Building on their efforts to assist our nation's long-term unemployed, U.S. Rep. Bill Pascrell, Jr. (D-NJ-09) was joined by Reps. Jon Runyan (R-NJ), Alan Lowenthal (D-CA) and Tom Reed (R-NY) in introducing legislation that would incentivize businesses to hire qualified individuals that have been out of work for 27 weeks of more. The bill, H.R. 3726, the Long-term Unemployed Hiring Incentive Act, would extend the successful Work Opportunity Tax Credit program to allow companies that hire long-term unemployed individuals to be eligible for a tax credit of up to $2400. This effort comes as Extended Unemployment Benefits are set to expire on December 28th for approximately 1.3 million Americans, and an additional 3.6 million people - 260,100 in New Jersey -- will lose access to benefits beyond 26 weeks by the end of 2014.
"Although we have seen a decrease in the unemployment rate in our country, there are too many folks that continue to slip through the cracks," said Rep. Pascrell. "The fact is the rate of long-term unemployment has remained largely stagnant, even as our economy continues to climb out of the worst recession in decades. We simply can't stand by idly and allow this stigma to prevent folks from providing for their families. Offering employers an incentive to hire the long-term unemployed is a big step forward in breaking this cycle, in addition to extending unemployment benefits. I'll continue to fight to alleviate the devastating impact long-term employment has on families across our country."
"Although the economy is showing signs of improvement in some parts of the country, millions of Americans who are eager to get to work are still having difficulty finding jobs. With unemployment benefits set to expire on December 28th, these Americans will lose access to the benefits they need to make ends meet. That is why I am pleased to join Congressman Pascrell in this bipartisan effort to encourage employers to hire workers who have been unemployed for more than 27 weeks," said Rep. Jon Runyan.
"Incentivizing American small businesses to hire the long-term unemployed is an investment worth making. Not only is this a good investment, but this is a common sense, bipartisan jobs bill," said Rep. Alan Lowenthal.
"Finding a job can be difficult enough, even without the stigma of being out of work for a long period of time. This bill will help those unemployed long-term find jobs and give employers an added incentive to hire these prospective employees. We want to get individuals back on their own two feet and "teach them to fish' rather than "hand them a fish' so they can support their families. Creating a fair environment for these individuals to get a job and support themselves takes a step in the right direction to break the cycle of long-term unemployment and will save taxpayer dollars in the long run," said Rep. Tom Reed.
The Long-Term Unemployed Hiring Incentive Act extends the Work Opportunity Tax Credit (WOTC) program to cover qualified long-term unemployed individuals. WOTC provides businesses who hire certain qualified individuals a general business tax credit equal to 40% of the first $6000 of their first years' salary, meaning the maximum credit a business can claim per employee is $2400.
H.R. 3726 defines "long-term unemployed" as an individual who has exhausted their regular unemployment compensation (the first 26 weeks of unemployment benefits, or slightly over six months) since the crisis began in 2007. Although the unemployment rate has fallen to seven percent in November of 2013, the lowest rate measured by the Bureau of Labor Statistics since 2008, the unemployment rate for those out of work for 27 weeks or more remained unchanged from the previous month.
About 4.1 million Americans fall into this category of "long-term unemployed", or about 2.6 percent of the labor force. While this has fallen from a high of four percent at the height of the recession, the current long-term unemployment rate of 2.6 percent equals the highest rate on record prior to the current crisis.
The Federal Reserve Bank of Boston recently published research showing that job applications from those out of work for more than six months receive far fewer call backs from prospective employers. In fact, the study found that those out of work for six months or longer received fewer call backs for a job in the same industry they were previously employed than someone with no experience in that industry but who had only been out of work for a short period of time.
The National Employment Opportunity Network, a non-profit dedicated to supporting cost effective government incentives to encourage employers to hire from groups that for historical and structural reasons have had difficulty finding and retaining jobs, drafted a letter in support of H.R. 3726.