The Economy's Hidden Unemployed

The New York Times has a timely article that looks at a phenomenon that I suspect is all too prevalent and which causes unemployment figures to understate the extent of the number of workers who are unemployed through no desire of their own. For older workers and laid off professionals the job search becomes most depressing as they are told they are over qualified and many other code words for the fact that in their late 40's or in their 50's they are considered too old. I have had the experience myself with the added down side that I am gay and not closeted professionally. The consequence is that no local larger firm will have an openly gay partner and firms out side the area seek generally attorneys with 3-5 years experience or attorneys with huge amounts of portable business - something not realistic for attorneys in this area where there are few large regional or national clients. Discouragement becomes depression and finally one stops looking. In my case, I opted to stick it out in my own firm and market to niche markets ignored by most of the competition to tide things over until the economy recovers. But I digress. Here are highlights from the New York Times:

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They were left out of the latest unemployment rate, as they are every month: millions of hidden casualties of the Great Recession who are not counted in the rate because they have stopped looking for work. But that does not mean these discouraged Americans do not want to be employed. As interviews with several of them demonstrate, many desperately long for a job, but their inability to find one has made them perhaps the ultimate embodiment of pessimism as this recession wears on.

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The official jobless rate, which garners the bulk of attention from politicians and the public, was reported on Friday to have risen to 9.7 percent in August. But to be included in that measure, which is calculated by the Bureau of Labor Statistics from a monthly nationwide survey, a worker must have actively looked for a job at some point in the preceding four weeks. For an increasing number of people in this country who would prefer to be working, that is not the case.

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In the most direct measure of job market hopelessness, the bureau has a narrow definition of a group it classifies as “discouraged workers.” These are people who have looked for work at some point in the past year but have not looked in the last four weeks because they believe that no jobs are available or that they would not qualify, among other reasons. In August, there were roughly 758,000 discouraged workers nationally. . .

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If the unemployment rate were expanded to include all marginally attached workers, it would have been 11 percent in August. But even this figure is probably an undercount of the extent of the jobless problem in this country. There are about 1.4 million more people who are not in the labor force than when the recession began.

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“There are thousands of people applying for every job I’m looking at, and potential employers won’t even give me the courtesy of acknowledging I applied,” he said. “The entirety of that causes me not to bother. It’s a waste of my time and theirs.”

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Needless to say, many of these unemployed have also joined the ranks of those lacking health insurance and therefore have been hit with a double whammy. I suspect many voted for Obama hoping for change - something he has failed to deliver to date.