Janet Yellen Isn’t Giving Up on the Long-Term Unemployed

A blog about business and economics.
March 31 2014 8:27 PM

Janet Yellen Won’t Give Up on the Long-Term Unemployed

Federal Reserve Board Chair Janet Yellen arrives at a news conference March 19, 2014 at the Federal Reserve Board in Washington, DC.
Yes, that's the Fed chair holding a welding mask.

Photo by Brian Kersey/Getty Images

Can Janet Yellen save America’s long-term unemployed? She's seems to think so.

Today, the Federal Reserve chair used her first public speech since becoming head of the central bank to lay out her argument for keeping interest rates low in order to boost the U.S. economy. Her overarching message was straightforward enough: The recovery stinks. It “still feels like a recession to many Americans,” she said, “and it also looks that way in some economic statistics.”

Here was the real key, though: Yellen argued that there’s still plenty of “slack” left in the labor market, meaning she thinks there are far more Americans sitting around ready and willing to work than there are jobs available. As I wrote not long ago, not everyone agrees. The dissenters say that of the millions of adults who’ve been unemployed for six months or more, the vast majority will probably never work again. Companies aren’t interested in hiring them. Many of these job hunters will give up on their search altogether. And while keeping interest rates low to heat up the economy probably won’t change their fortunes, it might push up wages for those who already have jobs and spark inflation.


Yellen, as she made clear in her speech, believes otherwise: 

[T]he data suggest that the long-term unemployed look basically the same as other unemployed people in terms of their occupations, educational attainment, and other characteristics. And, although they find jobs with lower frequency than the short-term jobless do, the rate at which job seekers are finding jobs has only marginally improved for both groups. That is, we have not yet seen clear indications that the short-term unemployed are finding it increasingly easier to find work relative to the long-term unemployed. This fact gives me hope that a significant share of the long-term unemployed will ultimately benefit from a stronger labor market.

In an ideal world, Congress would take some sort of steps to help the long-term unemployed. With the deadlock in Washington, though, Janet Yellen is all they’ve got.

Jordan Weissmann is Slate's senior business and economics correspondent.



Scalia’s Liberal Streak

The conservative justice’s most brilliant—and surprisingly progressive—moments on the bench.

Colorado Is Ground Zero for the Fight Over Female Voters

There’s a Way to Keep Ex-Cons Out of Prison That Pays for Itself. Why Don’t More States Use It?

The NFL Explains How It Sees “the Role of the Female”

The Music Industry Is Ignoring Some of the Best Black Women Singing R&B


Theo’s Joint and Vanessa’s Whiskey

No sitcom did the “Very Special Episode” as well as The Cosby Show.


The Other Huxtable Effect

Thirty years ago, The Cosby Show gave us one of TV’s great feminists.

Cliff Huxtable Explains the World: Five Lessons From TV’s Greatest Dad

Why Television Needs a New Cosby Show Right Now

  News & Politics
Sept. 18 2014 8:20 PM A Clever Attempt at Explaining Away a Vote Against the Farm Bill
Sept. 18 2014 6:02 PM A Chinese Company Just Announced the Biggest IPO in U.S. History
Sept. 18 2014 3:24 PM Symantec Removes Its “Sexual Orientation” Filter
  Double X
The XX Factor
Sept. 18 2014 3:30 PM How Crisis Pregnancy Centers Trick Women
  Slate Plus
Behind the Scenes
Sept. 18 2014 1:23 PM “It’s Not Every Day That You Can Beat the World Champion” An exclusive interview with chess grandmaster Fabiano Caruana.
Brow Beat
Sept. 18 2014 3:04 PM Pogo Returns With Another Utterly Catchy Disney Remix
Future Tense
Sept. 18 2014 6:48 PM By 2100 the World's Population Could Be 11 Billion
  Health & Science
Sept. 18 2014 3:35 PM Do People Still Die of Rabies? And how do you know if an animal is rabid?
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.