One of the top priorities for President-elect Joe Biden will be to rebuild America's battered workforce and kick-start business growth.
The labor market still faces a deficit of more than 10 million jobs, with more disappearing permanently. The number of unemployed Americans who have been jobless for more than 26 weeks jumped to 3.6 million in October from 2.4 million the month before, or one-third of all unemployed workers.
"The longer you're unemployed, the less likely you're going to find a job — and the longer you're unemployed, you might just drop out of the job market altogether," said Liz Ann Sonders, senior vice president and chief investment strategist at Charles Schwab.
The median duration of unemployment has climbed to 19.3 weeks, more than double what it was a year ago.
Yet the U.S. does not have the tools to realign workers and their skill sets to the new realities of the labor market.
"The labor market won't be recovered for years," said Ryan Sweet, senior director of economic research at Moody's. "We still have a significant hole to dig ourselves out of."
Reorienting the skill sets of potentially thousands of workers will be a tremendous undertaking. The Biden campaign has proposed providing two years of community college or equivalent training to all Americans, along with a $50 billion investment in workforce training through community college partnerships and free four-year tuition for students with family incomes below $125,000.
Biden also inherits the biggest crisis in a generation, the coronavirus pandemic, with infection rates that are on the rise — which flashes danger signals for the consumer-driven economy, because businesses will struggle to stay open if customers are concerned about catching the virus.
"Whether or not new case clusters result in lockdowns, the coronavirus still hurts both employers and job seekers," said AnnElizabeth Konkel, an economist at the hiring services company Indeed.
"A surge in the virus also dampens job-seeker interest in opportunities that aren't remote. Getting the virus under control is the only path to a full economic recovery," Konkel said.
All of that means "stimulating the economy to create jobs is crucial," said Heidi Shierholz, senior economist and director of policy at the nonprofit Economic Policy Institute. "Extending the unemployment insurance provisions of the CARES Act and providing fiscal aid to state and local governments could alone create or save millions of jobs over the next year."
