Unemployment rates tell half the story - Millions of people go uncounted

• Originally published by the NY Newsday on September 6, 2004 [here ]

BY ROBERT WALKER
Robert Walker is president of the nonpartisan fuller employment policy group, Get America Working!

Millions of people go uncounted once they stop looking for work, hiding the true picture of the economy
As millions of Americans take the day off today, let's not forget the millions more who lack the opportunity to work. Beyond the 8 million who were officially counted as unemployed and actively seeking work last month, there are tens of millions more who would want to enter or re-enter the labor force if jobs were available. But they aren't - and they aren't counted.

Public attention to unemployment focuses usually on small, monthly fluctuations in the official unemployment numbers, now at 5.4 percent, while ignoring those who have dropped out of the labor force because of poor employment prospects, discrimination or other circumstances. This "hidden unemployment," as some call it, is by far the larger phenomenon.

Whether it's the unemployed factory workers in a small town who have given up looking for work, the stay-at-home parents who can't find a job with a flexible work schedule, or young African-American men who have been shut out of the work force, these able-bodied Americans, though no longer looking for work, are every bit as idled as those standing in the unemployment lines.

Beyond the 8.2 million officially unemployed, there are 100 million Americans not working full-time, according to the Bureau of Labor Statistics. Of these, 75.7 million adults, 16 years or older, are not in the labor force (not actively looking for jobs in the past month) and another 24.2 million are working less than full-time (35 hours or more per week).

We don't know how many of these people might seek work, or work more hours, if employment prospects were brighter, but we do know this job picture represents a great loss of human potential.

And the loss is accelerating. In the late 1960s only a small fraction (2.6 percent) of men ages 25 to 54 did not work at least one week during the year. By the late 1990s, that fraction had increased to 6.7 percent.

With increasing numbers of workers dropping out of the labor force altogether, the unemployment rate does not give a clear picture of how many of us are working. The employment rate - the percentage of people working - is often the more telling indicator.

For instance, the percentage of African-American men ages 20 to 24 who were employed in 1966, two years after passage of the Civil Rights Act, was 82.8 percent, according to a Northeastern University study. In 2003, the number was only 56.2 percent. Employment rates for African-American males ages 16 to 19 has declined from 52.3 percent in 1954 to 29.1 percent in 2000 to 19.9 percent last year.

The percentage of people with disabilities employed in 1990, the year Congress passed the Americans with Disabilities Act, was 39.4 percent, but that employment rate has steadily fallen to 30.9 percent in 2002.

Even the employment rate of people with college degrees has been falling. In 1995, 79 percent were employed; today it's 75.4 percent. Meanwhile, an increasing number of young people ages 18 to 24 are neither working nor in school.

Another indicator useful for getting a full employment picture is labor force participation, the percentage of people who are either working or actively looking for employment. It is currently flat for older men and declining for women.

Despite the improving health and longevity of older workers, the labor force participation rate of men ages 65 to 69 in 2001 was essentially unchanged from 1978. After decades of rising employment rates, women are starting to drop out of the labor force. In the first quarter of 2004, women's labor force participation was down a full percentage point from the first quarter of 2001.

It's these indicators and longer-term trends, more than the month-to-month shifts in the official unemployment rate, that should concern us most. These indicators tell us that half of the adult population is working less than full-time or not working at all, and it's getting worse.

Closing this growing employment gap is emerging as one of the great challenges of the 21st century. In recent decades, we have relied heavily on increases in productivity to propel economic growth, but that can only take us so far. Unless we can put more of America's idled tens of millions to work, we won't be able to pay off our mounting public and private debt or stem growing economic inequality, to the detriment of all. That's why it's vital to create employment opportunities for all Americans, not just the 8 million who are officially unemployed.