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Davis Opening Statement: Hearing on Reforms to Help Unemployed People Return to Work

February 10, 2011

Today’s hearing is about how we can better help unemployed workers return to work.  Clearly we have our work cut out for us.

As this chart shows, our Democrat colleagues’ 2009 stimulus plan promised to drive unemployment under 7 percent by now.  Instead, unemployment has now remained at or above 9 percent for a record 21 months.  Stimulus advocates also promised 137.5 million jobs by now; instead they delivered 7 million fewer.
That has left almost 14 million workers unemployed, plus record numbers on the sideline of our economy.  A full 6.2 million are long-term unemployed, and the average duration of unemployment is a record 37 weeks.  That’s almost double the record level before this recession.

To help the unemployed re-connect with work, our nation operates “employment security” programs like unemployment insurance and employment security offices where laid off workers go to connect with new jobs. Last year we spent a stunning $165 billion on those benefits and services.
But judging by the staggering figures I just mentioned, those benefits and services are not succeeding in reconnecting unemployed people with jobs.  We need to ask why. 

We know that every year, according to the Department of Labor, some 50 million people get hired into new jobs.  So someone is finding work.  But what this chart shows is the how the unemployed have increasingly been left behind:
The red line shows the share of the unemployed who stay unemployed.   That has risen to all time highs.  The blue line shows the share of the unemployed who returned to work.  That “success” rate has fallen to record lows.  In fact, this is the only recession in 20 years when the unemployed are more likely to drop out of the workforce than to find a job. 
This tells us our employment security programs are simply not working as intended.  Instead of helping the unemployed become one of the 50 million new hires every year, the unemployed increasingly are being left behind.  Today’s hearing is on what we can do to turn that around.

Vice President Biden recently said that the unemployed should just “hang in there” and wait until jobs return.  But at the current pace, it could be 2020 before the U.S. returns to full employment.  That’s a long time to “hang in there.”

Fortunately, we don’t have to wait that long to hear some good ideas about how to better help the unemployed.  Joining us is a distinguished panel of experts to review what can be done – and in some States is being done – to help unemployed workers find and take new jobs. 

As we will hear, those policies range from promoting more job search, to better engaging people who need extra training, to simply focusing current benefits on places where the need is greatest.  We also need to remember unemployment benefits are not free, and are supported by payroll taxes that are already going up dramatically.  Improving our success in helping more unemployed people find jobs will help keep future job-destroying tax hikes to a minimum.  That is a key goal, too.
We look forward to all of our witnesses’ testimony.