4 Reasons Why Millions Of Americans Are Leaving The Workforce
Originally published on Fri August 2, 2013 9:08 am
The unemployment rate only includes people who don't have jobs and are looking for work. A much larger swath of people — about 36 percent of U.S. adults — don't have jobs and aren't looking for work at all. That figure is higher than it's been in decades (and, conversely, the share of adults in the labor force — shown in the graph above — is lower than it's been in decades).
Here are four reasons why so many people are leaving the labor force.
1. They're retiring.
The baby boomers are hitting retirement age. Even if the job market were in good shape, that alone would be enough to drive up the share of adults who aren't looking for work.
2. They're going to college.
College enrollment is up — and many students are having a hard time finding part-time work. A 20-year-old student named Jeannett Llave told me the last job she applied for was working at the American Girl doll store in New York. "I thought I was perfectly fine and capable of taking care of little girls and, like, just giving them a doll," she told me.
She didn't get the job — and she decided to give up looking and focus on her anatomy class. Because it's been more than a month since Llave looked for a job, she's not counted as part of the labor force.
3. They're staying home with the kids.
In the 1970s and '80s, the labor force participation rate rose sharply, as it became more common for mothers to work. Some of the recent decline has come as parents in dual-income households decide that the cost of day care outweighs the benefits of work.
I talked to one stay-at-home dad who worked in a newsprint factory in Columbia, Mo., making $9 an hour. Now, his wife works as a doctor and he stays home with his 7-year-old daughter.
4. They just can't find work.
"I think at last count I had sent out like 185 resumes or responded to 185 actual openings," Terri Meier, who used to work in human resources at Sony, told me. "And of that, I've gotten two opportunities where I actually went to a live interview."
Meier has been out of work for three years, and she's what the Labor Department calls "marginally attached" to the labor force. Because she hasn't actively looked for a job in the last four weeks, she's not counted among the unemployed.
But she wants to work, and she's looked for a job in the past year. Some 2.5 million Americans fit this description.
DAVID GREENE, HOST:
Now, when we talk about the unemployment rate, we're really talking about the people who wants jobs, are looking for them but don't have them. There's a whole other category not included in the unemployment rate - about 36 percent of adults in the United States are not looking for jobs at all. They've dropped out of the labor force. Lisa Chow from NPR's Planet Money team introduces us to some of them.
LISA CHOW, BYLINE: It sounds pretty scary when you see the numbers - nearly 90 million people old enough to work are not working. The percentage of adults not in the workforce has grown at unprecedented rates since the recession. But when you break down the numbers, it's not quite as alarming as it might seem. Lots of people have a pretty good reason for not working. It's called retirement.
DIXIE SUMMERS: Right now I'm at Dyke Marsh, which is a wonderful place. It's a nature preserve that the National Park Service runs.
CHOW: I catch Dixie Summers(ph) on her cell phone. Instead of pouring over jobs numbers - Summers used to work for the U.S. Labor Department - she's now spending her days doing what she loves, bird watching along the Potomac River in Virginia. She's 64 and a baby boomer and it's this group that's inflated the percentage of people not looking for work.
So we've got demographics driving some people out of the workforce. Here's another reason.
JANETTE YAVEY: I always kind of saw myself going to school.
CHOW: Janette Yavey is a student at a community college in New York. It turns out since the recession young people have dropped out of the workforce at an incredibly fast pace. Now, that could be because instead of working they're staying in school longer, but it could also have something to do with the fact that students like Yavey, a 20-year-old with no work experience, can't find part time work even when they try. So they stop trying.
Earlier in the summer, Yavey applied for a job at a store that sells dolls.
YAVEY: I didn't get the job. I thought I was perfectly fine and capable of taking care of little girls and like just giving them a doll. Not to be too pretentious, but it's like it doesn't seem that hard of a job to get into.
CHOW: Yavey illustrates that there's a fine line between being unemployed and being outside the labor force. And here's where the numbers get a little tricky. Had Yavey applied for her job in the last four weeks, she would technically be counted as unemployed, increasing by just the tiniest amount the unemployment rate. But because she stopped looking for a job to focus on her anatomy class, she's not counted.
Now here's our third reason someone gave up work.
EVIE BYERS: Sometimes (unintelligible) guinea pig.
CHOW: Evie Byers(ph) is seven and she didn't give up a job, but her father did.
MICHAEL BYERS: My name is Michael Byers. I'm a stay at home dad and have been for five, almost six years now.
CHOW: Byers used to work at a newspaper factory in Columbia, Missouri, making $9 an hour, and he did what lots of people do when they have kids; he looked at how much he was making, how much daycare costs, weighed how much he enjoyed his job and decided in the end it wasn't worth it. I asked Byers if he thinks there's a job available for him now.
BYERS: I don't think so. Like I don't think they've hired in years at that factory. And then down here, where we're at now, there's a lot of immigrant labor, and I mean I guess Wal-Mart is always hiring. I could work Wal-Mart.
CHOW: Byers is lucky his wife has a job as a doctor. And finally, we meet Terry Meyer(ph), who used to work in human resources at Sony.
TERRY MEYER: I think at last count I had sent out like 185 resumes or responded to 185 actual openings. And of that I've gotten two opportunities where I actually went to a live interview.
CHOW: Meyer has been out of work for three years and the Labor Department might describe her as marginally attached to the labor force. She's not part of the labor force, not counted as unemployed, but she wants a job and has been looking, just not recently. Retirees, students, parents, they all have pretty normal reasons for leaving the workforce, even though a bad economy can still affect their decisions about when to leave or return to work.
Still, it's really this last kind of person who's most alarming to economists. Two and a half million Americans are like Terry Meyer. They've given up for the time being. Not to go bird watching, but because they've been looking for a job for so long. Lisa Chow, NPR News. Transcript provided by NPR, Copyright NPR.