A Jobless Rate Still Unaffected by New Hiring
After hemorrhaging jobs for months, the economy is finally starting to add them. Yet the unemployment rate is not really budging because of people like Regina Myles.
Ms. Myles, 51, has been out of work for three years. After a grueling job search yielded 150 interviews but no offers, she simply stopped looking last fall. Then this spring, with a $3,000 government-funded grant to help pay for a training course at a local beauty school in this Chicago suburb, she began applying for jobs online and in stores again.
“I just know if I am given this chance to finish this course I can make it,” Ms. Myles said after practicing a facial on a classmate at the International Skin Beauty Academy. “I feel like it is my time now.”
Millions of people became so discouraged during the brutal recession that they gave up the job search altogether. Some entered training programs to redirect careers; others focused on caring for family members. Some college graduates, despairing of their prospects, enrolled in graduate school, rather than hunt for jobs.
Now many of them are beginning to look for work again, encouraged by four consecutive months of job growth and reports of a strengthening economy. But the initial return to the labor force may prove dispiriting, since so many people are already chasing too few jobs.
Because the government does not count people as unemployed unless they say they are actively searching for work, many discouraged people have been hiding in the shadows.
Heidi Shierholz, an economist at the Economic Policy Institute in Washington, estimates about 2.4 million “missing workers” either left the labor force or did not enter it in the last 28 months. That is on top of the 15.3 million people who are officially counted as unemployed.
Although economists expect the jobs report scheduled for release on Friday to show that employers added perhaps half a million jobs in May, that kind of growth would have to be sustained for some time to absorb the backlog.
“The problem is if they come back into the labor force because they perceive that jobs are being offered again, but they come in at a faster rate than those jobs are really being offered,” said Ian Shepherdson, chief United States economist at High Frequency Economics.
In other words, just because it has rained for a few days does not mean the drought is over.
In April, those people who started looking again helped push the unemployment rate to 9.9 percent, from 9.7 percent in March and close to this recession’s peak of 10.1 percent last October.
If, as some economists predict, the unemployment rate edges up or remains stubbornly high, that could prove a political problem for the Obama administration heading into the fall midterm elections.
To a certain extent, the bad news is also the good news. The fact that people are looking for work again “is a vote of confidence in the overall economy,” said Ken Goldstein, an economist at the Conference Board.
Ms. Myles, who speaks in a low timbre and is quick to smile, is trying to remain optimistic during her renewed job hunt.
After a bitter divorce in 2007, she lost her job managing a tax preparation office that she ran with her ex-husband for eight years. To supplement $900-a-month alimony payments, she applied for everything from secretarial positions to fry cook at a McDonald’s . She tried for so many jobs online, she said, “I think my résumé is on YouTube at this point.”
Last fall, she thought she was finally close to getting hired when she was called back for a third interview for a clerical job at a pharmaceutical company.
When it did not work out, she hit bottom. For weeks, she sat at home, crying and wondering how she would pay her rapidly accumulating bills.
Around the holidays, a neighbor told her J. C. Penney was hiring, and Ms. Myles decided to dip her toe back into the job market. She still did not have any luck, but early this spring, she pulled together the application for a government grant to help pay for beauty school.
When she graduates in October, Ms. Myles expects her new skills will help her find a job. “People have a tendency to figure out a way to do our beauty products,” she said.
In the Chicago area, which lost 360,000 jobs — or about 8 percent of its jobs base from the beginning of 2008 through 2009, according to an analysis by Moody’s Analytics — those re-entering the market confront a sobering landscape.
At a job fair last week in Palatine, another Chicago suburb, Matt Landmeier, a recruiter for Just Energy, a local natural gas and electricity supplier, collected 110 résumés from a line of half-haggard, half-hopeful candidates. A majority told him they had been out of work a year or longer.
Recruiters and economists worry that those who quit the labor force for a while will have difficulty competing with younger workers or people who have been out of work for only a short period.
Even with a robust recovery that creates three or four million jobs in the next year, said Lawrence F. Katz, professor of economics at Harvard, “most of those jobs will go to new entrants and short-term unemployed people.”