Number of labor-force dropouts surges

Unable to find work for months, even years, many stop searching

April 27, 2003|By NEW YORK TIMES NEWS SERVICE

PITTSBURGH - Worn down by job searches that have stretched for months, demoralized by disappointing offers or outright rejections, some unemployed people have simply stopped the search.

As the United States enters a third year of difficult economic times, these unemployed - from factory workers to investment bankers - have dropped out of the labor force and entered the invisible ranks of people not counted in the unemployment rate.

Some are going back to school or getting new job training. Others have chosen to stay home with young children or aging parents and to rely on their spouses' salaries, at least for now. Still others are plainly waiting: living on their unemployment benefits and hoping that the economy will get better in a while.

After working 25 years in the heat of the factory line at a steel plant here, Bill Jacobs accepted his layoff calmly last year. He thought he could find some other job working with his hands.

But eight months passed, and nothing happened. Not long ago, he signed up for nursing school.

"There aren't any jobs, just not any," Jacobs said. "I had been waiting it out. I thought there was a strong possibility that I'd get recalled to the plant, or I'd get something else, anything that paid at least $10 an hour. But it turns out there is nothing. It's a dead-end street."

Jacobs, who is 50 and is raising four children on his own, said he had "absolutely never" planned to change careers. But he heard about the possibility of a government grant to pay for his schooling and decided he would rather spend the next two years tucked safely in a classroom than continue to fight for a job in an economy he describes as "heading nowhere."

During the past two years, the portion of Americans in the labor force - those who are either working or actively looking for work - has fallen 0.9 percentage points to 66.2 percent, the largest drop in almost 40 years.

More than 74.5 million adults were considered outside the labor force last month, up more than 4 million since March 2001, the Department of Labor says. They are people who fall outside the government's definitions of either employed or unemployed: They do not hold jobs, but they have not gone out seeking work within the past month.

The recent dropouts have caused the jobless rate - which was 5.8 percent last month, roughly where it has been for the past year - to offer an artificially sanguine picture, many economists say.

"People use the unemployment rate as some kind of gauge of the health of the economy," said Robert H. Topel, a professor of economics at the University of Chicago. But because of the number of people now outside the labor force, he said, "the unemployment rate does not give you the same kind of information it did in the 1970s or 1960s."

Job counselors say the trigger for the exodus is easy to see. Among those that the government considers unemployed, the average length of time out of work has been rising over the past two years, to 18 weeks last month from about 13 weeks two years ago.

In Pittsburgh, members of one support group for unemployed people have been jobless for so long that the group recently started holding separate conversations at its regular Monday night sessions just for those who have been out of work more than six months. More than 20 people usually show up.

"This is what we see today - job searches that can take six to 12 months," said Charlie Beck, who has directed the support group, Priority Two, for the past 20 years. "By six months, people really start to doubt themselves, and they start to doubt they're ever going to find anything. They start to doubt everything."

Most people dropping out of the labor force are men, the Labor Department says, and the number of black men not looking for work has risen particularly sharply. Teen-agers who were drawn into the labor force in large numbers in the late 1990s have also left it recently at a rapid pace.

Janis M. Leftridge has spent her career first as social worker, then as a human resources manager, handling other people's problems. She is 56, and is a whiz at designing business cards, writing resumes and leading discussions in her networking group about how to get a job. But her last job, with the Bayer Corp., where she says she made $76,000 a year, ended in 2001.

In the two years since, she has emptied her savings account. A week ago, she was cheerily sorting out how she would pay the May rent.

"I'll figure something out. It'll happen," Leftridge said. "But it's funny how, when you're younger, you don't think you'll find yourself in a position like this. I didn't think I'd ever be here.

"I've been trying to find a conventional job for two years," Leftridge said. "Finally, I'm thinking about doing a home-based business. I don't see it as giving up. I see it as expanding my search. I ought to be able to make some money this way, and start building back my savings, in a situation where I'm not hostage to any company's budget, to any budget."

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