Sometimes it is really easy to get discouraged. This is certainly true for many United States workers today.
Despite the economic recession’s end three years ago, the number of discouraged workers in the U.S. remains stubbornly high. Each month the U.S. Department of Labor surveys thousands of households to ask who is working, who is out of work and who has given up looking for work.
Discouraged workers are defined as civilians age 16 or older not currently looking for work specifically because they believe no jobs are available for them or there are none for which they would qualify. In the most recent Department of Labor survey, there were more than 850,000 workers who have become discouraged and left the workforce.
This number is down from 1.3 million at the end of 2010, but still more than twice the prerecession level of 360,000. Since 2007 the total U.S. labor force has grown by 1 million, but 3 percent of the civilian, working-age population — roughly 7 million people — has quit looking for work.
These numbers can be seen in both a positive and negative light. I guess it depends on how you look at the glass.
Those in the half-empty camp are sure to say that our economy is in bad shape if 7 million people who want to work have stopped looking. You may think that with so many not working, we must be producing less and be worse off for it.
It turns out that despite having fewer workers than we could, production is up and our standard of living is basically unchanged. Output per hour worked is nearly 8 percent higher than before the recession, and real disposable personal income per capita is $32,871 per year, compared with $32,913 at the end of 2007.
Even manufacturing output is higher than expected. Total U.S. industrial production is 3 percent below pre-recession levels, after having dropped 17 percent in 2008 and 2009.
Those in the half-full glass camp see the drop in the labor force as having potential for some positive changes in our country over the long run.
First, the fact that this many people don’t have to work can be counted as a blessing. This segment of our population has sufficient household income to pursue other interests that are valuable for our country — family time, recreation, hobbies or spiritual endeavors.
Second, more and more workers are leaving the workforce to return to the classroom. Here they will upgrade their skills and knowledge. A more highly educated workforce increases productivity, the key to any country’s standard of living. Over time our incomes are likely to rise faster when we know more.
Finally, a drop in the labor force eases the fiscal burden on federal and state governments. Fewer workers are now drawing unemployment benefits, which rose dramatically during the course of the recession, adding to the deficit.
Federal unemployment benefits have dropped from $159.5 billion in January 2010 to only $78.9 billion per month. As reported in the Idaho Statesman this month, the number of Idaho workers receiving unemployment benefits declined to the lowest level since November 2007.
Budgeting less for unemployment payouts allows government to devote resources to other areas of need.
So yes, there are a lot of people without a job who would like to work but have given up for one reason or another. A more optimistic look at this situation provides a long-term perspective that we will all be better off because of it.
Many are discouraged and may need our help, but the employment “glass” is half full.
PETER CRABB Professor of finance and economics at Northwest Nazarene University in Nampa. Contact him at email@example.com.