The “Missing” Workers of July’s Jobs Report

More than 300,000 people in their prime working years dropped out of the labor market.

By Kai Wright Aug 09, 2010

More dismal data in Friday’s job numbers: Unemployment held steady in July at 9.5 percent, with black and Latino joblessness at 15.6 percent and 12.1 percent respectively. But as Economic Policy Institute stressed, the important point was how many more workers dropped out of the labor market, mostly people in their prime working age (older and younger workers came into the workforce, while more than 300,000 people between the ages of 25 and 54 exhausted benefits or quit looking, and thus didn’t get tallied in the unemployment count). As EPI explains,

To get an idea of the size of the current backlog of missing workers, consider the following: The labor force should have increased by around 3.6 million workers from December 2007 (the start of the recession) to July 2010, given that the working-age population grew over this period. Instead the size of the labor force actually decreased by 309,000. This means that the pool of "missing workers" now numbers around 3.9 million, none of whom are reflected in the official unemployment count. As these workers enter (or re-enter) the labor force in search of work, this will contribute to keeping the unemployment rate high.

Treasury Secretary Tim Geithner has said these workers will obscure the recovery we’re in, because jobless numbers will stay high as they start looking for work again. Ok, except that the number who have given up or timed out of benefits is still growing for the time being. More than 4 out of 10 unemployed have been out of work for more than six months–or, 6.6 million people.