WASHINGTON: Where did all the workers go?
The labor force — those who have a job or are looking for one — is getting smaller, even though the economy is growing and steadily adding jobs. That trend defies the rules of a normal economic recovery.
Nobody is sure why it's happening. Economists think some of the missing workers have retired, have entered college or are getting by on government disability checks. Others have probably just given up looking for work.
"A small work force means millions of discouraged workers, lower output in the future and a weak recovery," says Rep. Kevin Brady of Texas, the ranking Republican on the Congress' Joint Economic Committee. "Those are unhealthy signs."
By the government's definition, if you quit looking, you're no longer counted as unemployed. And you're no longer part of the labor force....
The percentage of adults in the labor force is a figure that economists call the participation rate. It is 64.2 percent, the smallest since 1984. And that's become a mystery to economists. Normally after a recession, an improving economy lures job seekers back into the labor market. This time, many are staying on the sidelines...
If the 529,000 missing workers had been out scavenging for a job without success, the unemployment rate would have been 9.3 percent in April, not the reported rate of 9 percent.
And if the participation rate were as high as it was when the recession began, 66 percent, in December 2007, the unemployment rate could have been as high as 11.5 percent...
