Correction:
This article on the nation’s hidden labor force incorrectly said that counting this group would have boosted February’s unemployment rate to 10.5 percent, from the more commonly cited 8.9 percent. In fact, counting the more than 6.4 million people who say they are not looking for a job but want to work would have raised February’s jobless rate to 13 percent.
Overshadowing the nation’s economic recovery is not only the number of Americans who have lost their jobs, but also those who have stopped looking for new ones.
These workers are not counted in the Labor Department’s monthly unemployment rate, yet they say they are willing to work. Since the recession began, their numbers have grown by 30 percent, to more than 6.4 million, amounting to a hidden labor force that could stymie the turnaround.
Adding these workers to February’s jobless rate pushes it up to 10.5 percent, well above the more commonly cited 8.9 percent rate.An even broader measure of unemployment, which includes people forced to work part time, stands at nearly 16 percent.
Economists say the longer these workers stay out of the job market, the harder it will be for them to find employment, creating a vicious circle that can spiral for months or longer. Meanwhile, their delayed entry into the job market means smaller paychecks in the future. And if these ranks remain high, economists worry that it will signal a much deeper and more troubling problem for the country: Workers’ skills don’t match the jobs available.
“It can be a self-reinforcing problem, where it just gets worse over time,” said Burt Barnow, an economist and professor at George Washington University.
Part of the reason these workers are not factored into the unemployment rate is a technical quirk: Workers are counted as unemployed only if they are actively job-hunting. Otherwise, they are considered outside of the labor force altogether.
That means Silver Spring resident Dirk Bos, 42, isn’t technically unemployed, according to the government’s definitions, even though he hasn’t worked since he was laid off from his position as a construction administrator at an architecture firm in 2008.
Bos said he knew he didn’t stand a chance of finding a new job in his field. The housing market has been in turmoil, and his firm went through two more rounds of layoffs that included some of its top principals.
“Rather than turning around and getting straight back out to the workforce, both of us [Bos and his wife] said, ‘Let’s take it easy. Take it one day at a time,’ ” he said.
For now, Bos is relying on his wife’s income and on savings to make ends meet. He plans to begin looking for a job eventually and is applying for school in hopes of launching a new career as a librarian.
“You hope in two or three years that things might change,” he said.
People like Bos have historically made up just a sliver of the 86 million Americans who aren’t part of the workforce, most of whom are are students, retired or stay-at-home spouses. But since 2007, the number of people who want a job but aren’t looking for one — the hidden labor force — rose from 4.7 million to more than 6 million. Making ends meet can be a struggle, as they do not qualify for unemployment benefits.
Over a million members of this group have given up looking for work even though they are able to hold a job — people officially designated as “discouraged.” That’s more than double the number at the start of the recession.
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