Unemployment is low — but many aren't looking anymore
The U.S. unemployment rate has fallen to five percent, just half what it was at the end of the Great Recession in 2009. And job creation is strong — with 292,000 jobs added to payrolls in December, according to the Labor Department’s monthly employment report.
But more than six years of economic recovery have failed to fix serious problems, including the large number of Americans in their prime earning years who are not working or even looking for work right now. Long-term unemployment is still significantly higher than at any time before the Great Recession, as well.
There were 8 million fewer Americans aged 20 to 55 working or looking for work in 2014 than in 2004, according to a recent report by economists at the Bureau of Labor Statistics. And overall labor-force participation hasn’t been this low (now 62.6 percent) since the 1970s.
Maija Schurter is 22. She lives in a studio apartment in a suburban neighborhood of Portland, Oregon. The rent is good — which is to say, free. Her parents live in a big house up the hill; Schurter's apartment is above the garage.
Schurter graduated high school in 2011, and started looking for work soon after. “I’ve had seasonal retail jobs, they lasted a couple of months, but that’s basically it,” said Schurter. “I’ve done probably like 150 resumes and applications.”
One year ago, after finishing a short-term holiday retail job at Macy’s, Schurter more-or-less gave up on her job search. Faced with low wages and poor job prospects, many people in their teens and early twenties have done the same. The number of young people not participating in the labor force has risen by approximately one-third since the recession. Most have gone to get more education or training. Schurter enrolled in a pre-apprenticeship program run by the group Oregon Tradeswomen to prepare for construction-union jobs.
“I know I’ll be having an amazing job soon, that has benefits, that can offer me so much more than a typical coffee shop job,” said Schurter. “I’m into a career now, not a job.”
According to Labor Department surveys, there are several prominent reasons prime-age workers (i.e., workers in their twenties through fifties who are not ready to retire) have left the workforce in recent years. These include going back to school; illness and disability; staying home to take care of children and elders; and becoming discouraged by current job prospects and giving up the active job search.
But Ted Maddry, 37, of San Francisco, would fall into a miscellaneous category in those Labor Department surveys: ‘other.' Maddry left the regular workforce in 2007, after working as a well-paid network engineer for a decade.
“I worked for WorldCom MCI — got laid off and then they went bankrupt. Washington Mutual—I worked for them for a few years, got laid off and they went bankrupt.”
That second layoff was in December 2007, just as the recession was starting. With all that bankruptcy swirling around him, Maddry said, “I decided, ‘this seems like a clear sign, let’s give teaching dance a go.’”
For years, Maddry had been dancing as an amateur in competitions and exhibitions. He did swing, ballroom, and blues. He decided to go all-in. He started getting teaching gigs, and eventually began putting on dance events. He performed around the country.
He managed to support himself this way for the next six years. He said the work came in fits and starts — his income fell to less than 20 percent of what it had been in tech and finance. But, he said, “I changed people’s lives. I introduced six couples that got married. I had people leave private lessons with me and quit their jobs, realize what their calling was.”
Still, Maddry had quit his well-paid profession, and he needed new income. He converted the small dance business he’d developed into a nonprofit, and passed on the management to some friends. Eventually, he started looking for work again.
He’s been searching for more than a year now, with no job yet.
“It’s been challenging,” said Maddry. “I’ve seen people react really negatively to my time out of technology, and it’s a rare person that I talk to—especially in HR—who is impressed and appreciative of the work that I’ve done. Maybe they enjoy the story. But they don’t find themselves wanting to hire me.”
Maddry said he’ll take a low-paid service job if he doesn’t find something in technology soon. And chances are, he’ll be competing with ever-more people who dropped out of the job market, and are now trickling back in as the economy rebounds. According to the Labor Department, in December the active labor force expanded by more than 450,000.