Alan Greenspan Is Worried About Jobless Americans

Greenspan said the number of workers who have remained jobless for
long periods during the recession is "what really concerns me."

"These people are losing their skills," Greenspan said. "It is very
critical that those people have the skills when the economy comes
back or we will not be as productive as we ought to be." [Greenspan
Sees Jobs Rebound as Stretched Companies Boost Output ]

Imbalances in the labor markets perhaps may have even more serious
implications for potential inflation pressures. While the pool of
officially unemployed and those otherwise willing to work may
continue to shrink, as it has persistently over the past seven
years, there is an effective limit to new hiring, unless
immigration is uncapped.

"Significantly opening up immigration to skilled workers solves
two problems," he said. The companies could hire the educated
workers they need. And those workers would compete with
high-income people, driving more income equality".

"The most effective initiative, though politically difficult,
would be a major expansion in quotas for skilled immigrants,"
he said. The only sustainable way to increase demand for vacant
houses is to spur the formation of new households. Admitting
more skilled immigrants, who tend to earn enough to buy homes,
would accomplish that while paying other dividends to the
U.S. economy.