economy

By Don Lee and Samantha Masunaga
September 5, 2016

Millions of workers who dropped out of the job market during the last economic slump were supposed to jump back in once things turned around. But more than six years after the Great Recession ended, the missing millions are increasingly looking like they’re gone for good.

The nation’s labor participation rate — defined as the share of the working-age population that is either working or looking for work — hasn’t budged from a 38-year-low of 62.6% this summer. And most experts don’t see an upswing on the way.

The reasons include the nation’s aging population, swelling ranks of people on disability and changing nature of jobs. But one of the biggest factors has to do with men in the prime of their work lives, particularly those with less education.

Mitchell Johnson of Hawthorne has been unemployed since 2012, when he completed an 11-month construction training program. Married without children, the 26-year-old high school graduate blames it partly on the fact that he isn’t a union member.

Johnson says he could probably find low-wage work at a restaurant or retail store, but he is holding out for something better.

“I’m going for a career job,” he said. For now, he volunteers at a community work center and relies on sporadic side jobs, such as house painting, and his wife’s income from her job at a department store. “I got people to help me out,” Johnson said.

Labor participation for men age 25 to 54 has been declining for decades but sped up during the recession with large-scale layoffs in construction and manufacturing. Their growing withdrawal from the job market is especially worrisome because it carries significant social and economic costs.

Collectively, these trends indicate that the U.S.’s potential workforce — and thus productive capacity — may be considerably smaller than previously thought.

Some economists have long argued that the true unemployment figure is a few percentage points higher than the government-reported rate, currently 5.1%, because officials don’t count people as unemployed if they’re not actively looking for work.

But more and more experts are concluding that the great exodus of workers in recent years isn’t going to reverse.

Meanwhile, many workers who have been able to land only part-time jobs are finding that a stronger economy doesn’t necessarily lead to more work hours. The number of part-time workers wanting to work full time remains unusually high today, and there’s some evidence that this increase since the recession is largely permanent.

“There isn’t a lot of hidden slack,” said Harry Holzer, a Georgetown University professor and former chief economist at the Labor Department, referring to the pool of jobless and underutilized people ready and able to fill jobs.

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