Nancy Spivey, Northern Kentucky Chamber of Commerce chief operating officer, asked why so many of those laid off during the recent recession are not able to return to the labor force. According to the professor, many “are going to be hard to re-employ because they have antiquated skills.”
Hicks said most employers today tend to hire persons who already have jobs. They are more attractive and less risky because employers basically already have screened them.
Persons now jobless might have to settle for work that pays less. Those who used to make “$22 are now facing $10 an hour and that’s really tough,” he noted.
Jan Holm, Batesville, asked about the Federal Reserve System’s quantitative easing tactics, which grow the U.S. money supply to keep interest rates low. Hicks said Janet Yellen, an American economist and professor who is the Federal Reserve System Board of Governors vice chair and poised to become chairman in January, “has Nobel quality research under her belt. Her challenge is to communicate the decision the Federal Reserve has already told us ... ‘When our forecast model is met by the economy, we will stop stimulating the economy.’”
He added, “Many economists believe, and I’m among them, the very high stock market prices are contingent upon the Federal Reserve pumping money into the system.” Earlier in the session, he explained every month the Fed buys $85 billion in bonds to push money into the U.S. economy. The motive “is to stimulate capital investment … we’re hoping that capital investment turns into jobs and economic activity.”
Yellen faces the challenge of keeping inflation low and employment high. Hicks confided, “We’re not seeing the bank lending that we should.”
He warned, “If it’s not easy for workers to find jobs and businesses to find workers, then stimulating the economy through a monetary policy will not work.”