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Stories Stories Business There are millions of Americans aren’t working. Why?

There are millions of Americans aren’t working. Why?
Written by Mayette Cantila      April 08, 2014    
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There are millions of Americans aren’t working. Why.gif

Call it the million-worker mystery.

A large chunk of American adults are no longer in the labor force. That has left economists divided over how many of them are voluntarily not working—or even looking for work—because they wanted to retire, go to school or take care of family members, versus how many have been forced out because they couldn't find a job.

The financial hit of losing a job and not finding a new one has been devastating, as have her serious health problems

"Almost everyone who's looked rigorously at the numbers thinks both of those things are going on," said Heidi Shierholz, an economist with the Economic Policy Institute, a left-leaning think tank.

What they can't agree on is what is more prevalent—leaving the workplace on purpose or getting left out even as the economy improves.

The distinction is important because it would help economists understand whether the job market is on its way to a healthy recovery, or whether the current unemployment rate of 6.7 percent vastly underestimates how many Americans actually need a job.

The labor force participation rate—or the share of Americans ages 16 or over who are working or have been actively looked for a job in the past four weeks—has generally been decreasing since about 2000. That's happened as an aging population has headed toward retirement and more young Americans have spent time in college before heading into the workforce.

But that drop accelerated after the nation went into recession in December 2007. The labor force participation rate fell about 1 percentage point between 2000 and 2007, from about 67 percent to 66 percent, before dropping an additional 3 percentage points—from about 66 percent in 2007 to about 63 percent today.

That big drop came during a time of incredible economic turmoil, and one problem economists face when parsing through the statistics is that people lead complicated lives that may not easily fit into a box on a chart.

[ Read full article: Millions of Americans aren’t working. Why? ]






Allison Linn
Contributor's Comment
The unemployment rate has been coming down, but there's also been a sharp drop in the percentage of American adults who work.
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