So why have they given up then? I mean, if we are to believe what you are saying, and jobs are out there for the taking, then why aren't they applying? Surely they are not all winning the lottery are they? (well, in a sense, with handouts, maybe they are)
There are all sorts of reasons why employers look at applicant’s and continuously reject them. Let’s take a look:
A person loses their job, and if they were fired they have a certain amount of time before their unemployment benefits run out. Before the Federal extension program most states paid for 26 weeks, with a few paying up to a year. In any case, unemployment pays only a fraction of your original pay, so you are dealing with all prior bills with less money.
Now the person submits job applications, usually for employment similar to their prior experience and pay grade. Employers get a lot of applications for jobs and they can’t interview everyone. So they perform triage using applications and resumes. They eliminate candidates if they have prior criminal records, are too old or too young, not enough experience or too much experience, not enough education or too much education, skill-sets aren’t quite what they are looking for, etc., etc., etc.
Time passes and after six months employers use that time factor to eliminate many candidates, because they suspect something is wrong if the applicant has taken that long to find a new job. By this point applicants who have high skills, education, and experience start looking for jobs that are below the level of their prior positions. Employers see this and they eliminate the applicant because they don’t expect them to stay longer than it would take to find a better job.
Starting to get a picture here?
At some point unemployment benefits and/or savings runs out and applicants lose their apartments, or homes. If they are lucky they go live with relatives or friends willing to support them while they keep trying to find work. If not they end up in shelters, or homeless and this makes it almost impossible to find work for many reasons. Others simply end up in under-the-table jobs, day labor, welfare, or crime (drug dealing, theft, etc.).
Economists prefer to ignore this, and simply point to decreasing unemployment numbers as if the economy is recovering. It isn’t, more people are just dropping out of the job market and turning to less savory options.
Neither the government nor these supporting economists want to deal with this so they fudge the figures and hope we just ignore it.
This is only ONE aspect of Hidden Unemployment that government unemployment figures, and economists and statisticians who support "the economy is doing fine" theory don't want us to address. So, as long as a person is "not seeking" then of course they don't count. Meanwhile, we still have 4 people looking for every one job currently available in the USA; so that even without Hidden Unemployment if every available job were filled today, three people "seeking" would still be out of work.