Some good analysis on unemployment from the WSJ. They use a graphic and some analysis about who was laid off during this recession from Professor Autor! The article is about how even though unemployment is very high, companies are having trouble hiring for a variety of reasons. Many people are less able to move during this recession because it was a housing bubble, and people either don't want to or are unable to take a loss selling their house. Some people are choosing to stay on unemployment benefits rather than take a low paying job. The deteriorating education system also seems to have caused the quality of the labor force to be lower, which makes it difficult for companies looking for people with specialized skill, especially since many companies are either unable or unwilling to pay very much. During the recession, it is mainly middle skilled workers who are laid off, who don't necessarily have the skills that companies are currently looking for.
While an obvious solutions seems to be to stop unemployment benefits, it may be a short-sighted thing to do. Stiglitz encouraged extending unemployment benefits because stopping or even reducing them would make reduce consumer spending and increase foreclosures, so even if those people got lower paying jobs, there may not be a net aggregate benefit to the economy. It may arguably help reduce government expenditures, but it may also make things worse by reducing state and local revenues.
Another obvious need is to improve the skill level of the labor force by investing in education. However, this is expensive, and I think part of the problem is also that companies also used to pay more for their workers to go to training classes, but now that financial burden needs to be borne by either the workers or government training programs. Perhaps a more efficient use of the unemployment benefits should be in the form of money for taking classes.
Stiglitz also makes a good argument that since the recession was caused by a bubble in the financial and housing markets, there is no reason that people in other sectors should be taking the hit for it, especially since real wages for the middle class have been stagnant. Income disparity has been growing the United States, implying that some have gotten rich at others' expense. The fact that the financial industry has pretty much recovered since the crash means that those who benefited are likely to keep their gains and will likely gain further since others are being pressured to take lower paying jobs.