rssShrinking Labor Force Masks Deepening Jobless Crisis
Wednesday, July 07, 2010 at 6:00 am
- 101 Comments
Michele Walker lost her job working for a rental management company in the Pittsburgh area in the spring of 2008. She had held a job for the past 21 years, and figured that she, her husband and her adult son would be fine until she could find work again. “Back then, I even thought about getting a part-time job, and cutting back,” she says, sighing. But then her husband was laid off, followed by her son. Her and her husband’s unemployment checks did not meet their fixed expenses, and so they spent their savings over the course of the next two years, drawing down their 401k plans and even dropping their health insurance.
[Economy1] This spring, the checks stopped coming entirely. Their situation became more dire, and they started cutting back — turning off the air conditioning and heat, keeping most lights off, switching grocery stores, even selling their laptop to use the computer at the library to cut back on the cable bill. Walker has contemplated selling their house — once a dream, now a burden, with the gutters needing to be replaced and the bushes needing to be cut — so they can move in with family in Ohio. No matter how many resumes Walker sent out, no many how many businesses she visited — dozens a month, she says — she never managed to find another permanent position. For now, she is selling handmade birthday cakes and other baked goods for cash, advertising by word of mouth and church flier.
Much of the coverage of the June labor market report released on Friday focused on the drop in the unemployment rate, from 9.7 to 9.5 percent, or the 83,000 private-sector jobs created. But the headline numbers hid the reason for the dip in unemployment: not more jobs, but fewer workers. Walker, like 652,000 others across the country, is jobless and has not looked for a position during the past four weeks — and therefore has officially been reclassified as a “discouraged” worker, a person “marginally attached to the labor force,” rather than an unemployed one.
“I’ll start looking again when things turn up,” she says. “And my husband is still looking. Both of us are willing to do just about any job at this point.”
These discouraged workers are part of a broad, and troubling, phenomenon. During the first four months of the year, 1.7 million workers flooded the job market, heartened by good economic news. But in the past two months, as the recovery has faltered, nearly a million workers have fallen back out.
The overarching story of the size of the labor market during the recession is no more encouraging. Increases in the size of the United States’ population mean the labor force should have expanded by around 3.5 million workers during the 30 months between the start of the recession and last month. Instead, it has lost 128,000 people. Those 3.6 million — the ones who didn’t enter the workforce and the ones who left it — make up a class of “missing workers,” people who in better economic times would be producing goods and services, and contributing to the United States economy. Now, they do not even show up in the official counts of the unemployed and employed.
The June employment numbers give a glimpse into who the “discouraged” workers are. Between May and June, the labor force declined in every category — young and old, male and female, black and white, Hispanic and Asian. But some demographic groups suffered particular harm. For every 35 men who dropped out of the labor force in June, 65 women did. Black workers were 33 percent of the dropouts, though they make up just 11.6 percent of the labor force. Additionally, the number of people in the labor force in June with college degrees increased slightly, while the number without college or high-school diplomas declined.
The people hit hardest, though, were young workers, aged between 16 to 24. They made up 44.5 percent of the June decline, though they comprise only 13.5 percent of the labor force overall. Those young workers — who suffer from the highest unemployment rate out of any demographic group, particularly for young black men — also tend to suffer from the worst effects from periods of unemployment.
The long-term impact on these discouraged workers may be worse than simply a temporary spell of unemployment. Long periods of joblessness tend to leave workers — particularly young ones — with permanent scars: lower incomes in the future and more trouble finding work for years. The long-term unemployed often find it harder to get work in good labor markets as well. They lose their skills and confidence, and often have trouble switching from shrinking industries into growing ones. Like all members of the long-term unemployed, they tend to suffer from more depression, health issues and even relationship troubles and divorce, due to the financial, personal and emotional stress of joblessness.
At the same time that the ranks of the “discouraged” and “missing” are growing, Congress is at an impasse in reauthorizing federally extended unemployment benefits — with Republicans insisting that the spending not increase the deficit. Some have even argued that over-generous benefits — the average unemployment check is about $310 per week — “spoil” workers. But Heidi Shierholz, an economist at the Economic Policy Institute, argues that further unemployment benefits might have actually kept some of those 652,000 who left the labor market last month looking for jobs.
“When you’re in a downturn like this, the logic gets flipped on its head,” she explains. “To receive unemployment benefits, you need to be looking for work. You are actually required to be looking for a job, whereas if you aren’t getting unemployment insurance, and there aren’t any jobs, you might lose your incentive to look for work.”
Shierholz says the June labor market report indicates that workers are dropping out once they exhaust their benefits, or after months of fruitlessly searching for a job in an economy where five people are competing for every one opening and most economists do not foresee unemployment dropping to levels below 8 percent for years. “Even in a time of strong economic growth, there is lots of churn in the labor market and lots of people leave and later re-enter the labor force. There are plenty of good reasons to drop out — to go to school, or to take care of a relative,” she says. “But when it happens en masse, during a period of labor-market weakness, it is a further signal of weakness. The canonical example is someone who says, ‘I’ve knocked on every door in town ten times. This is futile.’ And there is a lot of that happening right now.”
And she worries that next month, the statistics might be worse. Starting at the end of May, 300,000 people per week began losing their unemployment benefits due to congressional dithering on the extenders package — an unprecedented event, given the sustained, sky-high unemployment rate. The June unemployment survey took place too early to count most of them. Now, 1.7 million Americans have lost their unemployment insurance — and the survey will pick them up in the July numbers. By then, the question will be whether they will raise the unemployment rate — or simply contribute to the tidal wave of people exiting the job market.
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101 Comments
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Comment posted July 7, 2010 @ 10:34 am
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Pingback posted July 7, 2010 @ 12:06 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis “Michele Walker lost her job working for a rental management company in the Pittsburgh area in the spring of 2008. She had held a job for the past 21 years, and figured that she, her husband and her adult son would be fine until she could find work again. “Back then, I even thought about getting a part-time job, and cutting back,” she says, sighing. But then her husband was laid off, followed by her son. Her and her husband’s unemployment checks did not meet their fixed expenses, and so they spent their savings over the course of the next two years, drawing down their 401k plans and even dropping their health insurance. This spring, the checks stopped coming entirely. Their situation became more dire, and they started cutting back — turning off the air conditioning and heat, keeping most lights off, switching grocery stores, even selling their laptop to use the computer at the library to cut back on the cable bill. [...] These discouraged workers are part of a broad, and troubling, phenomenon. During the first four months of the year, 1.7 million workers flooded the job market, heartened by good economic news. But in the past two months, as the recovery has faltered, nearly a million workers have fallen back out.” [...]
Comment posted July 7, 2010 @ 11:13 am
You guys should stop complaining cuz one the health care we have now isnt as good as it was supposed to be. also the law has just been signed give it a try u guys are too hard on democrats they went to college and we voted for most of these people.so if u want to say u have the right to choose tell that to ur congress men or state official. as for obama people are just tryin to make it look like america made a mistake he has done things to help us and we had a full 8 years of a terrible president and i will be so as happy as ever when a obama fixes bush's mistakes. You can find full medical coverage at the lowest price from http://bit.ly/9sfoMb obama has to put up with the wo0rld judging his every move and trying to fix the mess we are in we are lucky anyone wants to be our president. STOP COMPLAINING AND GIVE HIM A BREAK. i wanna see one of yall do what he sas done. some people are just so ignorant.
Pingback posted July 7, 2010 @ 12:32 pm
[...] Certainly as Anne Lowrey points out at TWI, Shrinking Labor Force Masks Deepening Jobless Crisis, we could find something for these peple to do. Certainly there are some public works projects, [...]
Pingback posted July 7, 2010 @ 12:44 pm
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Comment posted July 7, 2010 @ 1:55 pm
The SENATE lives in a glass house. We need to let them know,that we can vote them out .Write,Call,E-Mail,your SENATORS. let them know that unemployed people can still vote,unless they are trying to take that away to! The Republicans are only out for themselves,they have people in need also. But do they care? Not unless your a BIG BUSINESS,they don't care! The unemployment rate is much higher than the books show and the SENATE knows it. People who have lost benifits do not show up on the books,making things look better.What do they think,we are stupid? Republicans give BIG BUSINESS TAX BREAKS AND LOOP HOLES! Now who do they really care about? VOTE REPUBLICANS OUT AND PUT THEM ON UNEMPLOYMENT!!!
THEN TAKE A VOTE!!! You would think with lost tax revenew they would take a paycut,or get layed off,like what happened to us on unemployment! Is'nt that what their BIG BUSINESS FRIENDS DID TO US? They are JUST PLAIN SELFISH AMERICA,IT IS ALL ABOUT THEM!!! VOTE THESE SENATORS OUT NOW!!!!!!!1
Pingback posted July 7, 2010 @ 3:08 pm
[...] SHOCKER: BUREAU OF LABOR STATISTICS COOKS THE BOOKS ON UNEMPLOYMENT FIGURES – Quick! Somebody blame George W. Bush! After all, conservatism is dead! Right?…right? Much of the coverage of the June labor market reportreleased on Friday focused on the drop in the unemployment rate, from 9.7 to 9.5 percent, or the 83,000 private-sector jobs created. But the headline numbers hid the reason for the dip in unemployment: not more jobs, but fewer workers. Walker, like 652,000 others across the country, is jobless and has not looked for a position during the past four weeks — and therefore has officially been reclassified as a “discouraged” worker, a person “marginally attached to the labor force,” rather than an unemployed one. [...]
Comment posted July 7, 2010 @ 3:01 pm
Vote these selfish Republicans out! WRITE-CALL-E-MAIL THEM NOW!!
The unemployed can still vote,unless they are trying to say no to that also!
VOTE OUT REPUBLICANS SO THEY CAN GO ON UNEMPLOYMENT!
THEN TAKE A VOTE ON UNEMPLOY>BENEFITS
Comment posted July 7, 2010 @ 3:33 pm
HOUSEHOLD INCOME (2007)
25 million=$18,000 (average per family)
22 million=$42,500
23 million=$64,500
23 million=$94,100
24 million=$264,000
12 million=$394,000
6 million=$611.000
1 million= $1,873,000
40 million on food stamps in 2010
20 million unemployed
25 + 20 + 40=85 M of 116 M –73%—in Serious Trouble.
When will Les Miserables revolt?
GOD BLESS OUR NEW WAS WALL STREET OF AMERICA
cbo.gov olduglymeanhonest disgusted
Comment posted July 7, 2010 @ 3:45 pm
You don't have a valid statistic until you consider people being paid of 1099s. In working slowdowns, people often take part-time positions & those payments are recorded annually to the IRS via Form 1099-misc. Until you have a complete picture, you are wasting space.
Comment posted July 7, 2010 @ 4:32 pm
Rollyn,
You're muddling independent contractors/agents and part-time work. The real distinction is whether the worker is covered by unemployment insurance or not- if they are, then they are recorded in the QCEW from the DOL, and if not, then in the State and Local Area Personal Income datasets from the BEA, which includes 1099ers. Part time work can be covered by unemployment insurance. Unemployment data is derived from multiple data sets, including Current Population Statistics, which is survey based and makes no distinction between 1099ers and W-2 workers.
@M_Beauchamp
Pingback posted July 7, 2010 @ 5:33 pm
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Pingback posted July 7, 2010 @ 6:21 pm
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Comment posted July 7, 2010 @ 6:19 pm
This is what I am talking about. Stop sending information that isn't going to help people. this is not a page to advertise your site on and take advantage of people. I know lots of people who have gone through these programs and now have school loans and still looking for work.
And Obama didn't have to make changes to the health care plan, because if you don't work and have no money, there is medical care available for people. It is called Medicaid and at this rate everyone will pretty much qualify and if they don't they will become so depressed that they will have more health issues and become disabled in the mist of it and then can apply for disability and get Medicare. It will all come out in the wash.
It is just like the immigration issue. No matter what everybody, including ,–Obama, the Governor of Arizona want money will dictate what the outcome is and if Arizona doesn't have the money for the illegals, then the problem will take care of its self. It will all come out in the wash.
Pingback posted July 7, 2010 @ 8:19 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The Washington Independent [...]
Comment posted July 8, 2010 @ 4:03 am
I am self-employed and socialize with a few of the same for coffee on Fridays. It has been interesting to see just how many of them have had their income drop to near zero over the last three years.
Note to self-employed people, you have to pay unemployment tax in most states, but you CANNOT make a claim for unemployment, because you are not an employee.
Another note that may not be obvious to some: I considered hiring two new people to help with my business. It is going pretty well, but two more people could increase my income quite a bit — I thought! My accountant showed me that after new 2011 income taxes, and new health insurance rates ( 2011 quote for pretty standard health insurance was $24,600 per year vs the 2009 quote I had for $16,500, per employee family of three) I am better off staying a sole proprietor, lower income pre-tax, with no employees.
I do not wonder why the employment rate is not improving, I know why.
Pingback posted July 8, 2010 @ 9:15 am
[...] Labor Force Masks Deepening Jobless Crisis (Washington Independent) Annie Lowrey explains that the only thing keeping the unemployment rate from getting even worse is [...]
Pingback posted July 8, 2010 @ 9:38 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 8, 2010 @ 1:46 pm
[...] Lowrey did an important story yesterday about the way the labor force is shrinking in response to the anemic labor market. The blog post nickle version: Increases in the size of the United States’ population mean the [...]
Pingback posted July 8, 2010 @ 2:29 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 8, 2010 @ 3:03 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 8, 2010 @ 11:29 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 9, 2010 @ 3:06 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Comment posted July 9, 2010 @ 3:04 am
If you would have only two employees, why would you have to provide them with health insurance? As for income tax, whose are you referring to, yours or your employees'? Unless your income tax rate would be above 100%, I fail to see the problem. Your employees' pay would be deductible to you or your corporation.
Pingback posted July 9, 2010 @ 1:30 pm
[...] Annie Lowrey writes, the recession has produced a nationwide subclass of former-workers and would-be workers who have [...]
Pingback posted July 9, 2010 @ 8:29 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The Washington Independent [...]
Pingback posted July 10, 2010 @ 12:14 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 10, 2010 @ 11:01 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 10, 2010 @ 12:53 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 10, 2010 @ 6:13 pm
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Comment posted July 10, 2010 @ 8:50 pm
SENATE GOES ON PAID VACATION,leaving 2 million American Families,with no extensions of unemployment. These are American Families they left under the bus! HOW SAD IS THAT AMERICA?
Now do you honestly think Republicans care about everyday American Families? They would'nt leave their BIG BUSINESS FRIENDS UNDER THE BUS! They don't even think BP should put more in the fund for emergencies,such as the oil spill in the gulf!
Who are they helping there? BIG BUSINESS BP, thats who.
Mitch MConnell, has no clue about the real world out here. But you don't see him or other SENATORS taking a paycut,to cut spending!
How long before Republicans say no to letting the unemployed VOTE?
It is time everyday Americans are in office,that know how the real world is out here, These SENATORS live in a world of their own.
WRITE THEM> CALL THEM> E-MAIL THEM
Let them know they to ,could soon be unemployed!
VOTE THE REPUBLICANS OUT BEFORE IT'S TO LATE AMERICA!
AMERICANS HELP AMERICANS SENATORS NOT THEMSELVES!!!!
Pingback posted July 11, 2010 @ 7:56 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The … [...]
Pingback posted July 12, 2010 @ 2:57 am
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The …Northern Dispatch (nordis) Weekly » Blog Archive » Labor Watch … Blogging craig becker, proskauer rose, unfair labor practice [...]
Pingback posted July 14, 2010 @ 9:13 am
[...] The unemployment rate dropped slightly in June, but as Annie Lowrey writes for The Washington Independent, that drop masks another trend affecting women and minorities particularly — 652,000 workers who have been reclassified as “discouraged,” not unemployed but “marginally attached to the labor force.” “The June employment numbers give a glimpse into who the ‘discouraged’ workers are. Between May and June, the labor force declined in every category — young and old, male and female, black and white, Hispanic and Asian. But some demographic groups suffered particular harm. For every 35 men who dropped out of the labor force in June, 65 women did. Black workers were 33 percent of the dropouts, though they make up just 11.6 percent of the labor force. Additionally, the number of people in the labor force in June with college degrees increased slightly, while the number without college or high-school diplomas declined. [...]
Pingback posted July 14, 2010 @ 2:11 pm
[...] Annie Lowrey of The Washington Independent comes critically important context on those numbers and what they mean for those included in their [...]
Pingback posted July 16, 2010 @ 3:38 pm
[...] not just because the economy will add jobs more quickly. More people will leave the labor force discouraged. More older workers — in particular — will not find work, will give up and will move on [...]
Comment posted July 18, 2010 @ 12:28 am
The republican’s weren’t worried about the deficit when that big insurance company and their friends the Wall Street execs were giving themselves bonuses with taxpayer money!!! Next election – let Congress feel the sting of the unemployment lines!!! No more raping and pillaging the middle class!!! – How many years have you paid taxes? 30? 40? Your government bails out bankers and Wall Street execs using your tax dollars – but unemployment is allowed to expire? What happened to “by the people” or “for the people”? Or are the big campaign contributors the only “people” who count to congress? They are playing games AGAIN FOR THE THIRD TIME while you are wondering how to feed your kids? Figure it out! Malfeasance – Failure of a public official to perform their duties!!! Next Election MAKE YOURSELF MATTER BY VOTING!!! 10% unemployment carries 10% of the vote! Use it!! Fire them all next election or recall every Congress member NOW for Malfeasance – Failure of a public official to perform their duties!!! Next Election – Lets get people elected who actually represent all the People- this current congress represents only special interest groups!
Don’t re-elect or even better Recall your senator or congressman that voted no to extended benefits.Failur of an elected official to do their job is malfeasance.
Here's how you do it:
go to:
http://www.ehow.com/how_2096900_recall-us-senat…
The list is as follows:
goto:
http://www.ehow.com/how_2096900_recall-us-senat…
The senators voting no are:
Alexander (R-TN)
Barrasso (R-WY)
Bennett (R-UT)
Bond (R-MO)
Brown (R-MA)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Chambliss (R-GA)
Coburn (R-OK)
Cochran (R-MS)
Collins (R-ME)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Graham (R-SC)
Grassley (R-IA)
Gregg (R-NH)
Hatch (R-UT)
Hutchison (R-TX)
Inhofe (R-OK)
Isakson (R-GA)
Johanns (R-NE)
Kyl (R-AZ)
LeMieux (R-FL)
Lugar (R-IN)
McCain (R-AZ)
McConnell (R-KY)
Nelson (D-NE)
Risch (R-ID)
Roberts (R-KS)
Sessions (R-AL)
Shelby (R-AL)
Snowe (R-ME)
Thune (R-SD)
Vitter (R-LA)
Voinovich (R-OH)
Wicker (R-MS)
Alexander (R-TN)
Barrasso (R-WY)
Bennett (R-UT)
Bond (R-MO)
Brown (R-MA)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Chambliss (R-GA)
Coburn (R-OK)
Cochran (R-MS)
Collins (R-ME)
Corker (R-TN)
Cornyn (R-TX)
Crapo (R-ID)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Graham (R-SC)
Grassley (R-IA)
Gregg (R-NH)
Hatch (R-UT)
Hutchison (R-TX)
Inhofe (R-OK)
Isakson (R-GA)
Johanns (R-NE)
Kyl (R-AZ)
LeMieux (R-FL)
Lugar (R-IN)
McCain (R-AZ)
McConnell (R-KY)
Nelson (D-NE)
Risch (R-ID)
Roberts (R-KS)
Sessions (R-AL)
Shelby (R-AL)
Snowe (R-ME)
Thune (R-SD)
Vitter (R-LA)
Voinovich (R-OH)
Wicker (R-MS)
Alexander(R-TN)
Barrasso(R-WY)
Bennett(R-UT)
Bond(R-MO)
Brown(R-MA)
Brownback(R-KS)
Bunning(R-KY)
Burr(R-NC)
Chambliss(R-GA)
Coburn(R-OK)
Cochran(R-MS)
Collins(R-ME)
Corker(R-TN)
Cornryn(R-TX)
Crapo(R-ID)
DeMint(R-SC)
Ensign(R-NV)
Enzi(R-WY)
Graham(R-SC)
Grassley(R-IA)
Graham(R-NH)
Hatch(R-UT)
Hutchison(R-TX)
Inhofe(R-OK)
Isakson(R-GA)
Johanns(R-NE)
Kyle(R-AZ)
LeMieux(R-FL)
Lugar(R-IN)
McCain(R-AZ)
McConnell(R-KY)
Nelson(R-NE)
Risch(R-ID)
Roberts(R-KS)
Sessions(R-AL)
Shelby(R-AL)
Snowe(R-ME)
Thune(R-SD)
Vitter(R-LA)
Voinovich(R-OH)
Wicker(R-MS)
If one of these is your senators, and you live in the right state, start a recall or don’t re-elect!!!
Pingback posted July 18, 2010 @ 7:35 pm
[...] by medical negligence and malpractice in a number of … market research, surveys and trends Shrinking Labor Force Masks Deepening Jobless Crisis « The … Michele Walker lost her job working for a rental management company in the Pittsburgh area in the [...]
Pingback posted July 20, 2010 @ 11:46 am
[...] increased in approximately half of states. In the states as well as nationwide, unemployment rates generally declined because the labor force contracted — not because the states produced new jobs. All in all, [...]
Pingback posted July 21, 2010 @ 4:49 pm
[...] Shrinking Labor Force Masks Deepening Jobless Crisis « The Washington Independent [...]
Pingback posted July 22, 2010 @ 1:49 pm
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Comment posted August 9, 2010 @ 5:30 pm
Failure of a public official to perform their duties!!! Next Election – Lets get people elected who actually represent all the People- this current congress represents only special interest groups
Pingback posted August 30, 2010 @ 11:53 pm
[...] an interview for the article, economist Heidi Shierholz of the Economic Policy Institute made an interesting further argument: The United States’ unemployment benefits are inadvertently lowering the unemployment rate. [...]
Pingback posted September 15, 2010 @ 6:11 am
[...] 6.6 million Americans have been out of work for more than six months, and millions more have simply dropped out of the labor [...]
Pingback posted September 21, 2010 @ 1:08 am
[...] is a subject TWI has examined in the past: The unemployment rate has fallen not just because more workers have found jobs, but because [...]
Trackback posted November 6, 2010 @ 11:39 pm
Shrinking Labor Force Masks Deepening Jobless Crisis « The ……
Here at World Spinner we are debating the same thing……
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Comment posted September 4, 2011 @ 10:58 pm
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