/workplace/study-
depression-from-job-loss-is-long-lasting/menu-id-68/).
The original study: Links in the chain of adversity following job
loss: How financial strain and loss of personal control lead to
depression, impaired functioning, and poor health; Price, Richard H.;
Choi, Jin Nam; Vinokur, Amiram D., Journal of Occupational Health
Psychology, Vol 7(4), Oct. 2002, 302-312. doi: 10.1037/1076-
8998.7.4.302.
---------------------------------------------------------------------------
As some of previously mentioned issues begin to compound due to
finances, without the communication and interpersonal skills to handle
the crisis, the psychological trauma on the family may also compound.
For single individuals, the circumstances may be no less traumatic as
they feel isolated and without familial support. As jobseekers heard
press accounts of ``why don't they just get a job'', some felt shame
and became further depressed with a loosening grip on their self worth.
Family and friends may also embrace the tough love approach, as our
society has little education on recognizing the symptoms of
depression--rather most of our society has been subconsciously trained
to hide negative feelings with expressions of ``I'm doing fine''. So it
is not unusual for anger and resentment to mount within the family
experiencing job loss. We do know of personal accounts where families
have dissolved under the pressures of job loss. One individual who
years later learned of the psychologically immobilizing symptoms of
grief associated with job loss expressed sorrow at divorcing the spouse
who she now recognized was depressed.
Observing the public scorn of long-term jobseekers, our society,
including children in the family of jobseekers, is subtly trained to
hide the circumstances of unemployment and not to discuss the emotional
pain. We do not know what impact this will have on the current and
future generations. However, it appears that in addition to the clergy,
it would be helpful to have an informed discussion of psychologist,
sociologists, and career development and workforce development
professionals to learn more from each other.

Question 2. Millions of our fellow citizens have been severely
impacted by the recession, returning veterans, older Americans,
minorities; the list goes on and on. However, one group that often goes
unmentioned is our Nation's youth.
Youth employment right now is the worst we've seen since World War
II. This is especially problematic because we know serious delays at
the beginning of a worker's career severely decrease lifetime earnings
and career outcomes.
Early work experience helps to shape young peoples' work ethic and
their work history, meaning they are more likely to pursue and achieve
advancement in the workplace. These experiences help shape the next
generation of leaders and the future health of our economy.
So, the fact that more youth than ever are finding it extremely
difficult to find work--coupled with the fact that an alarming one-
third of our high school students drop out before graduating--is a
serious problem for the future of our country and our economy.
Can you explain how the recession has impacted today's youth and
their prospect for long-term employment? What impact has this had on
their families?
Answer 2. In the case of youth, we think of high school students,
post high school youth who are not pursuing further education, and
college students; and I will limit my comments to the latter for the
purpose of these comments. As college tuitions have continued to rise,
more families are facing the prospect of not being able to meet the
tuition, room and board, and related expenses necessary to keep their
youth enrolled in college. In some cases, an evening job or summer job
can make the difference. For many families who always had the
wherewithal to meet the financial needs of their families, it is
painful for them as a parent, and discouraging to youth who have
experienced dramatic changes in their life circumstances. Yet for some
families, these circumstances will be an opportunity for the family to
come together and be strengthened. For others, the loss of direction
may result in poor choices and life setbacks. What cannot be
substituted however is the valuable experience that comes from
employment, and for many will be instrumental in helping them gain
permanent employment after graduation.
______

Consumer Data Industry Association (CDIA),
Washington, DC 20005,
December 21, 2011.
Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Re: Comment submitted for the record for the hearing, ``Tales from the
Unemployment Line: Barriers Facing the Long-Term Unemployed'',
December 8, 2011

Dear Senator Enzi: I write on behalf of the Consumer Data Industry
Association (CDIA) to clear up some confusion left from your
committee's December 8, 2011 hearing, ``Tales from the Unemployment
Line: Barriers Facing the Long-Term Unemployed.'' \1\
---------------------------------------------------------------------------
\1\ CDIA was founded in 1906 and is the international trade
association that represents some 200 consumer data companies. CDIA
members represent the Nation's leading institutions in credit
reporting, mortgage reporting, check verification, fraud prevention,
risk management, employment reporting, tenant screening and collection
services.
---------------------------------------------------------------------------
At that hearing, during testimony from and questions to Christine
Owens of the National Employment Law Project (NELP), there seemed to be
some confusion about whether credit scores are used for employment
decisions. The use of credit reports in employment decisions is a
reliable tool, used in appropriate circumstances, by responsible
employers to manage risk to their businesses, customers, and employees.
However, to clear up confusion regarding the use of credit scores for
employment decisions, I would like to be clear: CDIA members, which
include the nationwide consumer reporting agencies, do not provide
credit scores for employment decisions.
Sincerely,
Eric J. Ellman,
Vice President, Public Policy
& Legal Affairs.

Rapid City Economic Development,
Rapid City, SD 57701,
December 2, 2011.
Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Re: Support for Keystone XL Pipeline--Job Creation, Economic Benefits

Dear Senator Enzi: I am writing to express our strong support for
the Keystone XL pipeline. We believe moving forward on this project is
in the best interests of our region and country and fully support it
for three important reasons:

1. Economic Growth. Keystone XL will provide significant economic
benefits for our Nation, State and region. The pipeline is expected to
create approximately 20,000 manufacturing and construction jobs in the
United States and will result in over $5.5 billion in new spending in
the Keystone XL corridor States, including $470 million in South
Dakota. It will also generate an additional $5.2 billion in property
taxes during the operating life of the pipeline. At a time when State
and local governments across the country are struggling to balance
budgets, and the national unemployment remains over 9 percent, these
revenue and employment benefits are critical.
2. Energy Security. By increasing our access to energy supplies in
Canada, our neighbor and loyal ally, as well as domestic supplies from
the Bakken Formation here at home, the pipeline will be critical to our
country's efforts to reduce our dependence on Middle East and
Venezuelan oil by as much as 40 percent. By providing refineries along
the Texas Gulf Coast with more than 700,000 barrels of oil each day
from domestic and Canadian resources, this pipeline will dramatically
reduce our reliance on oil imports from volatile regions of the world.
3. Environmental Sensitivity. As leaders from the region that the
Keystone XL pipeline will traverse, we applaud and respect the
Department of State's thoroughness and agree with the Final EIS
conclusion that there are no substantial environmental concerns that
should prevent construction of this valuable energy infrastructure
project.

We urge leaders in Congress, the White House and the State
Department to move expeditiously to approve the pipeline and grant
TransCanada the Presidential permit it needs to proceed.
Sincerely,
Benjamin L. Snow,
President.
______

Society for Human Resource Management (SHRM),
Alexandria, VA 22314-3499,
December 22, 2011.
Hon. Tom Harkin, Chairman,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Hon. Michael B. Enzi, Ranking Member,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.

Dear Chairman Harkin and Ranking Member Enzi: I am writing to
submit this letter to the official record for the Committee on Health,
Education, Labor, and Pensions hearing ``Tales from the Unemployment
Line: Barriers Facing the Long-Term Unemployed'' held on December 8,
2011.
The Society for Human Resource Management (SHRM) is the world's
largest association devoted to human resource (HR) management.
Representing more than 250,000 members in over 140 countries, the
Society serves the needs of HR professionals and advances the interests
of the HR profession. Founded in 1948, SHRM has more than 575
affiliated chapters within the United States and subsidiary offices in
China and India.
We have appreciated a long, working relationship with both of you
and your staffs, as well as with the National Employment Law Project.
But we are writing to clarify the hearing record regarding SHRM's
survey data on employer background investigations that was cited during
the December 8 hearing. In 2010, SHRM released a survey of HR
professionals entitled ``Background Checking: The Implications of
Credit Background Checks on Hiring Decisions,'' and in 1998, SHRM
promulgated a different survey called ``Reference and Background
Checking.''
Christine Owens, executive director of the National Employment Law
Project, testified during the December 8 hearing on employer use of
credit background screening. Specifically, Ms. Owens' testimony stated:

``Data from the Society for Human Resource Management (SHRM)
indicates that credit background screening has exploded in
recent years, rising from 25 percent of employers in 1998 to 60
percent in SHRM's most recent survey, reported in December
2010.''

Unfortunately, the NELP statement draws a conclusion that is, at
best, incorrect, and at worst, selective and misleading. Specifically,
NELP's reference to the 1998 data fails to include all of the positive
responses to the question which asked ``How frequently does your
organization, or an agency hired by your organization check any of the
following references for its job candidates?'' Under the possible
response ``Credit checks,'' 12 percent of respondents revealed that
they conduct credit checks ``Regularly,'' 13 percent selected
``Sometimes,'' and 17 percent selected ``Rarely.'' Thus, at a minimum,
42 percent of employers revealed they conducted credit checks in 1998,
not 25 percent as stated in the NELP testimony. It is worthwhile to
note that 49 percent indicated they ``Never'' conduct credit checks on
job candidates in 1998.\1\
---------------------------------------------------------------------------
\1\ Society for Human Resource Management. Reference and Background
Checking. 1998.
---------------------------------------------------------------------------
Whereas, in 2010, the SHRM survey asked respondents ``Does your
organization or an agency hired by your organization, conduct credit
background checks for any job candidates by reviewing the candidates'
consumer reports?'' The 2010 SHRM poll found that 60 percent of
employer respondents conduct credit checks on at least some applicants,
however 40 percent indicated that they do not conduct credit checks on
any job candidates. But within the 60 percent total, only 13 percent of
employers consider credit information for all job applicants. Another
47 percent of employers use credit checks, but they only perform checks
on applicants for certain positions. As an example, 91 percent of
employers that conduct credit checks do so for jobs that involve
handling money.\2\
---------------------------------------------------------------------------
\2\ Society for Human Resource Management. Background Checking:
Conducting Credit Background Checks. 2010.
---------------------------------------------------------------------------
Later during the hearing, in response to Senator Enzi asking ``Is
there evidence that the employers are actually using credit rating
scores?'' Ms. Owens replied by again comparing the 1998 and 2010 survey
results:

``Well, I would refer, again, to my testimony. And I don't
know, Senator Enzi, about whether what they use is scores or
some other kind of information. But the Society for Human
Resource Management reported at the end of 2010 on its survey
of employers and their use of credit background checks as part
of the employment screening process and found that 60 percent
of employers said that they were doing credit background
checks. And that was an increase from 25 percent in 1998, so
there certainly is, at least in terms of SHRM, which is a very
well-recognized human resource organization nationally--there
is evidence--significant evidence that employers have access to
some credit rating information which they use.''

It is important to note that employers do not have access to credit
scores at all, only the credit histories themselves. The Fair Credit
Reporting Act (FCRA) authorizes employers to obtain a credit report for
``employment purposes'' from a consumer reporting agency, but these
reports do not include credit scores. The FCRA requires employers to
clearly disclose to the individual, in writing, that a report may be
obtained for employment purposes and to get his or her written
authorization. FCRA also requires that the employer provide the
individual with a copy of the report and a written description of the
consumer's rights before taking any adverse action based in whole or in
part on the report.
The 2010 SHRM survey further demonstrated that:

If a negative credit incident is found, the vast majority
of employers (87 percent) give the applicant an opportunity to explain
the circumstances of the incident. Employers are not required to seek
an explanation, but such followup allows applicants a chance to learn
of potentially inaccurate credit information or to give details about
an incident.
Only specific credit information affects hiring decisions.
Of the relatively few employers that check applicants' credit reports,
pending debt lawsuits (64 percent) and accounts in debt collection (49
percent) were cited as issues most likely to affect their decision to
extend a job offer.
Of the relatively few employers that check applicants'
credit reports, practically no employers consider past medical-related
debt (1 percent) and very few consider home foreclosures (11 percent)
when making an employment decision.
The vast majority of employers that conduct credit
background checks on job candidates look at 6-7 years of credit
history, not isolated debt incidents.\3\
---------------------------------------------------------------------------
\3\ Society for Human Resource Management. ``Background Checking:
Conducting Credit Background Checks.'' 2010.

Chairman Harkin and Senator Enzi, employers perform background
checks on potential hires that may include verification of educational
and professional history, professional licensure contacting references,
and in some cases, a review of an employee's credit history. SHRM
believes that background investigations--including credit checks--serve
as an important means to helping employers ensure safe and secure work
environments for current and future employees, customers and the
public. Credit checks are important in part because it is increasingly
difficult for employers to get a complete picture about a job
candidate. For example, reference checks often yield little robust
information because parties providing references are often concerned
about defamation lawsuits.
SHRM is very concerned about legislative and regulatory efforts to
place blanket restrictions or outright prohibitions on the rights of
organizations under the FCRA to consider credit information in making
employment decisions. Credit checks are conducted because the
consequences of making a poor hire are significant. Employers must be
conscientious during the hiring process due to the organizational
threats of financial mismanagement, embezzlement, theft, legal
liability and identity theft. According to a 2008 report by the
Association of Certified Fraud Examiners, employee financial
difficulties and living beyond one's means were the two most common
warning signs for employees who commit workplace fraud.\4\ New
restrictions on credit checks would remove an important tool that
employers can use to help them make good hiring decisions and
consequently protect employees, customers and the public.
---------------------------------------------------------------------------
\4\ Association of Certified Fraud Examiners. Report to the Nation
on Occupational Fraud and Abuse. 2008.
---------------------------------------------------------------------------
Furthermore, employees and job applicants are already protected by
the Fair Credit Reporting Act, which requires an employer to provide
advance notice and secure a signed consent to a job applicant that a
credit check may be done. If an applicant is not hired in part because
of a credit report, the employer must inform an applicant of the
decision and provide a copy of the report. The 2010 SHRM survey \5\
showed that the vast majority of employers (87 percent) go beyond what
the FCRA requires by giving an applicant an opportunity to explain the
circumstances of a noteworthy credit incident in his or past. Such
followup allows applicants a chance to learn of potentially inaccurate
credit information or to give details about an incident.
---------------------------------------------------------------------------
\5\ The 2010 SHRM survey ``Background Checking: The Implications of
Credit Background Checks on Hiring Decisions,'' can be found at:
www.shrm.org/Research/SurveyFindings/Articles/Pages/
BackgroundCheckingImplications.aspx.
---------------------------------------------------------------------------
If you have any questions, please contact Michael Layman on SHRM's
Government Affairs staff at [email protected] or 703-535-6058.
Thank you for your consideration of this request.
Sincerely,
Michael P. Aitken,
Vice President of Government Affairs.
Union Letters
Building and Construction Trades Department,
American Federation of Labor--Congress of
Industrial Organizations (AFL-CIO),
Washington, DC 20006-4104,
January 25, 2011.
The Honorable Barack H. Obama,
President of the United States,
The White House,
Washington, DC 20500.

Dear President Obama: The Building and Construction Trades
Department, AFL-CIO shares your Administration's vision for a modern
U.S. energy policy that calls for enhancing our energy security,
developing self-reliant North American energy production and improving
our Nation's economy. We believe that approval of the Keystone XL
pipeline takes a major step toward helping us reach those important
goals.
The Keystone XL project will construct a 2,000-mile, 36-inch crude
oil pipeline beginning in Alberta, Canada and extending southeast
through several States. This $12 billion project will substantially
expand the underground pipeline infrastructure in the United States
allowing for the transportation of crude oil from Canada to Gulf Coast
refineries. By constructing a safe, reliable method for transporting
crude through the Midwest, this initiative not only fulfills sound U.S.
energy policy goals, but will spur employment opportunities for
American workers in the construction industry, as well as many other
industries.
It has been estimated that construction of the pipeline, scheduled
to take place from 2011 to 2012, will create 13,000 high-paying
construction jobs alone. In addition, it is estimated that over 340,000
additional U.S. jobs will be generated between 2011 and 2015 in related
manufacturing and service industries as a result of the pipeline and
development of resources in Canada. This private sector initiative will
provide millions of dollars in economic stimulus and needed revenues to
State and local communities throughout the country.
This critical project will also strengthen our energy security and
flexibility. Canada, already the No. 1 supplier of oil and natural gas
to the United States, and second in the world only to Saudi Arabia with
its large oil reserves, is a friendly and reliable ally. In a world
where energy supply risks are increasing, we believe it would be a
mistake to turn away from our neighbor and miss the opportunity to
fully benefit from the development of safe, secure and abundant energy
resources.
Although the final Environmental Impact Statement has not been
released, the Draft Environmental Impact Statement (DEIS) concluded
that the proposed Keystone XL Pipeline would have ``limited adverse
environmental impact during construction and operation'' and that it
would significantly strengthen U.S. economic security. We encourage
your Administration to conclude it's review of the DEIS as quickly as
practical so that the necessary permits can be issued. The sooner these
actions are completed the sooner projects benefits will be realized.
Sincerely,
Mark H. Ayers,
President.
______

International Brotherhood of Teamsters,
Washington, DC 20001,
October 22, 2010.
The Honorable Hillary Rodham Clinton,
Secretary of State,
U.S. Department of State,
Washington, DC 20520.

Dear Secretary Clinton: We respectfully request that the State
Department complete its environmental assessment of the impact of the
Keystone XL Pipeline so that the National Determination review period
might commence and a Presidential permit might be approved. Each week
that goes by in the State Department's permitting process of the
Keystone XL, a process that has gone on for more than 2 years, is lost
ground for thousands of workers who are sitting on the sidelines of our
ailing national economy.
All four of our International Unions--the United Association of
Plumbers and Pipefitters, the International Union of Operating
Engineers, the International Brotherhood of Teamsters and the Laborers'
International Union of North America--have executed a project labor
agreement to build the Keystone XL Pipeline. We are committed to making
Keystone XL a reality for our Nation and we are prepared to begin work
as soon as the Presidential permit for the $7 billion privately funded
Keystone XL pipeline is approved.
By facilitating this project, you have the power to pave a path to
better days and raise the standard of living for working men and women
in the construction, manufacturing and transportation industries.
According to the Center for American Progress, 2.1 million construction
workers are out of a job. Early this year, unemployment in the
construction industry actually jumped to 25 percent. The ripple effect
is bleak; segments of the manufacturing industry which produces
building materials are currently operating at half their production
capacity as a result of the steep declines in the construction
industry. According to a recent Federal Reserve projection, the U.S.
economy has been losing momentum since the end of last year.
Approving the Keystone XL Pipeline project will ignite segments of
our ever weak economy. An independent review of the Keystone XL's
potential economic impact finds that during the construction period the
pipeline will stimulate $20 billion in new spending for the U.S.
economy, spur the creation of 118,000 jobs and generate more than $585
million in State and local taxes for the States along the pipeline
route. When Keystone XL is operational, the States along the pipeline
route are expected to receive an additional $5.2 billion in property
taxes during the operating life of the pipeline, according to the
analysis. That kind of renewed, tangible prosperity is the kind of
change the American worker can believe in.
We are aware of the arguments put forward by the opponents of
Keystone XL. Generally, their criticism centers on the belief that
further development of Canada's oil sands puts in jeopardy U.S. efforts
aimed at capping carbon emissions and greenhouse gas. While we clearly
understand that our Federal Government is seeking to develop a balanced
policy to address our Nation's energy and environmental needs and
challenges, efforts to block Keystone XL would undermine rather than
further this goal. Comprehensive energy and environmental policy should
strive to address climate concerns while simultaneously ensuring
adequate supplies of reliable energy and promoting energy independence
and national security. Alternative energy sources are generally still
in developmental stages; therefore it is likely that the U.S. consumer
will remain substantially dependent on carbon fuels for the next
several decades. The Keystone Project, which will greatly promote U.S.
energy independence, will provide secure access to reliable energy for
years to come and strengthen relations with Canada, which is one of the
U.S.'s strongest, strategic allies.
Secretary Clinton, we call on you to approve a Presidential permit
for Keystone XL so that the American worker can get back to the task of
strengthening their families and the communities they live in.
Sincerely,
William P. Hite, General President,
United Association of Journeymen and Apprentices of the
Plumbing and Pipefitting Industry of the U.S. & Canada, AFL-CIO.

Vincent J. Giblin, General President,
International Union of Operating Engineers.

Terence M. O'Sullivan, General President,
Laborers' International Union of North America.

James P. Hoffa, General President,
International Brotherhood of Teamsters.
______

International Union of Operating Engineers (IUOE),
Washington, DC 20036-4707,
November 15, 2011.
The Honorable Hillary Rodham Clinton,
U.S. Department of State,
Washington, DC 20520.

Dear Secretary Clinton: The Administration's decision to require
the analysis of a different route for the Keystone XL pipeline is a
profound disappointment to the International Union of Operating
Engineers. The State Department's unprecedented decision to backtrack
on its own conclusions contained in the Final Environmental Impact
Statement suggests a troubling political calculus, which ignores the
merits of the project.
With the authority to create approximately 20,000 construction and
other jobs with the stroke of a pen, at a time when the unemployment
rate in construction is the highest of any sector, the Administration
missed a major opportunity to employ members of the IUOE and other
unions. Because of the unique authority your Administration possessed
to create jobs almost immediately, without congressional action or a
dime of public investment, this decision will reverberate throughout
the membership of the Operating Engineers.
To make matters worse, the pipeline has been subjected to the most
rigorous environmental analysis of any pipeline in the world,
literally. The conclusions and analysis of the environmental review
simply do not support the Administration's decision. According to the
Final Environmental Impact Statement, the 57 special conditions
developed by the Pipeline and Hazardous Materials Safety Administration
and the Department of State--and voluntarily agreed to by TransCanada--
``. . . would have a degree of safety greater than any typically
constructed domestic oil pipeline system under current regulations.''
There are over 2,000 miles of hazardous materials pipelines
crisscrossing the Ogallala Aquifer today. These hazardous materials
pipelines are not, according to PHMSA, required to meet the same
standards to which Keystone XL, had been subjected. To address the
concerns raised throughout the process, TransCanada agreed to the
Sandhills regional reclamation plan, which establishes special
construction, reclamation, and post-construction procedures
specifically for this area in consultation with local experts and State
agencies.
IUOE members were looking to you for leadership on this project.
You could have put thousands of Operating Engineers, many of whom are
unfortunately on the sidelines of our ailing national economy, back in
the game, giving them the ability to provide for their families, obtain
health care, and pay their mortgages. In February 2010, unemployment in
the construction industry reached over 27 percent. The effects have
been staggering on our members and their families. The timely approval
of this project by your Administration could have been a vital lifeline
for thousands of workers. Now the uncertainty thrust into the
permitting process may mean that the project will not go forward--and
those jobs will not be created.
With the stroke of a pen, your Administration had the ability to
employ thousands of IUOE members. Foregoing that opportunity will have
a devastating impact on the livelihoods of thousands of IUOE members
and their families--many of whom have borne the brunt of the Nation's
dismal economic performance.
It is unfathomable that, nearing the end of a process that has
taken more than 3 years and has already included the rare development
of a supplemental draft environmental impact statement, the
Administration will now inject more uncertainty into the process.
What do we tell these unemployed IUOE, members and other pipeline
construction workers?
Sincerely,
Vincent J. Giblin,
General President.
______

Rocky Mountain Environmental Labor Coalition,
Colorado Springs, CO 80905,
September 6, 2011.
The Honorable Hillary Clinton,
Secretary, U.S. Department of State,
Keystone XL EIS Project,
Washington, DC 20090-6503.
Re: Keystone XL National Interest Determination

Dear Secretary Clinton: On behalf of the Rocky Mountain
Environmental Labor Coalition (RMELC), I am writing to express RMELC's
strong support for the Keystone XL pipeline project and to urge you to
grant the Presidential permit needed for construction of the Keystone
XL pipeline to begin. RMELC firmly believes that the Keystone XL
pipeline project is in our country's national interest because there
are no substantial environmental concerns that should prevent
construction of this critical infrastructure project and this pipeline
project will directly create at least 20,000 high-wattage jobs, spur
significant economic growth, improve our national security and provide
a long-term, stable energy supply to the United States.
Founded approximately 8 years ago, RMELC is a coalition of labor
leaders and environmental organizations dedicated to finding common
ground on environmental and labor issues for construction projects and
to seeking fair and equitable construction projects that are both
environmentally sound and worker friendly, with livable wages and
benefits. Our Board includes members from Environment Colorado, Sierra
Club and Colorado Environmental Coalition, the International
Brotherhood of Electrical Workers, Iron Workers, Laborers International
Union of North America, International Union of Operating Engineers and
the United Association.
RMELC applauds the Department of State's thorough review process,
which has provided significant opportunities for public input.
Moreover, RMELC believes that the Department of State has fully
analyzed the project's environmental impact and the Department's final
Environmental Impact Statement rightfully concludes that there are no
substantial environmental concerns that should prevent construction of
this valuable energy infrastructure project. RMELC also has confidence
that TransCanada will be a good steward of the land and that Keystone
XL will be constructed using industry best practices and will meet or
exceed all existing pipeline regulatory standards.
RMELC also finds that the economic benefits of the privately
funded, shovel-ready Keystone XL pipeline project are substantial and
in America's national interest. With unemployment stubbornly high, this
pipeline is expected to directly create approximately 20,000
manufacturing and construction jobs.
Significantly, the Keystone XL pipeline is the subject of a Project
Labor Agreement with four international unions, ensuring that Keystone
XL will create good jobs with good wages and benefits in the United
States. Moreover, this means the Keystone XL pipeline will be built
with highly trained and capable union workers who will ensure that the
project is implemented with a clear focus on safety, quality and
environmental considerations.
It is also important to note that not only will the Keystone XL
pipeline directly create 20,000 high-wattage jobs, but independent
studies also calculate that the construction of Keystone XL will create
an additional 118,000 indirect and spin-off jobs. Keystone XL is also
projected to generate more than $5.2 billion in tax revenue for the
pipeline's corridor States. At a time when State and local governments
across the country are struggling to balance their budgets, these
employment and revenue benefits cannot be overlooked.
Finally, RMELC also believes that Keystone XL will also strengthen
our national security and provide a long-term, stable supply of energy
to the United States. By providing refineries along the Texas Gulf
Coast with more than 700,000 barrels of oil each day from domestic and
Canadian resources, this pipeline will dramatically reduce our reliance
on oil from unreliable and often unfriendly sources.
RMELC believes that construction of the Keystone XL pipeline is in
the best interest of all Americans, and we respectfully request that
the Department of State expeditiously approve the project and grant
TransCanada the Presidential permit necessary to begin building the
pipeline.
Sincerely,
Rick Allen, President,
Rocky Mountain Environmental Labor Coalition.

[Whereupon, at 11:38 a.m., the hearing was adjourned.]