Bloomberg News

CEOs Pledge Help to White House for Long-Term Unemployed

January 31, 2014

President Barack Obama and Vice President Joe Biden

U.S. President Barack Obama signs a memorandum as U.S. Vice President Joe Biden watches during an event outlining new efforts to help the long-term unemployed at the White House in Washington, D.C. on Jan. 31, 2014. Photographer: Joshua Roberts/Bloomberg

President Barack Obama met today with chief executive officers of companies from (BAC:US)Bank of America Corp. (BAC:US) to EBay Inc. who have committed to giving the long-term unemployed a better chance in the hiring process.

More than 300 companies, including retail giant Wal-Mart Stores Inc. and automaker Ford Motor Co., have signed a pledge to develop initiatives for hiring and recruiting job-seekers who have been out of work for an extended period, according to the White House.

Twenty-three corporate or small business leaders joined Obama and Vice President Joe Biden to discuss better job training and helping people who have been jobless for years to re-enter the workforce. Among today’s participants were Bank of America’s Brian Moynihan, EBay’s John Donahoe, Boeing Co. CEO James McNerney, James Gorman, CEO of Morgan Stanley (MS:US), and Arne Sorenson, CEO of Marriott International Inc.

“Folks who’ve been unemployed the longest often have the toughest time getting back to work,” Obama said in remarks to the group in the East Room of the White House. “It’s a cruel Catch-22: The longer you’re unemployed, the more unemployable you may seem.”

The president also signed an order directing federal agencies to end hiring practices that put the long-term unemployed at a disadvantage.

Federal Grants

As part of the administration’s program, the Labor Department will distribute $150 million in grants to organizations that help the long-term unemployed find jobs.

The hiring initiative was announced in Obama’s Jan. 28 State of the Union address, in which he said Biden will lead a review of federal job-training programs to ensure the skills they teach meet the demand of employers. He said he’s also setting aside $500 million for community colleges to create job-driven training partnerships with employers and industry.

The White House released a 31-page report on the “Negative Cycle of Long-Term Unemployment” that portrayed the plight of the jobless as “the worst legacy of the Great Recession.”

While the national unemployment rate has declined to 6.7 percent, long-term unemployed individuals make up 37.7 percent of the jobless, according to the report. That’s down from 46 percent in 2010 yet remains higher than the pre-recession peak of 26 percent in 1983. As of December 2013, there were 3.9 million long-term jobless Americans, or those without work for more than 27 weeks. There were 2.6 million looking for jobs for a year or more, the report said.

‘Chicagoland’s Future’

The report cited some examples of programs aiding the long-term unemployed, including “Skills for Chicagoland’s Future,” an agreement with employers to help in job placement. Since 2012, the program has placed more than 600 unemployed in jobs; more than 70 percent of them were long-term unemployed.

Companies have committed to “best practices” to reduce the number of long-term unemployed. Those principles include ensuring that job advertisements don’t discriminate and that screening doesn’t disadvantage people because they’ve been out of the workforce for a lengthy period.

Other practices include reviewing recruiting programs so they cast a wide net to improve job prospects, and sharing ideas between companies and within organizations.

“We are trying to address what we feel is the heart of the negative cycle, which is the potential stigmatization of people merely for the sake that they are long-term unemployed,” Gene Sperling, director of the White House National Economic Council, said in a conference call yesterday.

Fake Resumes

Sperling cited a 2013 study by researchers at the University of Chicago, the University of Toronto and McGill University in Canada who submitted 12,000 fake resumes to online job postings that were identical except for the duration of unemployment. Candidates unemployed for one month had a 45 percent better chance of receiving an interview than those without jobs for eight months, the study found.

As part of his vow to bypass a politically divided Congress to advance his economic agenda, Obama is combining executive actions with attempts to enlist the aid of U.S. companies to meet his goals. He has a separate effort with Microsoft Corp. (MSFT:US), Sprint Corp., Verizon Communications Inc. and other companies to help bring broadband and wireless technology to more public schools to better prepare students for college or the workplace.

Obama’s Travels

During the past two days, Obama has traveled to four states to promote the proposals he outlined in his State of the Union address. He was in Waukesha, Wisconsin, yesterday, where he used the backdrop of a General Electric Co. plant to highlight the need for better job training, and in Nashville, Tennessee, to talk about education.

House Speaker John Boehner and the three other Republican leaders of the chamber sent Obama a letter yesterday urging him to press for action in the Democratic-controlled Senate on their job-training legislation.

The other business leaders who attended today’s event, according to the White House:

Patrick Beharelle, CEO, Seaton Corp.; Jorge Benitez, U.S. chief executive and managing director of North America, Accenture Plc; Greg Brown, CEO, Motorola Solutions Inc.; Richard Davis, CEO, U.S. Bancorp; Joe Echevarria, CEO, Deloitte LLP; Larry Fink, CEO, BlackRock Inc.

Mike Lawrie, CEO, Computer Sciences Corp.; Steve Mollenkopf, chief executive-elect, Qualcomm Inc.; Michael Suess, chief executive of energy and managing board member, Siemens AG.

Also Don Thompson, CEO, McDonald’s Corp.; John Veihmeyer, CEO, KPMG LLP; Frederick Waddell, chief executive, Northern Trust Corp.; Greg Wasson, chief executive of Walgreen Co.; Bill Whitmore, CEO, AlliedBarton Security Services LLC; Maggie Wilderotter, chief executive officer, Frontier Communications Corp.; Larry Zimpleman, chief executive, Principal Financial Group Inc.; Michael Tamasi, chief executive, AccuRounds and Anne Zimmerman, president, Zimmerman and Company CPA’s Inc.

To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net; Mike Dorning in Washington at mdorning@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net


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Companies Mentioned

  • BAC
    (Bank of America Corp)
    • $15.59 USD
    • -0.03
    • -0.19%
  • MS
    (Morgan Stanley)
    • $33.24 USD
    • -0.16
    • -0.48%
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