President Barack Obama today will order federal agencies to end hiring practices that put the long-term unemployed at a disadvantage and announce commitments to do the same from more than 300 companies including Wal-Mart Stores Inc. (WMT), Apple Inc. (AAPL) and Ford Motor Co. (F)
Obama is convening a meeting of company chief executive officers at the White House today to advance a program to address long-term unemployment that he laid out in his State of the Union address earlier this week.
The administration and the companies will "establish best practices" so that they don't "screen people out of the hiring process just because they've been out of work for a long time," Obama said in an interview yesterday with CNN.
While the national unemployment rate has declined to 6.7 percent, almost 4 million people have been out of work for more than six months, three times the pre-recession average.
Gene Sperling, director of the White House National Economic Council, predicted that the executive order and corporate commitments would make "a big difference" in improving job prospects for people who have been out of work for an extended period.
"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," Sperling said in a conference call yesterday.
Unemployment Study
Sperling cited a 2013 study by researchers at the University of Chicago, 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 unemployed 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 companies including Microsoft Corp. (MSFT), Sprint Corp. and Verizon Communications Inc. (VZ) to help bring broadband and wireless technology to more public schools.
Since September, Sperling said he and Obama senior adviser Valerie Jarrett have personally been recruiting executives to join in the commitment, sometimes making the request while the executives were at the White House for meetings. Obama himself also has "talked generally" with CEOs in meetings to seek their participation, he said.
Biggest Companies
Twenty-one of the nation's 50 largest companies committed to participate, including AT&T Inc. (T), CVS Caremark Corp., JPMorgan Chase & Co. (JPM) and The Kroger Co., Sperling said.
The companies promised to ensure that advertising doesn't discourage or discriminate against unemployed people and that screening and hiring procedures don't disadvantage applicants based solely on unemployment status, according to a fact sheet distributed by the White House. The fact sheet didn't identify the executives set to attend today's meeting.
Obama also will announce $150 million in federal grants to organizations that assist the long-term unemployed in finding jobs, Sperling said.
During the past two days, Obama has traveled to four states to promote the proposals he outlined in his State of the Union address earlier in the week. He was in to Waukesha, Wisconsin, yesterday where he used the backdrop of a General Electric Co. (GE) plant to highlight the need for better job training, and to Nashville, Tennessee, to talk about education.
Economic Growth
Obama spoke hours after the Commerce Department reported that the world's largest economy expanded at a 3.2 percent pace in the fourth quarter, following a 4.1 percent advance in the previous three months. He said the economy's growth, while a positive sign that the recovery is accelerating, hasn't been evenly distributed.
"Most folks' wages haven't gone up in over a decade," Obama said in front of a crowd of GE employees and local and state officials. There are "too many Americans working harder than ever just to get by."
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 letter cited a bill passed by the House in March, "which would consolidate the myriad of federal job training programs to focus resources on the programs that work, more closely link employment training to available jobs."
To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Roger Runningen in Nashville, Tennessee at rrunningen@bloomberg.net
To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net
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