Job Dropouts Lower Unemployment Rate

Here’s a troubling line in the new Bureau of Labor Statistics employment data: “There were 917,000 discouraged workers in December. … Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.”

unemployed-signThat number is down slightly from last year but last month 347,000 workers dropped out, and are no longer counted in the unemployment rate — which makes for a rosier official number.

If those folks were still counted as participating in the labor force (or trying to) unemployment would be closer to 11%, instead of the current 6.7% official rate.

36 thoughts on “Job Dropouts Lower Unemployment Rate”

  1. I do think it’s too early to accept today’s figures as being valid.

    That said, surely the number of drop-outs from the labor force is and has risen largely because of a callous federal public works policy.

    If thinking, caring people do not consider this a failure of government, then we might as well fold-up the tent and head for better places.

  2. From Flatus’ mouth to god’s ear.

    btw, Flatus, if I couldn’t afford a Ferrari I don’t believe I could afford a Ferrari dealership, but thanks. I’m always looking for an alternative to helping people discard unwanted spouses.

    We’re not in the no water chem spill area – that’s a couple hours south of us. I’m not all that familiar with the different alcohols, but it is a methanol compound isn’t it? All the alcohols are solvents – I don’t know a lot about them, but the Google search suggests to me that this is indeed a solvent. Yum, OUCH!!

  3. to your point Flatus (sort of), from Reuters: “The droves of Americans who have abandoned hope of finding a job should make the Federal Reserve hesitant to remove its support for the U.S. economy, according to a study that makes a bold argument for a sustained easy monetary policy.”

    Here’s link to the full study by two Federal Reserve economists, but it’s rough reading for econ amateurs like me.

  4. here’s a worthy read from Center for American Progress marking the 50-year anniversary of LBJ’s Great Society agenda:

    The War on Poverty has not failed us, but our economy has. Our economy and social fabric have changed significantly in the last 50 years. Demographic shifts, rising income inequality, and insufficient access to jobs and education pose new policy challenges. Too often, our public policies have not met the needs posed by these trends. It is time for a renewed national commitment to reduce poverty.”

  5. Craig, I did go through the study by the economists. I won’t pretend that I tried to replicate the math or validate the charts. But, everything must be considered in light of the caveats they present on page 37 regarding force participation.

    I’m glad they highlight those issues as I believe them to be especially of concern during periods such as we are now in.

    Another thing of concern, Ms Yellen must be very careful in her messing with the money supply when we are at such low interest rates; the last thing we need is for the economy to enter into a period of disinflation.

  6. Yellen says her focus at the Fed will be to support job growth rather than simply focusing on keeping inflation low. I’m a simpleton when it comes to monetary policy, but it seems to me that loose money encourages job growth and tight money controls inflation – as a general proposition.

  7. Pogo, I misspoke earlier. I said disinflation when I meant to say deflation. Disinflation is what we have been in the last several years. It gets rid of the excess inflation that makes the economy cranky. Deflation occurs when disinflation is taken too far and interest rates become negative.

    So, if interest rates are negative, is one likely to borrow money to make money?

  8. Chloe

    Nice to see you and read you.. All is going well.. Busy busy time as the snow birds are here.. Weather is holding good here.. Bring on the 90’s, i’m ready, lol…

  9. from bbc

    A senior American official has said the United States is “very open” to building a new relationship with Cuba.
    The main focus of the latest talks was migration: discouraging Cubans from risking their lives at sea to reach the US, by ensuring that there were safe and legal alternatives.
    The talks, which took place in the Cuban capital, were also centred on other topics of mutual interest, including aviation safety, co-operation in counter-narcotics work, protocols on preparing for oil spills, search-and-rescue work, and renewing postal services between the two neighbours.

  10. isn’t some of this discouragement number (“persons not currently looking for work because they believe no jobs are available for them”) due to the continual reduction in local/state/federal government jobs? example would be the big cuts in the education sector meant less teaching jobs.
    the sequester cuts lopped off a lot of jobs that have no equivalent in the private sector. so there’s no place for those specialized workers to go. ergo, the discouraged worker phenomenon,

  11. from wapo

    Ariel Sharon, who had been suffering from vital organ failure, died after lingering for nearly eight years in a vegetative state after a massive stroke, was a monumental figure in Israel’s modern history who epitomized the country’s warrior past even as he sought to become the architect of a peaceful future.

  12. Tonyb,

    Glad to hear business is good, Tony. Just make sure you make time to rest too. Thanks for checking in and letting us know you’re doing well.

  13. You know, Tony, regarding your looking forward to the 90s, I agree. What I like most about the warm seasons is the consistency… knowing what to expect each day. The ease of knowing what to wear (no layers!) and being able to dress lightly and casually. A climate like ours leads us to being very casual, affects every part of our life and attitudes. It’s the life style I prefer. Cool, light clothing and flip flops; sleeping on top of the sheets, at night, with no blanket, that sort of thing.

  14. chloe,

    Yes, yes, your describe it perfectly.. I wear shorts and flip flops, well almost 365 days.. If it gets cooler i put on socks/tennis shoes and throw on a long sleeve shirt.. Casual, you bet and coming from Michigan, what a relief..

  15. There really should be an option for the middle aged to take a “redundancy retirement” where instead of unemployment, they could collect partial social security (or some Congressionally designed fund) in exchange for engaging in volunteer work.

    More and more jobs are going to simply become obsolete. The people need to do something else without taking a major cut in salary that still benefits the whole of society.

  16. I suppose that in times when we had an ‘acceptable’ level of unemployment, somewhere in the three percent range, that there were a number of people who went uncounted, thus making the level actually higher than the official rate. There was at least during those periods a sense that you could find a job before too long, assuming that the economy was creating jobs at a reasonable rate.

    Job losses during this recession and recovery especially in the public sector have pretty much eroded any sense that a job may become available before long. Yes the private sector is creating a few jobs but the public sector is stagnant and it appears that it will remain so.

    The plight of the long term unemployed in this country is not just unfortunate it is a disgrace.
    First we lay them off, in a misguided mission of austerity, and them we take away from them the resources they desperately need in order to find other employment.
    Quite frankly I am surprised that the number of people who have given up looking work isn’t much higher than reported.

    Our country has broken trust with a large portion of it’s citizenry, and come to believe that some how it is sound policy.

  17. The ones who drop out of the labor force I’ve thought are the people who have some sort of perceived alternative—some support from family, living off the land or disability, jobs under the table, something that allows them to survive from day-to-day. Or suicide by despair.

  18. Jamie,

    We wanted to develop a system in our community where folks could bank their hours of volunteer work and then draw on their accounts when they needed help late in life. The motivated organizers kept dying on us.

  19. Chloe, Spidey gal,

    I know that you are always looking for something new to read.

    I don’t read much fiction, but will read this one: “Andrews brain” by E. L. Doctorow: How a brain becomes a mind.

    Reminds me of a movie..or book that i read in the past…where someone got into a car accident…and then mentally described his passing away…in the third person….you know…like that little captians voice inside my cabeza……that can’t stop telling me what to do.

    I did read “Billy Bath Gate” by this Author. He has come out with another book that i will read. Here is a sample:

    It will be (interview) on npr;s all thing considered chicago time 12 pm….followed by my favorite sat program….Michael Feldons….Wadda ya know show

  20. used to like the click and clack brothers “Car Talk” show on npr sat am’s……they clacked me up……later


  21. I like that book b/c it is only half fiction…mixed with what will be facts.

    In 50-60 years from now….there will be no religions…science will prevail.!

    In a few hundred years…or one hundred thousand years from now…..we will all be immortal…..gods….we will understand that we are all gods…..

    We will grow a replacement extra limb, or replace an eye, ear or dna …….

    “Trust me, you’ll be on unemployment. What else can we do as eaters of the fruit of the tree of knowledge but biologize ourselves? Expunge the pain, extend the life. You want another eye, say, in the back of your head? That can be arranged. Put your rectum in your knee? Not a problem. Even give you wings if you want, though the result would not be flying aloft but more like giant skips, floating megastrides as on those tracks that are like flattened escalators moving along the long airport corridors.

    And how do we know God would not want this,

    perfecting his fucked-up imperfect idea of life as an irremediable condition? We’re his backup plan,

    his fail-safe. God works through Darwin.”

  22. If science hasn’t triumphed since the days of Avicenna & Averoes, I don’t think it is likely to triumph in the next millenium, either.


  23. If it weren’t for science….the Western world would not be as we know it…we used science to gain the hold of the worlds throat that we have today.!

    China was way ahead of us in that sense….but they decided to isolate themselves from the world….follow religion..and let the rest of the world get ahead of them…..good thing no?…..we would all be speaking Chinese if they hadn’t stopped to listen to Gods voice……..

    Glad to have you around…….make sure that you pick up the phone when you leave us once in a while……later going to get my daily tun up……looks dark and grey outside….but will bundle up for a quick walk……whats a little grey matter……matter to my little ol brain………

  24. “Get your elbow off my altar !”

    Atta boy.!

    U starting to believe me….U the man.!!!!

  25. Uno mas,


    …what do you think of all this………Religion got your tongue?….I triple dog dare U……….

    Oh, about employment, or unemployment:

    Will they let me join the Marines at age 64-1/2 again……or better yet…..the air force needs a few good old timers no? I am back in school trying to learn a new profession….Hotel Management….but I don’t know if they will take someone my age

    The Big corps have us right where they want us…..low, very low union jobs…not much industrialist work…not much of anything…..but minimum wage jobs…..way to go republicans and democrats…..when ever someone says that you don’t work well together….just doesn’t get it…..they do just fine for themselves…… enslaving us all with the laws passed by the two party system……like….Nafta.

  26. They can’t ask your age. You look presentable, eager, say you’d love to work the night shift, and pretty soon you’ll be in management.

    That methanol in West-by-God. I keep remembering from high school that alcohol wasn’t soluble in water. It’s miscible which means it slides around in between the water molecules. So, how does that affect cleanup? Where is the alcohol? And, quoting Admiral Stockdale, “…why am I here?” To that question, at least, there was an easy answer—Because, Admiral, you were an American hero.

  27. Sitting while the laundry does itself. It’s warm, in the 60s, dismal, raining—more than 2-inches since yesterday. Quite windy. Looks like we’ll get a thunderstorm.

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