Where Have All the Missing American Workers Gone?

Hiring In Private Sector Slows In Pace
Justin Sullivan/Getty Images

WASHINGTON -- The unemployment rate has been on a slow downward trajectory since the recession ended nearly five years ago. While the overall jobless level has dropped to non-recession levels, the number of the working-age people with jobs is barely over 6 in 10, hovering at a level reminiscent of the late 1970s.

In May, the U.S. workforce-participation rate -- the combination of those with jobs and unemployed workers actively seeking them -- was just 62.8 percent, the same as the month before. Job markets have been essentially flat since October.

Where have all the missing workers gone?

A key factor, nearly all agree, is the growing exodus from the job market of Baby Boomers. Born roughly in the post-World War II period from 1946 to 1964, these workers are now at or fast approaching retirement age.

Another reason is that some employment-intensive industries that suffered the most during the Great Recession, especially in manufacturing and construction, have yet to fully rebound.

But perhaps the most significant factor is unemployed workers "who just drop out of the job market after one, two or three years of looking for work and not being successful," said Carl Van Horn, a professor of public policy at Rutgers University who studies workplace dynamics and employment trends.

Recent surveys suggest more and more long-time unemployed workers are abandoning the search for another job and leaving the nation's workforce.

"And they are disproportionately older workers," Van Horn said. "We have a large number of older [unemployed] workers who are not old enough to retire, yet they are facing discrimination in the workplace and have found it nearly impossible to get another job."

There's a flip side to that, though, Van Horn suggests: "As the economy gets stronger, as it continues to grow, eventually some of those discouraged workers will come back into the labor market, and we'll have a higher labor-participation rate."

But that hasn't happened -- yet.

"We know that the reason unemployment is so high right now is pretty simple: employers haven't seen demand for their stuff pick up in a way that would require them to bring on more workers, put that factory back on line, get more people to work," said Heidi Shierholz, chief economist for the Economic Policy Center, a labor-oriented Washington think-tank.

"It's going to be this way for a while. We're in a long slog.

"It's going to be this way for a while. We're in a long slog," Shierholz said, noting that the recession of 2007-2009 was the harshest downturn since the 1930s Great Depression.

"We really are in a recovery. Things are getting better," Shierholz added. "It is agonizingly slow. But we are going in the right direction."

It may be quite a while before the jobless rate falls back to 5 percent and below, long the informal standard pegged by economists as a typical employment level for non-recession times.

But 5 percent may no longer be the norm.

In February 2011, economists at the San Francisco Federal Reserve Bank suggested that around 6 percent might be a more appropriate unemployment rate as the "new normal." But some analysts suggested even that target may be unrealistically low.

'Further and Further Behind'

"Our economy is leaving our unemployed folks further and further behind," said Robert A. Funk, CEO and Chairman of Express Employment Professional, an Oklahoma City-based service which tries to line people up with jobs and help client companies find suitable employees.

"But if people quit looking for work at a rate like this, it makes our job much, much more difficult," said Funk, a former chairman of the Federal Reserve Bank in Kansas City.

And while economists note high levels of unemployment among older working-age people, joblessness is disproportionately high among younger workers as well.

Generation Opportunity, a U.S. nonpartisan youth advocacy organization which keeps close track of job levels for younger adults, reported even higher effective unemployment rates for those under 30.

"School is out for summer, and more than four out of five recent grads don't have jobs. My generation deserves better than an economy in which a 15.4 percent effective unemployment rate for 18- to 29-year-olds is considered a good month," said Patrice Lee, director of outreach for the organization.

Even though the overall unemployment rate has been essentially flat since last October and is holding at high levels with 3.4 million Americans counted among the ranks of long-term unemployed, it's been five months since federal emergency unemployment benefits expired, leaving the burden up to the individual states.

The unemployment rate is now back to where it was before the Great Recession. It was 6.3 percent in May, same as the month before.

Still, the share of Americans who are employed is stalled below 59 percent, well below the 63.3 percent peak in March 2007 and 64.7 percent of April 2000, said William Spriggs, chief economist for the AFL-CIO. "That difference represents the multimillion job gap needed," Spriggs said.

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"And they are disproportionately older workers," Van Horn said. "We have a large number of older [unemployed] workers who are not old enough to retire, yet they are facing discrimination in the workplace and have found it nearly impossible to get another job."

This paragraph says it all. Try being in your 40s, 50, or early 60s and try finding a job. Send out hundreds of resumes and not even get an interview. This is age discrimination. But an employer can hire whom ever they want based on age.

June 10 2014 at 3:53 AM Report abuse rate up rate down Reply

Getting back to where the workers went ..My son graduated with a Masters in Jazz /music had student loans couldn't find decent work or afford to live in NYC metro and pay off his loans..So he learned Chinese went to China and went to work at a school where they provided him with a place to live{ no charge} if you sign a 3 month contract as a house band in a jazz club they give the musicians an apartment {no charge},,,dinner for 4 costs about 15 bucks at a decent noodle shop. and on and on...he's managed to pay off his student loans in a year and a half and with all the connections he's made he has been offered a job at the most prestigious conservatory in China. He's saving money now ,,which is near impossible to do here with the cost of living.....Musicians and teacher are treated with RESPECT in China ...just like here ..ahem ..anyway I'm proud of what he's accomplished.....never would have happened in this good old USA.....

June 09 2014 at 11:46 PM Report abuse +1 rate up rate down Reply

The biggest problems is that most places now only want to give people part time jobs ..........which would be fine as long as it is either morning or nights but , noooooooooooo they want you to have open availability so , they can schedule you whenever they like ........Well it don't work that way ......if you only want to give someone 25 hours a week then , these companies need to decide mornings , afternoons or evenings ..........If most people are like me they need to have 2 or 3 part time jobs and they cant have open availability to one company ......

June 09 2014 at 10:29 PM Report abuse +1 rate up rate down Reply

Mean while back at the Ranch ...Detroit gone,millions still outta work ,toyato leaving Calif ,roads & bridges ,Veterns fiasco and we are still talkin about Russia,Afganistan.New, too expensive embassies and we are crumbling .Congress cant even work togeather just collect a paycheck,and our fearless leader just did something illegal ,totally,and we choose to ignore that !What a mess man!

June 09 2014 at 9:50 PM Report abuse -1 rate up rate down Reply

The majority of the few jobs out there are too physically hard for people over 50. The goals set forth for these jobs are based on someone in their 20's and mid 30's. Insurance carriers will be raising their rates for people in fields as the injuries from pulled shoulder's,backs, hernia, and other injuries increase. Too many employers are pretending to be green by saving on propane and pushing off the work of fork lifts off on people that shouldn't be straining themselves.

June 09 2014 at 9:14 PM Report abuse +2 rate up rate down Reply

A large segment of the US population is disgusted with the economic procrastination. People want to get good jobs now, they can't gamble on promises that haven't been fulfilled. With only a few years left before retirement many have lost 5 friggin years to promises an can't risk another promise from nobody! Were tired of waiting.

June 09 2014 at 8:42 PM Report abuse rate up rate down Reply

They are called the baby boomers, we've known about them for 50+ years.

I swear daily finance is written by Jy High students.

June 09 2014 at 8:24 PM Report abuse -1 rate up rate down Reply
1 reply to dencuddy's comment

Jr High*

June 09 2014 at 8:24 PM Report abuse -1 rate up rate down Reply

Back in the early 1990's the people at the unemployment office in NJ were discouraging people from retraining in computer related fields . The Florio who had been governor had encouraged people to get into computers but I guess the people behind the scenes knew visa workers would be taking the jobs. Here it is over 20 or more years later an you can see how education is wasted as fields are pulled right out from you like a rug because it isn't about edcuation it's about how many visa workers an employer can get in the country.

June 09 2014 at 7:56 PM Report abuse +5 rate up rate down Reply

as our EITE LIBERAL leaders continue with their smoke and mirror numbers we will never know the true number of people without a job,thru EPA and OSHA they are trying to completely shut ALL HEAVY industry down in this country,,We are headeddown the path of liberal socialism on a runaway sled

June 09 2014 at 7:49 PM Report abuse +1 rate up rate down Reply
1 reply to whiteoak's comment

The politicians looked the other way and let the heavy industry pollute and burry toxice drums ect because they were getting campaign contributions so they could stay in office and get those fat pensions. Now with the trade deals other politicians are trying to play hero and go after the heavy industry after it has already left the stage. There are no jobs Mr. Politician fix the pollution and have them build modern plants, but do something we need friggin jobs not show boating clowns on stage!

June 09 2014 at 8:05 PM Report abuse +2 rate up rate down Reply

Even the labor participation rate is is inflated. They say the labor participation rate is 62.8 but it is more likely lower since millions are being shoved in the out of the work force collumn to make the unemployment rate appear lower. All the lies and spinning won't solve the deficit but it will cause the recovery to go deeper into a depression.

June 09 2014 at 7:43 PM Report abuse +2 rate up rate down Reply