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Help wanted: Obama calls on CEOs to help fix jobless problem

Help wanted: Obama calls on CEOs to help fix jobless problem

JOBS: U.S. President Barack Obama smiles before he addresses employees of General Electric's Waukesha Gas Engines facility in Waukesha, Wisconsin, Jan. 30. Photo: Reuters/Larry Downing

By Roberta Rampton

WASHINGTON (Reuters) – President Barack Obama will meet on Friday with a group of chief executive officers who have agreed to make sure their companies do not rule out hiring people just because their resumes show they have been out of work for a while.

More than 300 companies have agreed to a one-page list of “best practices” for recruiting and hiring people from the ranks of the long-term unemployed – a group that has struggled to find work in spite of an otherwise improved economy.

“It’s saying that those who are long-term unemployed should get a fair shot,” said Gene Sperling, Obama’s top economic advisor.

The U.S. jobless rate has remained stubbornly high at 6.7 percent, but Sperling told reporters the rate would be closer to 5 percent were it not for the roadblocks to finding work for those unemployed for six months or more.

“We are trying to address what we feel is the heart of that negative cycle, which is the potential stigmatization of people merely for the sake that they are long-term unemployed,” said Sperling, director of the National Economic Council.

The meeting is part of Obama’s pledge to do what he can on the economy despite a reluctance by Republicans in Congress to agree with other parts of his plan.

Obama has tried, but so far failed, to convince Congress to extend jobless benefits for people who have been unsuccessfully seeking work for more than six months.

Benefits for 1.6 million Americans have expired since the end of 2013, numbers that could swell to 4.9 million people by the end of 2014 unless legislation is passed.

DEMORALIZING

A study published this year by researchers from the University of Toronto, McGill University and the University of Chicago helped convince the White House to act.

The researchers used 12,000 fictitious resumes to respond to real job openings in 100 cities. Some of the invented candidates had been “unemployed” for only a short period, while others had been out of work for months – but their work experience, education and demographics were otherwise identical.

Applicants who had been out of work for eight months had 45 percent fewer callbacks from employers: “fairly decisive evidence that merely the status of being long-term unemployed serves as a disadvantage,” Sperling said.

A second study from the Massachusetts Institute of Technology found that someone unemployed for one month will get one interview on average for every 10 job applications, while someone out of work for seven months has to send 35 resumes to get just one interview.

“It’s very demoralizing to send out hundreds of resumes and not get an interview,” Sperling said.

Sperling began talking to business leaders in May about the issues and he and Obama adviser Valerie Jarrett began approaching businesses directly in the fall about committing to review screens used to sort resumes, and other hiring practices that shut out the long-term unemployed.

More than 80 of the largest U.S. businesses signed on, including companies such as Apple Inc, Wal-Mart Stores Inc, Ford Motor Co, General Motors Co, Proctor & Gamble Co, JPMorgan Chase & Co and AT&T.

Even media mogul Rupert Murdoch signed up his companies, News Corp and Twenty-First Century Fox Inc, after Sperling pitched him the concept.

“He responded directly by email to say he thought this was a strong idea,” Sperling said.

Obama on Friday will issue a presidential memorandum to ensure the federal government adopts the same “best practices” in its recruitment

He also will announce $150 million in grants for public-private programs that help match the long-term unemployed with local employers.

Will the pledges work? The White House said it did not have a projection of how many people from the ranks of the unemployment might be able to land an interview because of the changes.

“I can’t give you an exact number,” Sperling said.

“But these are companies that employ millions and millions and millions of people, and are going to be hiring more people, and I think this is going to have a significant impact.”

(Editing by Lisa Shumaker)

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