Getting Workers Back To Work: Now

(The American Institute for Full Employment is urging state governments to sharpen work search assistance and requirements to get workers back to work faster—and get ahead of the next economic downturn. Is anyone listening?)

The American Institute for Full Employment (AIFE) is a spirited and independent applied research center (“action tank”), based in Southern Oregon. It is centered on a single concept: employment is central to the economic, social, mental and family well-being of Americans.

While some policy groups are championing guaranteed income schemes and welfare state expansions, AIFE is focused on work. And it has a message for policymakers today: it is time to implement far stronger strategies to hasten the return to work of the millions of workers who are still unemployed and/or outside of the labor market.

John Courtney, the longtime AIFE President, points out that yesterday’s job openings report shows the number of job openings reaching an all-time high in March at 11.5 million—providing also an all-time high 1.9 jobs per job seeker. Despite these historically favorable numbers, nearly 1.5 million job seekers in March had been unemployed 27 weeks or more—still up 25% from the pre-pandemic level— and the average time unemployed remained high at 24.2 weeks. Additionally, large numbers of workers in March remained outside of the labor force, which stood at an estimated 4 million workers below pre-pandemic numbers.

The urgency to get workers back arises in part from basic services going unfilled. Here in California, as elsewhere, group homes for the disabled are closing or reducing their capacity as they can’t find staff, and long-term care facilities for the elderly are limiting the number of residents. Trucking companies cannot grow or even serve current clients as there is a shortage of truckers. Home and commercial craft businesses cannot find plumbers, electricians and other tradespersons. And these examples are only the start of the lengthy shortages list.

Though the tight labor market had the positive impact in 2021 of raising wages in many of these non-laptop economy jobs, the increases have not been enough to meet staffing needs. “Even though we offer job training that is free of charge and tied to jobs, we can’t find enough applicants today,” is the common refrain of job training groups throughout California and other states.

Beyond filling social needs, return to work is rooted in values to the workers. “We believe work is an essential component for fulfillment in the life of every person,” says Courtney, who cites a long list of studies, including a compilation by the Urban Institute, regarding the positive impacts of employment in combatting depression, reducing substance abuse, and increasing social engagement as well as meeting the economic necessities.

Courtney, of course, is not alone in his emphasis on work. His message bears similarity to the message of several recent books, including Nicholas Eberstadt’s Men Without Work and Oren Cass’ The Once and Future Worker, that argue America has drifted too far from work values. What differentiates Courtney and AIFE from other policy entrepreneurs is how they develop their employment strategies through staff who’ve operated public and private reemployment programs, and through daily interactions with job seekers and employers. For example, AIFE is linked to a spin-off social venture, NextJob, an outplacement and career development firm. NextJob taps a nationwide network of job coaches, who provide regular feedback on job search strategies.

Drawing on this feedback, AIFE’s return to work recommendations are a mix of equipping unemployment insurance (UI) claimants with more effective education, tools and coaching, and motivation through verification of efforts and accountability. Regarding accountability, Courtney notes, “It’s hard to help people when you can’t engage them. Without requirements, too few workers are aware of or use the valuable reemployment resources that states offer.” Chief among AIFE’s engagement and empowerment strategies today:

1. Engage UI claimants as soon as they file: Even a well-structured job search can take two to three months or more. But the first week or two is a critical time to engage workers in the process, including developing and posting a competent resume where employers can see it, identifying target employers, and starting to network online and in person. Courtney notes that more than twice as many workers apply for UI as typically receive it, and eligibility determination can take two weeks. States that begin robust work search activities in these first two weeks not only help eligible claimants get a strong start, but also guide into work search mode the claimants who are subsequently deemed ineligible. By sharpening work search requirements and injecting them early in the process, UI agencies engage one of the largest captive audiences of unemployed workers that exists in the economy.

2. Online services connected with job search specialists: In the past few years, online job search techniques have improved in their targeting and sophistication. Still, an important element for struggling job seekers is contact with a job search specialist who can provide encouragement and motivation and troubleshoot challenges such as multiple applications without an interview or multiple interviews without an offer. States have a relatively new and growing funding source for this one-on-one counseling activity via the federal Reemployment Services and Eligibility Assessments program (RESEA).

Leading states have been implementing second RESEA check-in meetings, and some are combining the touches with weekly work search requirements. The result is a steady continuum of light, yet proactive, engagement that can help workers who are often discouraged and reluctant to reach out for help.

3. Verification of work search efforts: In many states, the weekly UI work search requirement is a loose one, primarily requiring workers only to self-certify that they looked for work, and provide a list of a few employers they contacted. Courtney counters that for work search to have any impact, the activities must be varied, valuable and they must be verifiable.

Easily-verifiable and beneficial activities include completing online job search learning modules and using job search tools such as resume builders, job boards, mock interview tools, skills assessments, elevator pitch tools and personality assessments. System data can populate UI systems set to continue benefits for those who are engaged and completing minimum weekly activities. Eventually the same data can indicate which combination of strategies tends to work for various job seekers.

4. Return to work bonuses: Higher federal unemployment benefits and other pandemic subsidies increased the safety net, but served as disincentives to return to work (even for months after they ended). AIFE now sees promise in hastening return-to-work through a different type of government payment: the return-to-work bonus. Several states began experimenting with bonus programs in 2021, including Colorado’s Jumpstart bonus, and New Jersey’s “Return & Earn”. Courtney notes: “These pay-for-work bonuses help neutralize the disincentive that pandemic payments had and, unlike employer wage increases, these bonuses don’t last — which adds a greater sense of urgency.”

AIFE believes in the power of states as policy laboratories. In the past decade it has given its Full Employment Award to a number of states, including Utah, Wisconsin, and Nebraska for their approaches to reemployment, mixing job search skills-building and verifiable job search activities.

***

The urgency of getting workers back can be tied to an additional factor: the growing threat of stagflation, the condition of high inflation and high unemployment that America experienced in the 1970s. Economists and economic forecasters may be mixed today in their assessments of this threat. However, there is no question that on an individual level, any worker will be much better off getting a job now than waiting until unemployment potentially climbs and job competition mounts. On a collective level, filling job openings more rapidly offers some chance of dampening inflationary pressures. It ensures that in any next economic downturn, fewer workers will be left on the sidelines.