Biden inherits struggling economy with 10 million still unemployed

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One of President-elect Joe Biden’s top priorities will be to rebuild America’s battered workforce and jumpstart business growth.

The labor market still faces a deficit of over 10 million jobs, more of which are permanently disappearing. The number of unemployed Americans who have been out of work for more than 26 weeks rose to 3.6 million in October, from 2.4 million the previous month, or one-third of all unemployed.

“The longer you are unemployed, the less likely you are to find a job – and the longer you stay unemployed, you risk leaving the job market entirely,” said Liz Ann Sonders, Senior Vice President and Chief . investment strategist at Charles Schwab.

The median duration of unemployment climbed to 19.3 weeks, more than double what it was a year ago.

Yet the United States lacks the tools to realign workers and their skills to the new realities of the labor market.

“The job market will not be restored for years,” said Ryan Sweet, senior director of economic research at Moody’s. “We still have a big hole to dig. “

Reorienting the skills of potentially thousands of workers will be a tremendous undertaking. The Biden campaign proposed to provide two years of community college or equivalent training for all Americans, as well as a $ 50 billion investment in workforce training through partnerships with community colleges and four-year free tuition for students with a family income of less than $ 125,000.

Biden is also inheriting the biggest crisis in a generation, the coronavirus pandemic, with infection rates on the rise – flashing danger signals for the consumer-driven economy as businesses will struggle to stay open if customers are concerned about catching the virus.

“Whether or not new clusters of cases result in lockdowns, the coronavirus still hurts employers and job seekers,” said AnnElizabeth Konkel, an economist at the recruitment services company Indeed.

“An outbreak of the virus is also dampening the interest of job seekers in opportunities that are not far off. Getting the virus under control is the only path to full economic recovery, ”Konkel said.

All of this means that “stimulating the economy to create jobs is crucial,” said Heidi Shierholz, senior economist and director of policy at the nonprofit Institute for Economic Policy. “Extending the unemployment insurance provisions of the CARES Act and providing tax assistance to state and local governments alone could create or save millions of jobs over the next year.

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