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Missing Workers: 4.9 Million Out Of Work And Forgotten

Job

First Posted: 02/04/11 08:08 AM ET Updated: 05/25/11 07:30 PM ET

Over the last three years, nearly 5 million U.S. workers have effectively gone missing.

You won't find their photos on the backs of milk cartons. The Coast Guard isn't out looking for them. No missing-persons reports have been filed. These are jobless Americans who have grown so discouraged by their unsuccessful searches for work that they have simply given up the hunt. They are no longer counted among the 14.5 million Americans officially considered unemployed as of the end of last year, according to the Department of Labor.

Indeed, when the government on Friday delivered its latest monthly snapshot of the labor market for January, which showed the unemployment rate falling to 9 percent, these people -- a group larger than the population of Los Angeles -- were not even counted. Some are sprinkled into the fine print, counted in categories such as "discouraged workers," but most are invisible.

The past several months have shown strong signs of improvement in the U.S. economy. Manufacturing expended at the fastest rate in seven years in January, the private sector is adding thousands of jobs, gross domestic product is on the rise. The Economist describes the current profit-reporting season as "shaping up to be one of the best ever."

Given these indications of improvement, one might expect that those who felt discouraged months ago would resume looking for employment. But the group of Americans who have given up looking for work is larger than ever.

In January, the percentage of Americans who were either employed or actively looking for work fell to 64.2 percent, what economist Heidi Shierholz calls "a stunning new low for the recession." Shierholz estimates that 4.9 million Americans are left out of the Department of Labor's official unemployment count because they are too discouraged to continue seeking work.

"We have now added jobs every single month for a year," Shierholz said. "So you would think that there would be labor-force growth, these missing workers starting to come back in. Not only is that not happening, it's actually starting to go in the other direction. There's never been a pool of missing workers this large. It's not clear to me when they'll come back."

When Raymond Sievers was laid off from his job at a biotechnology firm in California, where he worked for a company that manufactures drugs for cancer patients, he was upset, but not devastated. Sievers was 44, living comfortably in San Diego with his wife and two young children. He had a master's degree in biology, and full confidence that he and his family would recover from this setback. That was back in April 2008.

"I thought, 'I've got over 12 years of experience manufacturing these drugs with excellent success,'" Sievers said. "So I looked for a year and a half and got nowhere. All these years of experience and this fabulous degree, and no one cares."

Sievers spent three years sending out hundreds of job applications, which earned him a couple of near-misses. But while he still has his resume up on multiple employment sites, Sievers -- now 47 -- has given up looking.

"One can only take 'no' so many times," Sievers said quietly. He and his wife, who was also recently laid off, are living off their savings and biding their time, trying to minimize their expenses. They try not to think about the future, too scared to contemplate what will happen if their savings give out.

Sievers is no longer one of the 14.5 million officially unemployed Americans -- the grim 9.4 percent of the working-age population out of a job as of the end of last year. That 9.4 percent starts looking almost rosy when compared with the roughly 10.7 percent of Americans who would be counted unemployed if you added just half of the discouraged workers like Sievers back in.

For those economists engaged in the tricky work of predicting when an improving American economy will translate into a declining unemployment rate, there is one unknown that trumps all other uncertainties: as the economy improves, will these American workers return to the workforce? And if so, when?

For the discouraged worker, the question of when, if ever, they will get their old life back is even more elusive.

"What am i going to do with the rest of my life? I keep saying to myself: what am I going to do? I have another 20 good years in me!" said Christopher Prukop, 65, who lives alone in Brookline, Mass. He is tall, with a weathered, handsome face and a charismatic smile, still extremely energetic despite years of strain.

Prukop lost his job fundraising for an international animal-welfare organization in March 2008. He has a bachelor's degree from Middlebury College and a master's degree in history from Tufts University, as well as 20-plus years of fundraising experience and eight years of good performance reviews from his last place of employment. He enjoyed his life -- going to the ballet and museums in Boston -- and he loved his work. But after almost three years, hundreds of applications and roughly 50 job interviews, none of which panned out, he felt done.

"It's very easy to give up," Prukop said. "Especially when you put yourself on the line repeatedly, looking for a job and being told no. After a while you begin to have major doubts about what you've accomplished in life, and what you sill have to offer. After a while you start wondering, 'What have i really done?'"

Prukop would love to be back to work, and would take a job if one was offered to him, but the daily grind of effort and rejection grew to be too unbearable. He is among the most fortunate of discouraged workers. He made decent money for 20 years -- his last job paid around $55,000 annually -- accumulated savings, bought a condo and is in excellent health. He could afford not to apply for the lowest level jobs available. When he turned 65, he registered for Social Security, and now lives off those checks and the remains of his savings, hoping that disaster won't strike.

Sitting in a coffee shop, Prukop lowered his voice when the conversation turned to money. "I don't want to live on Social Security. Nor do I want to work at a Star Market," he whispered. "Not having a job is very limiting in one sense. So much of how we define ourselves is defined by the job we have. It's how we function in life. I just don't see myself being old and retired."

Help, Prukop said, has not been forthcoming. "There seems to be this unspoken hope that people like me will just sort of disappear."

Uncharted Territory

Labor economists are obsessed with the problem of these missing workers and what effect their possible return could have on the job market.

"The big problem that labor economists have realized for a long time is that the unemployment rate misses a huge part of the story," said Till Marco von Wachter, an economics professor at Columbia University who studies the effects of long-term unemployment. "The big question is how many people are out there, really, who have no work?"

A missing workforce this large -- and this capable -- is unprecedented. The discouraged workers of the Great Recession are largely qualified workers. They want to be working. But the job market has been too weak for too long.

"The problem is, when you hear about long-term unemployment from the past, it really was about workers who had to change careers, or who were unemployed not because of the labor market, but because of something about themselves," von Wachter said. "But now, we have a situation in the labor market where people are unemployed for long periods of time, but it's not about them. And now we're really in uncharted territory. So the question is: will they bounce right back when the labor market comes back, or will they not."


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