Discouraged workers don't show up in Bureau of Labor Stats ; They're not counted as part of monthly unemployment rates.
- Originally published in the San Antonio Express-News (Texas) February 18, 2005 Copyright 2005 San Antonio Express-News
By William Pack
Uprooted by a USAA downsizing almost seven years ago, Matt W. King is
again hunting for work after taking time off to be schooled in network
administration. While he knows some companies have moved computer work
offshore, he believes he is better prepared to land a good job than he
was when a two-year, business management degree was all his resume
offered.
"There's no sense in getting
disappointed," said King, 50, who found only temporary jobs during his
initial job search. "I can do it. I just need someone to give me a
chance."
Maria Daniel, 49, also
decided that more schooling was preferable to low-wage job offers after
a 24-year stint with Levi Strauss & Co. ended when the local jeans
plant shut down last year.
Still,
Daniel expects that there won't be many openings for pharmacy
technicians once she passes her certification exam in March. She even
has a backup plan ready if additional schooling does not pay off.
"I'm not going to give up," Daniel said while stopping by an Alamo
WorkSource job center last week. "I have to look for work."
While neither King nor Daniel would consider themselves quitters, in
the eyes of federal labor analysts they have been. Since each quit
actively seeking work to go to school, for at least a portion of the
last several months they belonged to a group that analysts say is not
part of the labor force.
The labor
force, as calculated in monthly surveys, is made up both of working
people and unemployed people who have looked for jobs in the previous
four weeks.
If a jobless person has not
looked for work - because of schooling, a new child, lack of
transportation, illness or because he or she did not think any work
would be available - he or she is characterized as a discouraged
worker.
A broader definition says
they're "marginally attached" to the labor force. The Bureau of Labor
Statistics doesn't count them in monthly unemployment rate
calculations.
Analysts have watched the number of marginally attached workers rise and fall with business cycles.
Many people withdraw from the labor force when job opportunities are
shrinking, and they return when a recovery boosts job prospects.
But the nation's economy has been in recovery since November 2001, and
so far marginal workers have not made it back to the labor force in
expected numbers.
The bureau estimated
that in January, 1.8 million workers were marginally attached. Of that
number, 515,000 were listed as discouraged, meaning they were convinced
they would not find a job.
Those were
the second highest totals ever recorded by the bureau since the count
of those not in the labor force was revised in 1995.
Last year, an average of almost 1.6 million marginally attached workers
was identified each month. That was slightly higher than the 2003
average.
The bureau calculates that the
nation's unemployment rate in January would have been 6.4 percent
rather than 5.2 percent if discouraged and marginally attached workers
were counted.
Sylvia Allegretto, an
economist with the Economic Policy Institute, said the shrinking labor
force participation rate is evidence that the recovery is not as strong
as some claim.
Tumbling unemployment rates that were recorded last year, Allegretto said, might not be the good news they seem.
She believes those rates fell more because unemployed people are
fleeing the labor market than because of an improving jobs outlook.
Ironically, a truly robust increase in jobs may increase the
unemployment rate, because more of the unemployed who had been on the
sidelines would return to the labor force looking for work.
"We are not creating the opportunity for those who want to come back into the labor force," Allegretto said.
Past studies of discouraged workers and others who withdraw from the
labor force show they often are under 24 and have less than a high
school education. More than a quarter of the marginally attached
workers in 1999 were African American, a federal survey showed.
Carl Tannenbaum, chief economist with LaSalle Bank in Chicago, said
marginally attached workers will need to be more tenacious about their
job searches and may need to be retrained or change cities to find a
new position in the future. But first, he and other experts say, they
need to believe a good job is available to them.
Tannenbaum said the National Association for Business Economics is
forecasting average job growth of about 180,000 a month in 2005, which
would fall short of growth records in past expansions. It was not
unusual, he said, for past economic recoveries to produce more than
250,000 new jobs monthly.
Asked if
180,000-a-month job growth would be enough to energize marginally
attached workers, Tannenbaum said, "We're keeping our fingers crossed."