Jobless Recovery
By JON E. HILSENRATH
Staff Reporter of THE WALL STREET JOURNAL
Frances Bernadette Parker ... in the summer of 2002, she had a life-altering decision to make: Leave the company with a buyout package or keep working and end up with more responsibility but not more pay.
"It was more beneficial to me personally and stresswise to take what they were offering," she says.
With that, Ms. Parker became a job-market dropout, one of nearly two million adult Americans between the ages of 25 and 54 who have left the labor force since 2001. These dropouts aren't employed. Nor are they officially unemployed, which is defined as people who are actively seeking work but can't find it. Instead, Ms. Parker and others like her represent a shadow phenomenon of the jobless recovery. Some, though not all, are so discouraged they've stopped looking. Others, like Ms. Parker, are taking early-retirement packages or they are going back to school, collecting disability, moving in with family or taking care of loved ones. The common denominator for many is that the slow-growing job market is forcing them to change.
Of course, there have always been large numbers of working-age Americans who don't work for a paycheck, for a wide variety of reasons. But their numbers have risen to 75 million from 70 million during the past three years, and they include many who don't fit into the traditional categories. And the percentage of working-age Americans between 25 and 54 who are either working or looking for work has fallen during the past year below 83%, to levels last seen in the late 1980s. Among college graduates, the labor-force-participation rate was 78.4% in January, down from 79.7% in 2001. For the population as whole -- including teens and adults older than 54 -- the participation rate had fallen to 66.1% in January from 67.3% at the height of the economic boom, marking the largest and most persistent decline in labor-force participation since the early 1960s.
Some economists believe such numbers are helping to hold down the unemployment rate by taking people who would otherwise be classified as unemployed out of the labor force. The jobless rate fell to 5.6% in January from 6.3% last June. |
