America's Jobs Challenges and the Continuing Role of the U.S. Department of Labor

The Great Recession and its aftermath have been a particularly trying period for American workers and their families. In 2008 and 2009 employment collapsed in the wake of the financial crisis. From 2007 to 2009, the unemployment rate more than doubled and peaked at 10.0% in October 2009. More than four years into an economic recovery, the unemployment rate remains abnormally high and longterm joblessness a major problem. The employment crisis has exacerbated longer term U.S. labor market trends of rising inequality, tepid real wage growth for most workers, and a decline in middlewage jobs. In the adverse economic climate that has resulted America faces four major jobs challenges that highlight the continuing integral role of the U.S. Department of Labor (DOL) in supporting the American workforce on the one hundredth anniversary of DOL’s establishment. The first jobs challenge is the need for stronger macroeconomic performance with more rapid economic growth and employment expansion to alleviate the high cyclical unemployment and longterm joblessness that continues as of 2013. The second is to combat the persistent social and economic costs of high rates of job loss and longterm unemployment for experienced workers (Davis and von Wachter 2011) and the potentially permanent adverse impacts on young workers of starting careers in a weak labor market with lowrates of “churn” and limited upward mobility options (Kahn 2010; Lazear and Spletzer 2012). This second challenge will be made easier but will still remain, even in the presence of a stronger macroeconomic recovery. The third challenge is to address longer term secular trends of rising labor market inequality, growing educational wage gaps, and labor market polarization in the face of