November 14, 2014

More and more Americans are outside the labor force entirely. Who are they?

FT_14.11.12_laborForce_200pxAccording to the October jobs report, more than 92 million Americans — 37% of the civilian population aged 16 and over — are neither employed nor unemployed, but fall in the category of “not in the labor force.” That means they aren’t working now but haven’t looked for work recently enough to be counted as unemployed. While that’s not quite a record — figures have been a bit higher earlier this year — the share of folks not in the labor force remains near all-time highs.

Why? You might think legions of retiring Baby Boomers are to blame, or perhaps the swelling ranks of laid-off workers who’ve grown discouraged about their re-employment prospects. While both of those groups doubtless are important (though just how important is debated by labor economists), our analysis of Bureau of Labor Statistics data suggests another key factor: Teens and young adults aren’t as interested in entering the work force as they used to be, a trend that predates the Great Recession.

By far the biggest chunk of people not in the labor force are people who simply don’t want to be, according to data from the monthly Current Population Survey (which the BLS uses to, among other things, calculate the unemployment rate). Last month, according to BLS, 85.9 million adults didn’t want a job now, or 93.3% of all adults not in the labor force. (All of the figures we’re using in this post are unadjusted for seasonal variations.)

FT_14.11.12_laborForce_310pxBut let’s look in particular at the youngest part of the eligible workforce. The share of 16- to 24-year-olds saying they didn’t want a job rose from an average 29.5% in 2000 to an average 39.4% over the first 10 months of this year. There was a much smaller increase among prime working-age adults (ages 25 to 54) over that period. And among people aged 55 and up, the share saying they didn’t want a job actually fell, to an average 58.2% this year.

People 55 and over do, as you might expect, account for more than half of the 85.9 million adults (as of October) who say they don’t want a job — about the same percentage as in 2000. But the 16-to-24 share has edged higher, while the 25-to-54 share has slipped. That could reflect more young adults staying in or returning to school rather than chancing a tough job market.

Women are more likely than men to say they don’t want a job, although the gap has been narrowing — especially since the Great Recession. Last month, 28.5% of men said they didn’t want a job, up from 23.9% in October 2000 and 25.2% in October 2008. For women, the share saying they didn’t want a job hovered around 38% throughout the 2000s but began creeping up in 2010, reaching 40.2% last month.

Researchers disagree about why people leave the labor force and how likely they are ever to return. In a report issued in February, the Congressional Budget Office estimated that about half the decline in labor-force participation was due to long-term demographic trends, a third was due to cyclical weaknesses in the labor market, and the rest a consequence of “unusually protracted weakness in the demand for labor [which] appears to have led some workers to become discouraged and permanently drop out of the labor force,” such as by taking early retirement or signing up for Social Security disability benefits. But two Federal Reserve economists have argued that cyclical factors, rather than demographic shifts, account for the bulk of the drop in labor-force participation since 2007.

marginally_attachedEconomists are especially interested in the subset of non-participants who are considered “marginally attached” to the labor force. Those people aren’t counted as unemployed, because they haven’t looked for work in the past four weeks, but they have job-hunted sometime in the past year and say both that they want a job and are available to take one right away. Many labor economists believe marginally attached people are most likely to be drawn back into the labor force.

The number of discouraged workers — those who’ve not searched for work recently because they don’t think they’ll find any — spiked during and after the Great Recession, peaking at 1.3 million in December 2010. Though that number has come down since, October’s estimate of 770,000 discouraged workers was still well above pre-recession levels, which typically hovered around 400,000 to 500,000.

But discouraged workers make up only about 35% of all marginally attached workers, and account for just over half the increase in their ranks since the 2008 financial panic. The rest of the marginally attached cite a range of reasons for not having looked for work recently, including family responsibilities, being in school, ill health, and problems with child care or transportation.

Topics: National Economy, Work and Employment

  1. Photo of Drew DeSilver

    is a senior writer at Pew Research Center.

53 Comments

  1. Anonymous5 months ago

    retited Senior ciizen spanith in jachsonville ready to start working in simples jobs I have car to go tp the job . I am waitingt affeert

  2. Ilne12 months ago

    Hi. Very good research effort here. Another reason for the high number of working-age Americans is that many realize the high personal cost of being employed. Taxation, of one kind or another, has been steadily increasing. When 1/3 or more of a person’s income (their labor) is ‘siphoned off’, they arrive at a clear understanding or sense that they have become enslaved by their government. Instead of working they do everything they can to remain unemployed–living with family or friends, working under the table for cash or trade, going on government assistance (food stamps, low income rent, social security), etc; and, in many cases become homeless wanderers. Many an intelligent person is in this categorgy. Another reason beyond the taxation one it that most of the jobs available to Americans today are of a type (service industry, e.g.) that do not provide a sense of some saving grace that lifts their sense of worth beyond that of being a tax-slave. American government, at most if not all levels, has lost its direction, often acting toward its people as if they are a body of slaves, who need to be ‘benevolently’ coerced or outright forced (IRS, EPA, e.g.), as if they are an enemy, into whatever the governing agencies (in concert with corporations) determine is the best work scenario for the public at large (this being both a form of oligarchy and facism); this is an additional reason for many who have dropped out of the work force. Quite a social tragedy; people who would be helping to re-establish the vitality of American economy if it were not for the problems of oppressive taxation, long-term inflation, and errantly governing ideas and policies. 🙂

  3. Chris Moos1 year ago

    It would be interesting to see how this same research stacks up for a year later in 2015.

  4. Bill Ruzik2 years ago

    How about all those folks miliking disablity. Know a girl that was in the army for 3 years and now gets 1000 a month from uncle sam and free health insurance for life. Sh had a knee problem before she entered the army and hid it in order to get in and then later got discharged for the same reason. No reason she can’t get a job except it is easy to live at home with mom, She got out of the army 15 years ago and goes to the gym to work our everyday. Maybe she can’t run but she walks totally fine with no paint per her own admittance.

  5. Christine2 years ago

    The majority of available jobs are in sales, food service, office administration, etc. In my experience, people are overworked in these dead end jobs. They are often not shown respect, appreciation, or concern for their wellbeing, and the work is not meaningful, it does not fit with their values. Who wants to work in these conditions?

    Personally, I am always trying to come up with an out for myself. I believe that our dissatisfaction with our overworked lifestyle has become a catalyst for the DIY and homesteading movements. People want to be self-sufficient and they don’t necessarily need to hold down a job to achieve that.

  6. Larry St Croix2 years ago

    Anybody over 55 who is currently unemployed is unlikely to get any response whatsoever to job applications no matter how diligently they search or how rotten the job is. You are either considered overqualified or just old.

  7. Fundraiser2 years ago

    I’ve been looking for employment, even part time, for more than a year. I have an excellent resume as a senior development officer for not-for-profit organizations – but reading between the lines of interview questions I sense that potential employers see me as too old (66 – but look longer and am physically fit.) I am also a minority in a field where most senior staff are still Caucasian. Or there is some element of my being that is “not like them” albeit irrelevant to the task at hand. I had an interview with an Executive Director who lamented going through 3 development directors in less than 3 years, praised my experience, yet passed on me in favor of hiring a catering professional to serve as his chief development officer. Others have hired staff with far less experience but shared hobbies/pastimes/interests with their supervisors/CEOs. Not in every case, of course, but certainly several instances.

  8. Janna2 years ago

    How did you manage to research and write this article, Mr. DeSilver, without mentioning that welfare and unemployment benefits are being offered WITH NO REQUIREMENT to look for work, and that these benefits CAN offer a family up to $ 60,000 per year in freebies. Certainly you must have encountered the “Why SHOULD I work factor” in your research??

    1. Larry St+Croix2 years ago

      Janna

      Welfare and Unemployment Insurance are two completely different programs but they both have limits on the period of time for which you can receive them, normally six months for UI and 2 years for welfare.

      UI is state administered within Federal guidelines & I don’t know a single state that does not have a work seeking requirement to receive unemployment benefits. If you work, you should know that a payment of a percentage of your earnings is made by your employer to the state for Unemployment Insurance. It is not a freebee. A premium has been paid for insurance which you can utilize just like any other insurance when the need arises, if you qualify.

      It is a part of your remuneration package albeit a largely hidden one unless you live and work in one of the few states who require a co-payment from employees.

      Your state sets the amount you can claim, usually 50% of your average compensation. In Michigan (I believe) the maximum is currently $320 a week for 26 weeks which adds up to a whopping taxable $16,640 p.a. or roughly $8 per hour for someone who has been earning in excess of $33K a year. If you earned less you will get less.

      Nobody chooses to stay on UI at 50% or less of their previous income if they have any other option.

    2. Al1 year ago

      Janna,

      Do you believe that most people are inherently good or do you believe that they are all fallen and need to be saved? I’ll bet you believe they all have to be saved. Namaste.

    3. Anonymous5 months ago

      In Louisiana you must make 3 applications and 3 contacts each week plus go to Career Solution Center for appointments at 2 weeks, 6 weeks, and 12 weeks of qualifying for benefits. All for a maximum benefit of $247 a week. No I don’t want to be unemployed! I do refuse to be a slave as the comment above stated. I have been gainfully employed for 42 years of my life. ANSWER RAISE THE MINIMUM WAGE!! WHY?? According to a federal website when I googled “How many Americans are on Government Assistance?”, 110 MILLION draw government assistance that equals to $20 an hour. Hope this answers your question.

  9. Katy2 years ago

    Why is child care not classified as “family responsibilities”?

  10. Joe Bob2 years ago

    I always wonder if they count the self employed. Artists, tradespeople, craftsmakers, and so on. We get no paycheck or Fat retirement by the city/county/state.
    We work hard for a small amount. Of course there are always the success stories of the self employed who scores bigtime, but it is few.

  11. Roland Herberg2 years ago

    You are thinking, Barbara Garrett, kind of unusual, Congrats.

  12. Roland Herberg2 years ago

    This is a surprising number. It raises a number of questions:
    1.] What is their source of support (food, shelter, healthcare, transportation, etc.)?
    2.] How does this contribute to the heated income distribution statistics?
    3.] Are normal married women taking care of the home and children included?
    4.] Are longer term trends data available such as during our highest employment periods?
    5.] How much impact does this have on our tax revenue and our federal & state budgets?
    6.] How does this compare to Germany, England, Sweden, and Canada? (untraumatized economies)

  13. Razor Boy2 years ago

    They are participating in the underground economy (they do ca$h business).

  14. CKeller2 years ago

    Question should be: If a person just does”not want to be in the workforce”, why is government providing the programs and support that enables them to do this? The number of “Makers”; those who are responsible or at least trying to be productive: versus the “Takers”; those who really have no reason to do their fair share: has been allowed to be too even. A society cannot advance or flourish when there is no impetus to participate.
    We really do need to have the debate of “What is the role of government”. When municipal and other governmental budget costs for Pensions and Benefits equal 50% to 75% there is a problem. When someone can survive while just not wanting to participate there is an issue.
    The tale of the grasshopper and the ant is coming to life.

    1. Anonymous5 months ago

      What is the tale of the grasshopper and the ant?

  15. Bob Wootten2 years ago

    Good, understandable presentation of the data.

  16. Chas2 years ago

    Poverty has become a viable career choice for millions. Besides, Mr. Obama is busy giving away American jobs to illegals so there are no jobs.

    1. Joe Bob2 years ago

      Baloney…. the only jobs most illegals get are the ones the legal population won’t do.

      1. Telly2 years ago

        Absolutely incorrect. Fully 67% of all people who have been placed in jobs in the past 6 years have been legal or illegal immigrants according to the Center For Immigration Policy. This isno accident. Obama is flooding the country with Communist supporters from Mexico (where the Communist party is very strong and growing) and he is ensuring that they are rewarded with jobs in America. Why do you think so many jobs have a Spanish language or union requirement? Americans are simply being impoverished and disenfranchised by this administration in order to import a new voting base.

        1. sue2 years ago

          Makes a difference when one doesn’t have to pay taxes and still can qualify for various benefits. Any wonder Americans aren’t overly keen about working low wage jobs – that offer no health benefits. Mess up your health, and good luck finding another job.

  17. Patrick Venton2 years ago

    The most of them are working . They feel and are probably holding the belief that they are not making enough compared with the registered workers to bankroll the bureaucracies that are all lined up and make money rather than working for it. At the end of the day Uncle Sam is the big loser and the middle men or money makers not the workers are causing it.

  18. Gloria2 years ago

    This goes along with trickle down stupidity. When you cut of a large portion of society you also decrease the tax base for that community. Rich people don’t buy enough gas to help fix bridges or rebuild roads. Nor do the buy enough houses to help pay for city and county taxes that pays for police officers and firemen salaries.

    1. Mike Hihn2 years ago

      Look deeper into “trickle down stupidity” and you’ll see that the rich now subsidize 40% of the entire personal income tax burden for the core middle class ($40-$99k) That subsidy is up sharply, from “only” 25% before the Bush Tax Cuts (2000). So, since we’ve shifted massive amounts of tax dollars to the middle class, who spend more on consumption, then we must be in a boom. This is all from official IRS data.

      http: //tinyurl. com/3v53nhw

      Also see the average tax rate paid by the $50,000 secretary — who President Obama says pays a higher rate (at 8%) than millionaires and billionaires (at 23%). Could the economy survive with even greater subsidies to the middle class? Or would we revert to the postwar economy of 5 back-to-back recessions in only 16 years?

      1. enkelin2 years ago

        Billionaires don’t pay income tax, they pay capital gains taxes which are 10% and 15% depending on the length of time they are held.

  19. Doug Scott2 years ago

    YES PEOPLE ARE ENJOYING OBAMA’S GIFT OF FREEDOM TO ENJOY POVERTY

  20. Jacques de Guise2 years ago

    I currently live in Europe, in France in fact, and people who are unemployed are generally helped by the State with the numerous resources available. Besides the fact that these are generally very generous aids, we still have poverty here and have a 10% unemployment rate.

    Question: how do people in the United States go without receiving pay for work? Many of my fellow colleagues in the US tell me about many of the fringes of society having to work in fast food companies to make ends meet or just as bad, for certain people to have two or even three part time jobs.

    1. Sunrise2 years ago

      What do you mean by ” how do people in the United States go without receiving pay for work?” Do you mean how do people live without working? I honestly wonder that myself and I was born here. Though, I am curious to hear why someone thinks that working for a fast food company is such a bad thing when it may be the only thing one is qualified to do. And if someone can’t find full-time work, why is it so bad to have several part-time jobs. There is nothing wrong with having a good work ethic and the desire to be self-motivated to live on one’s own earned funds. Sometimes things aren’t always what they appear. I know people who had great jobs but lived beyond their means. Perhaps went into credit card debt over frivolous purchases. So, they took on additional part-time jobs to make ends meet. And that’s okay. At least they had enough pride to pay their way out instead of walking away for someone else to pay for their irresponsible way of life. That said, there is nothing wrong with needing a “hand-up” when someone is down, but to make it a lifelong “hand-out” is reprehensible here. (Though there are those here in the US who make a living doing just that. Wouldn’t work a day in their lives if they can take my tax dollars to buy alcohol, cigarettes and junk food)

      1. LLB2 years ago

        The very very wealthy get millions in “handouts” in tax breaks every single year, which the rest of us pay for. Not to mention the fact that we pay for the SNAP that some people’s employees need in order to eat because they don’t want to pay those people what it costs to live in this society…oh, and we don’t think those people’s labor, those people’s time, those people’s LIVES, aren’t worth more than about seven bucks an hour.

        We just don’t call it a “handout” when the very very wealthy receive free money from people poorer than they are. The less the person NEEDS the money, the more they are just entitled to it because they’re just better people than we are. The more the people need the money, even if they are working for it, the more it’s a “handout” and should be withdrawn, because we consider them inferior and don’t believe they deserve anything at all.

        1. Joe Bob2 years ago

          Ah, to be a Republican Fat Cat.

        2. Mike Hihn2 years ago

          Check federal income tax data and we see the exact opposite. The rich are heavily subsidizing the middle class in personal income taxes — 40% of their share, and that’s on reported income only.

          http: //tinyurl. com/3v53nhw

          Now consider tax loopholes and exemptions available to ONLY the middle class — capital gains on residences, capital gains at death, employee benefits, gains on $20 TRILLION of pension funds. (Pensions and their gains, even if fully taxed at retirement, still require government to borrow the working-year tax losses, currently interest costs on prox $1 trillion a year income, so also a middle-class subsidy.

          1. leigh512 years ago

            What are you talking about on these capital gains on residence & death that the middle class get??

  21. Barbara Garrett2 years ago

    This report does not specify from where the data comes. I would then assume this data uses only figures from a state employment facility coupled with data from the census of the age groups cited, which means those that are not “in the labor force” could be out looking for jobs on their own. I am unsure how the data for the ‘not interested’ statement of this study was collected.

    1. Drew DeSilver2 years ago

      Each of the charts (as well as second paragraph of the post itself) clearly states the source of the data: the Bureau of Labor Statistics, which uses the monthly Current Population Survey to generate the numbers.

      1. Telly2 years ago

        Which is being enormously manipulated by this administration. For one thing, all part time and temporary jobs are counted as regular jobs. This was not the case before the Obama administration.

  22. Cin452292 years ago

    I would like a better explanation of how these people are able to survive. Are they living with parents? Do they have a trust fund? To me, if one is unemployed and if one has no interest in working, then the next questions are: how do you pay for food?; how do you pay for rent?; and how do you play for utilities? Without some plausible answer to these basic questions, I wonder about the reliability of the underlying research.

    1. Bald eagle2 years ago

      Savings dividends are much higher, Roth IRA’s pay no taxes.

      1. Never Retiring2 years ago

        The money in Roth’s has already been taxed.

    2. themanrighthere2 years ago

      Sell drugs… like it or not gonna drugs are big biz here the state’s.

    3. Mitch12 months ago

      I know a lot of kids in their 20’s some older in their 40′ s that the parents are enabling them and not making them get a job! My daughter just kicked out a 25 year old room mate who wouldn’t get a job. Factory and fast food were beneath her. So her mother took her in

    4. Kevin10 months ago

      What are they doing to survive? Simple. The numbers of individuals receiving public assistance has risen sharply, over the same time frame. There were over 47 million on food stamps in December of 2012. I wouldn’t be surprised to see that public housing and welfare use has increased during this time as well. Current numbers are near 5 million for public housing and nearly 110 million on some type of welfare (that doesn’t include Social Security, unemployment or veteran benefits).

  23. biologist2 years ago

    I see nothing that accounts for parents making the decision to be a stay-at-home parent at this point in their lives, whether due to personal plans, expensive costs of child care, etc. And there are several public sector employers who allow for retirement as early as age 55. How are those retirees accounted for as the portion of the population over the age of 16? gaps in data collection or methodology or a gap in the reporting?

  24. Jeff Harpell2 years ago

    This situation sounds like a time bomb. Who knows when it’ll go off?

  25. Packard Day2 years ago

    Let me state the obvious: Assuming one has available resources and/or an alternative source of household income, then NOT working is the preferred option. Who, if they could, would not wish to avoid the daily long commute to a dreary cubicle and a dead-end job where they are constantly answering to a multitude of mindless Dilbert like supervisors? For many, less is definitely more…if you have the means.

    1. MDC2 years ago

      Well stated.

    2. kidneystones2 years ago

      re: Packard. Thank you for your question: “Who, if they could…?” Anybody, who values work over doing nothing. Speaking as someone who has done both: done nothing, and done the jobs you dismiss: stacking lumber, sorting parts, carrying hods, washing dishes, to name but a few, I can say that doing something is almost always better than doing nothing. First, I’m paying my own way. Second, I’m adding a fingernail of productivity to the efforts the net economy, Third, I have something to put on my resume other than: couldn’t be bothered. In some communities employers are permitted to exclude the unemployed from applying for jobs, which would appear to be a rather major problem for those “waiting for the right job to come along.” I’ve since taught in major universities, including one MBA program, worked for international companies and currently work as a historian of business and the arts. All work has honor. Anton Kuchner surprised me, at least, by noting that he’d never done a job he was better than, and that included some I’ve done myself. One friend mastered a foreign language and completed his certification in tourist management via distance learning during his own long commute. Frugality and a keen study of the business environment allowed him to own the first of several homes and live the life of his dreams within a decade. So, there’s that.

      1. Sunrise2 years ago

        Touche!

    3. John2 years ago

      it would be great if one in three Americans were so rich that to be free to choose whether to work or not.
      Unfortunately, there is a fact that demonstrates unequivocally the opposite, that they do not work mostly because there are no jobs available (look at the 35% of “ex-unemployed” discouraged in last table).
      If the newly unemployed were those by choice, workers become irreplaceable for those who pay them, and their wages and working hours would have to increase substantially.
      But the statistics tell us the opposite: wages are stationary or declining almost everywhere, and especially that many workers would be willing to work full-time rather than part-time, but must adapt to part-time because there is no alternative.

    4. Observer2 years ago

      Those “means” often are government welfare programs. Why work when one can coast for “free”? Millions upon millions do it.

      1. LLB2 years ago

        You are aware, right, that huge limitations were placed upon “welfare” something like 20 years ago? You can only be on welfare a total of 5 years and that’s it.

        In our state, you have to be absolutely the POOREST OF THE POOR to even get close to qualifying for welfare, and the benefits are ridiculously pitiful.

        I don’t know how people think that everybody on welfare is riding around in a Cadillac. *SMH*

        1. Telly2 years ago

          Not true. I have known people who have been on welfare for generations. You’re referring to new welfare recipients who are now time limited – at least on paper. According to the Senate Budget Committee there are over 83 different welfare programs, and they constitute the single largest expense in the U.S. budget – about 22% of total outlay. About 30% of the country now collects some sort of welfare and we have open borders. How long do you think it will take for this country to crash just like the Soviet Union?