Federal Reserve Chairman Ben Bernanke says long-term unemployment is the biggest concern that keeps him up at night.
Bernanke recently sat for an interview with ABC’s Diane Sawyer to talk about the economy and pointed to the 40 percent of the unemployed who have been out of work for more than six months.
“Those people are obviously facing a lot of hardship,” he said, according to a transcription at Business Insider. “Their skills could be eroding. They may never be able to get back into the labor force at the same earnings level or same occupation that they had when they lost their jobs.”
Leilani Doyle, vice president of marketing and product management at US Dataworks, says getting more of the chronically unemployed back in the workforce would have a major impact on the economy.
But the key is that we’re not going back to business as usual, she notes. The economic landscape has changed.
“The unemployed will have to be creative when it comes to finding or creating a job,” Doyle says.
Bernanke also said that the Fed would impose more regulations on banks, especially in terms of ensuring that banks make loans to good borrowers.
To that, Doyle says it’s equally important to make clear regulations that deal with the way banks try to mitigate risks by packaging loans into derivative types of financial statements so the type of security being purchased is unknown.
“That’s key [because] then the banks and their funders are at least aware of the risk portfolio they are buying,” she says.