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The Future of Long-Term Unemployment – U.S. Congressional Testimony

May 4th, 2010

Columbia University economics professor Till von Wachter – who was an invaluable resource for me during the writing of SPARK – testified before the  Joint Economic Committee  of the U.S. Congress last week about the impact of the recession on American workers.

Till gave the Committee an in-depth analysis of the substantial and long-lasting effects of layoffs on workers and their families, arguing that while there are “cost-effective policies” to get the unemployed back into the labor market, finding ways to reduce their significant earnings losses over the long-term represents a much bigger challenge – and as a result, the greatest priority (for policymakers as well as employers) is to develop “preventative measures to avoid large-scale layoffs in future recessions.”

One of those preventative measures – admittedly not possible in every situation – is for more employers to finally stop repeating their all-too-often-ignored platitudes that “our employees are our most important asset” – until a recession hits and reaching for the layoff-lever just seems so easy.  Companies such as Lincoln Electric actually find that in those unavoidable tough times, keeping people at work generates a powerful competitive advantage.

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