Low Labor Force Participation Means Jobs Crisis Is Worse Than It Seems

The jobs crisis may be even worse than it seems.

Times are tough for the nation's unemployed, and many have given up looking for work, dropping out of the labor force. The high unemployment rate of 9.1 percent would be even higher if it included the unemployed workers who have gotten discouraged, a new report from Wells Fargo Securities Economics Group contends. Currently, only 63.9 percent of the population is considered a member of the labor force, the report says.

The dropouts contribute to what's now the lowest labor force participation rate in 30 years.

The average worker will drop out of the workforce after 20 weeks of looking for a job, the report says. That's better than in 2007, when the average worker looked only 8.5 weeks. But there are still 13.9 million people unemployed in this country.

Perhaps more worrisome, the average duration of unemployment is at its highest mark in history -- 40 weeks. That means more and more people are relying on other means of income such as government hand-outs and support from friends and family.

Long-term unemployment is also of significant concern given current trends in hiring. Those employed stand a much better chance of getting hired than job-seekers who are unemployed.

In fact, the prevalence of help-wanted ads that stipulate applicants "must be currently employed" has become so high that a report addressing the issue was recently released by the National Employment Law Project. This trend has only contributed to long-term employment, and now nearly 6.3 million members of the workforce have been out of work for six months or more.

Worse, it seems there's little legislation addressing the issue on the horizon, despite a recent poll from the National Employment Law Project which found that 63 percent of respondents support a law "making it illegal for companies to refuse to hire or consider a qualified job applicant solely because the person is currently unemployed."

Here is a graph showing labor force participation rates since 1980 provided by Wells Fargo Securities Economics Group:

Comments

[Thumbody]

04:35 PM on 08/15/2011

Who ate my cheese?

[Matt Rivera]

02:59 PM on 08/15/2011

Companies requiring applicants to be currently employed when applying to an open position are engaging in a seriously misguided recruiting strategy. As the number of jobs continue to go unfulfilled as companies search to source and recruit the necessary talent for their businesses, this will only add to the talent deficit. Relying on this strategy is an ineffective way of whittling down the number of applications for an available position. Companies need to understand that selecting the right people with the right skills is what is important, not how long it has been since their last job. More at: http://blog.yoh.com/2011/07/misguided-recruiting-strategies-adding-to-the-talent-deficit.html.

[blindhog]

02:40 PM on 08/15/2011

Just a couple of ideas to help reverse that. When a person falls under an arbitrary dollar income amount, just just one dollar, there is a WINDFALL to be made. Why can't that be changed so that people don't take advantage of that arbitrary dollar income amount such that you could still be working and get help.

When there is a divorce, give the majority of the award to the children in a form of a trust to be meted out to them for college or trade school, while at the same time insuring the stay at home parent isn't left in the unfair position after divorce of a minimum wage job while the former breadwinner continues to rake in the big bucks from an extablished career. Sometimes because of barracuta lawyers, when the high earner exspouse retires, the ex does too for fear of losing the more lucrative pension (as compared to the minimum wage income the newly divorced spouse takes on). A poorly compensated spouse might love to continue working to help out their children, but divorce laws make that dangerous and they know that their wealthier exspouse would spend the extra pension on their new wife and family anyway.

[klg1956]

04:38 PM on 08/17/2011

Just remember, when you are eligible for retirement (social security benefit), which is earliest in the 50's you can apply for 1/2 of your husband's ss benefits that he has earned, then withdraw before the month you turn 62 and then reapply at the higher ss benefit, then withdraw before 65 birthday, and then reapply for the higher ss benefit, then withdraw before 68th birthday, then reapply at the higher benefit...our poor government employees who say they need their expensive pensions because they do not have social security benefits because they did not pay into it, do not tell you their dirty little secret that they apply for 1/2 of their spouses' social security benefits....congress does this too, many are married to lawyers or corp. execs who have paid into social security and they apply for their spouses benefits...even non citizens whose husbands or wives have worked and paid ss taxes can apply for 1/2 of their husband's benefits, and if you do have ss benefits of your own, but they are very low, you can still apply for 1/2 of your husbands as long as you do not go over his total amount of ss benefit. Good luck!

[fortressfountain]

05:38 PM on 08/14/2011

I do not believe people game the system-the quality of jobs has been diminishing and the hours are cut so it is not worth it for people to work hard.
Why is the graph only from 1980?
This is a poor graph as there are many more people than there were in 1980.

[Savage Saint Roger]

04:59 PM on 08/14/2011

Well, demand is still here but the jobs aren't! They make our trinkets someplace else.

Buy local. Buy staples. Buy Quality and buy less often. Buy American made and leave the plastic on the shelf...and the plastic cards at home! We Americans have an exaggerated view of what it takes for one to be happy.
Turn off the TV! Tape, excuse me, record everything and avoid all commercials-do not look at them or listen to them, even the funny one's.
Raise a Victory Garden!
Buy US savings bonds! They are a really good and practical way to save especially since banks don't want savings accounts any longer. (I know everyone tells me they are pointless but everyone ain't doing so well either.)
Use Cash to protect yourself from tomorrow's bills!

[JohnBryansFontaine]

12:12 PM on 08/14/2011

Back Home, Lawmakers Are Asked: Where Are the Jobs?
by Mike Hall

http://blog.aflcio.org/2011/08/11/back-home-lawmakers-are-asked-where-are-the-jobs/

[Rudym]

01:46 PM on 08/14/2011

Politicians take note; the GOP won a landslide election by promising jobs and that has not materialized either. When will politicians work on the root cause of unemployment that is unbalanced trade and outsourcing and lack of a long-term national economic plan or goals for the USA?

We also have an unbalanced representative problem in Washington. That is a lack of practical understanding of manufacturing problems created by unbalanced trade. Instead of business-experienced politicians, we have an army of lawyers with the only long-term goal is to be reelected by making non-practical promises. Their mistakes created the lack of jobs in the first place by allowing unbalanced trade to destroy manufacturing job opportunities and short term fixes that lack business incentives to invest in the USA.

[techsupport]

11:15 AM on 08/14/2011

Read this and weep:
http://ampedstatus.org/exclusive-analysis-of-financial-terrorism-in-america-over-1-million-deaths-annually-62-million-people-with-zero-net-worth-as-the-economic-elite-make-off-with-46-trillion/#rules

[OldTulsan]

02:39 PM on 08/14/2011

The most important fact from the ampedstatus article:

"The fact of the matter is that the overwhelming majority of US population is unaware of the vast wealth at hand. An entire generation of unprecedented wealth creation has been concealed from 99% of the population for over 35 years. "

A reassuring fact: The U.S. is number 1 in small arms ownership.

http://www.smallarmssurvey.org/fileadmin/docs/A-Yearbook/2007/en/Small-Arms-Survey-2007-Chapter-02-annexe-4-EN.pdf

"The peasants are armed and they are angry" -- timely bumper sticker

[Savage Saint Roger]

04:42 PM on 08/14/2011

I keep thinking that about the peasants but I always hesitate to say it. The conservatives don't like anyone talking about guns unless it's them. Makes them nervous to realize they don't own them all. And of course, not all peasants are liberal...but give them time!

[William1950]

11:07 AM on 08/14/2011

I know this idea is not very well accepted...yet - However, we as a society will ultimately be faced with some important decisions. How will we deal with 50% or higher PERMANENT unemployment.. worldwide? If one looks at the inexorable march of technology towards automation and more capable and useful computers and applications that will soon be used to replace most of our "service industry".. I am not saying this is a bad thing.. it is something we are not facing honestly. At one time not too long ago science and technology were proudly hailed as the savior of humanity, the ease, the tool that would free us from drudgery in our daily lives.. and that time is upon us.. and is unstopable.
So, that leave us in the position of adjusting our system. Most will agree that the free market and capitalistic business model are good for innovation and economic growth.. If we want to preserve the best of the free market system we will have to have method to get funds into the hands of everyone.. A Basic Income Model would do that. Everyone would recieve an income that would cover housing and food and medical care, working or not..
We have to explore a Basic Income Model...

[Rudym]

01:50 PM on 08/14/2011

Your basic income idea won't won't work because there a lot of basically lazy people that will figure out a way to game the system to their advantage at the disadvange of honest hard working people.

[Savage Saint Roger]

04:44 PM on 08/14/2011

The current method of distributing the wealth is simple, wait on the big die off!

[larmar]

10:45 AM on 08/14/2011

"All over the place, from the popular culture to the propaganda system, there is constant pressure to make people feel that they are helpless, that the only role they can have is to ratify decisions and to consume."
— Noam Chomsky--

Think, People! Think!
This stuff is not by accident!

[Savage Saint Roger]

04:45 PM on 08/14/2011

Yep! Right on!

[Puro Purepechas]

10:36 AM on 08/14/2011

I suspect true unemployment is around 25% of the countries workers. Even worse there are very few decent jobs to be had. Jobs that pay well, provide health coverage and have good benefits.

[Savage Saint Roger]

04:46 PM on 08/14/2011

I agree. I think the numbers have to be around 20 million, easily. Ther are many people who have been living with family and out of work for actually - years now!

[swift goat pet for truth]

10:34 AM on 08/14/2011

The big driver is demand.
5 applicants for every opening.

Corporations are not hiring because they are not selling.
They are not re-investing in new equipment because they have capacity - land, machines, capital - just lying around, unused.

Hiring comes from private corporations, the military, local governments, and the fed government.
None are hiring now.

So, what are the alternatives for the unemployed?

[Thumbody]

04:39 PM on 08/15/2011

live in a trailer down by the river

[swift goat pet for truth]

10:26 AM on 08/14/2011

With unemployment this large, there MUST be a part of it that is motivated, intelligent, hard working and willing.  Huge numbers of people got caught in mass layoffs, and had job specific skills that did not match up EXACTLY with what a business thought it might need.

There are people in our country, many 45 or 50+ who fit the description above, and with a LITTLE retraining, could fill certain jobs.

But hiring H1-B candidates is just so much cheaper.
Except for the United States.

All a corporation has to do is ask its bought member of Congress to change a number.

[fortressfountain]

10:03 AM on 08/14/2011

With the aging global populations the agenda is to focus on the young-this is only kicking the bucket down the road as world populations are declining.
Why would they not educate the workforce they have now to take on the jobs of the future? Too cheap and lazy.
We will not go on credit to support your global agenda.

[nomoredead]

09:48 AM on 08/14/2011

Any smart young person should be looking at other countries to move to.

[Jasmine Mar]

12:23 PM on 08/14/2011

I think the older generations don't realize that it is already like that. It used to be that foreigners who came to be educated at US colleges then stayed here and enriched the USA. Now they leave when they are done with their degrees. Out of my core group of 10 friends in college, 7 are already now overseas (3 in Japan, 2 in Korea, 1 in Turkey, 1 in Canada) and have lived there on average about 5 years now. Will they ever come back? Probably not. There are no jobs and those that are still here won't offer healthcare or 401k to my generation because they know they can get some desperate kid to take the offer anyway.

[nomoredead]

12:52 PM on 08/14/2011

Congratulations...a very wise group.

[Thumbody]

04:41 PM on 08/15/2011

old people too!

[nomoredead]

09:25 AM on 08/14/2011

http://finance.yahoo.com/news/A-boom-in-corporate-profits-a-apf-3135711604.html?x=0

Your job is a debit to corporations bottom line...they are going to continue to abuse and over work the scared current slaves.