With a Federal benefits package for the long-term unemployed stalled in Congress, it's time to take a hard look at what's holding the job market back -- and what could help it improve.
There is no denying that our economic recovery is still stuck in first gear. After three months of strong gains, the latest monthly employment report clocked only 74,000 new jobs in December. National unemployment dropped to 6.7 percent, but largely due to a shrinking workforce. And 108.5 million people depend on government benefits -- about seven million more than the number with full-time employment.
As Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, eloquently put it in a recent op-ed, "If the unemployed have a source of income, they are more likely to turn down lower-paying jobs -- even though they are losing job skills by remaining out of the labor force. The longer the unemployed are out of work, the more their skills atrophy."
She points to new data from North Carolina showing that a steep reduction in its unemployment benefits package last year -- from 73 weeks to just 20 -- has contributed to a drop in the unemployment rate from 8.8 to 7.4 percent.
Three decades of experience of helping state and local welfare agencies return the long-term unemployment to work through America Works, a company founded by the lead author, supports this conclusion. Time and again, we've found that a long-term safety net only encourages dependency, while working at a real job -- any job -- boosts confidence and helps people climb out of poverty. That's why we focus on getting recipients into jobs quickly -- and with a minimum of time spent on training.
What's more, our payment is tied to success; we don't receive the full fee until a candidate has secured a job and kept it for at least four months.
This "work-first" approach -- tied to job success -- is an important part of reducing government dependency and getting Americans back to work. America Works has applied this formula to place more than 350,000 low-income people in private sector jobs, with an average starting wage of $10 per hour plus benefits. In our New York program alone, more than half of new employees were still on the job after six months.
Another part of the problem is a disconnect between job-seekers and employers. The U.S. is graduating fewer students with science, technology, engineering and math degrees each year, so the pool of qualified U.S. applicants for high-skilled positions is shrinking. But most open jobs in America are lower-wage, entry-level positions in food, retail, customer service and hospitality, where the typical employment application process is difficult and inefficient. Applicants repeatedly fill out forms that provide a limited picture of the position being sought and the applicant's strengths and weaknesses.
This failure to evolve has real consequences on the economy. Applicants have a much harder time finding jobs that are suitable to their skills. Employers have a much harder time identifying promising prospects. And when the two sides do manage to link up, the process is often mired in costly confusion.
The way forward therefore is to make better use of modern -- and mobile -- technologies that reflect how many, if not most job seekers are communicating and showcasing their personalities in the real world. According to the International Data Corporation, by 2015 more people will access the Internet by a mobile device than a desktop computer or any other wired device. Yet today, only three percent of Fortune 500 companies have a mobile friendly job application.
The two companies we represent are partnering to put all of these ideas into action together. America Works just announced that it will be installing Apploi's advanced mobile- and tablet-based application software in its job centers. By incorporating this sophisticated -- and, importantly, user-friendly -- application technology, we're hoping to smooth the transition from joblessness to gainful employment for hundreds of thousands more Americans across the country.
The fact is government welfare does not have to be a professional death sentence. People that have slipped through the cracks of the American economy can regain their financial autonomy -- and dignity -- through full-time employment. We all have a role to play in making it happen.
Cove is the founder of America Works, the first for-profit welfare-to-work company in America. Lewis is CEO of Apploi, a mobile recruiting application.