Workers continue to drop out of the workforce

Despite the fact that the unemployment rate fell to 6.7% in December, the first time it’s been below 7% in five years, experts contend if you stop there you have buried the lead. The real story, reported by CNN this week, is that the employment rate fell because many workers who have been out of the workforce for years have simply dropped out of the labor force and are no longer looking for work. And the catch: these workers are no longer considered unemployed by the Labor Department.

How many workers dropped out of the workforce?


According to the Labor Department, in December alone, 347,000 people dropped out of the workforce. This means only 62.8% of workers are participating in the labor force, the lowest level since 1978 when President Jimmy Carter was in the White House. Experts, contend, however, the story may be even grimmer since the number of women participating in the labor force is much higher than it was in 1978.

Why are so few workers able to find employment? One reason is employers are failing to add a sufficient number of jobs each month. For instance, in December, the Labor Department estimates a paltry 74,000 jobs were added, much less than expected.

Next, there are many teenagers who could be working but who are not or who have stopped looking for work. In fact, the participation rate for teens is at an all time high. Demographics are also changing and many baby boomers have left the work force or have been laid off and have been able to find work at a comparable salary level.

Finally, experts also suggest there is a growing disconnect with the types of jobs offered, such as those in the technology field, and workers who have the right skills to work those jobs. In some areas of employment, for instance, there is a glut of possible work and not enough workers to do the work.

Long-term unemployment causes discouragement


Another issue facing the unemployed is the lack of ability to find work if a worker has been unemployed for an extended period of time. For instance, the average unemployed worker has been out of work for 37 weeks but the longer they are employed the less chance they have of finding a job. Additionally, it’s natural for many workers to become discouraged after months of rejection.

Finally, even if workers are able to find work, much of the work has been temporary or seasonal and after a few months they are back on the streets looking for work. CNN reports that in “December, 55,300 of the jobs created were in the retail sector, many of which were seasonal hires. Another 40,400 jobs were added in temporary help services.”

Construction employers also eliminated an estimated 16,000 jobs and the government also trimmed 13,000 jobs.

So what do you do if you are unemployed? While the advice to the unemployed is varied, many experts suggests volunteering, taking classes and networking can be the key to finding employment.

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Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.