Unemployment trends continue to confound the economy two years after the Great Recession and related financial crisis of 2007 to 2009. As a result, the Federal Reserve Bank of Kansas City is joining with other Reserve Banks to find ways to facilitate more workforce training programs.
Complementing the many workforce development activities being planned this year by Federal Reserve Banks across the nation is the National Conference on Workforce Development to be hosted by the Kansas City Fed, in partnership with the Atlanta Fed, on Sept. 19 and 20, 2012.
The long-term unemployment rate, which counts people out of work for more than six months, is at an unparalleled high. The number of people out of work for more than a year – the long-long-term unemployed – represents nearly a third of the nation’s unemployed. Minorities have suffered even more. Unemployment rates for African-Americans and Hispanics have almost doubled since the start of the recession, compared to whites. Almost one third of young, African-American males were unemployed in 2010.
Age matters as well. As long-term unemployment contributes to a greater portion of total unemployment at each age group, older workers are less likely than younger workers to quickly find another job.
Recession-related unemployment has long-term consequences. Steve Davis, of the Chicago Booth School of Business, and Til von Wachter, of Columbia University, estimate in the latest edition of the Brookings Papers on Economic Activity, published by the Brookings Institution, that not only do workers lose significant income in the year they lose their jobs, but their expected future income is significantly lowered as well. Such realities increase anxieties and affect the productivity of workers left behind on the job, adding to the negative impact on the economy.
The Federal Reserve Bank of Kansas City is working with its sister banks across the country to better understand these dynamics in order to inform program and policy responses. In recent months, the Kansas City Fed has held focus group discussions in Oklahoma City and Albuquerque with local banking partners and workforce development professionals to identify opportunities for financial institutions to support employment programs. Connections were forged around shared interests of workforce programs and community reinvestment goals of banks.
In coming months, the Kansas City Fed will bring together workforce, education, business and philanthropic leaders in Denver, Kansas City and Omaha to further explore local responses to the need for workforce training. Other Federal Reserve Banks are conducting related events in their regions with a wide range of stakeholders and industry sectors.
More information is available online at the Federal Reserve Human Capital Compendium.
By Steve Shepelwich, Senior Community Development Advisor, Kansas City Federal Reserve