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.

Jordan Weissmann Jordan Weissmann

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

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.



The Irritating Confidante

John Dickerson on Ben Bradlee’s fascinating relationship with John F. Kennedy.

My Father Invented Social Networking at a Girls’ Reform School in the 1930s

Renée Zellweger’s New Face Is Too Real

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

The All The President’s Men Scene That Captured Ben Bradlee

Medical Examiner

Is It Better to Be a Hero Like Batman?

Or an altruist like Bruce Wayne?


Driving in Circles

The autonomous Google car may never actually happen.

The World’s Human Rights Violators Are Signatories to the World’s Human Rights Treaties

How Punctual Are Germans?

  News & Politics
Oct. 22 2014 12:44 AM We Need More Ben Bradlees His relationship with John F. Kennedy shows what’s missing from today’s Washington journalism.
Oct. 21 2014 5:57 PM Soda and Fries Have Lost Their Charm for Both Consumers and Investors
The Vault
Oct. 21 2014 2:23 PM A Data-Packed Map of American Immigration in 1903
  Double X
The XX Factor
Oct. 21 2014 3:03 PM Renée Zellweger’s New Face Is Too Real
  Slate Plus
Oct. 22 2014 6:00 AM Why It’s OK to Ask People What They Do David Plotz talks to two junior staffers about the lessons of Working.
Brow Beat
Oct. 21 2014 9:42 PM The All The President’s Men Scene That Perfectly Captured Ben Bradlee’s Genius
Oct. 22 2014 8:13 AM Good Teaching Is Not About Playing It Safe Classroom technology can make learning more dangerous, and that’s a good thing.
  Health & Science
Bad Astronomy
Oct. 22 2014 7:30 AM An Illusion That Makes Me Happy and Sad
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.