Christopher Leonard

Frustrated Job Seekers Calling It Quits

New York. Many jobless people have reached a conclusion that captures the depth of the unemployment crisis: Looking for a job is a waste of time.

The economy is growing. Yet it is creating few jobs. That is why in the past eight months, 1.8 million people without jobs left the labor market.

Barbara Bishop of Atlanta last month joined their ranks. Her decision came seven months after she quit a public relations job that seemed about to be axed. Sending out resumes got her nowhere. So Bishop made a list of her skills and decided to launch her own business. “I don’t want to look any more,” she said of the job hunt. “It’s become very discouraging.”

The US unemployment rate is 9.7 percent. But so many jobless people have quit looking that if they are combined with the number of part-time workers who would prefer to work full time, the “underemployment” rate is 16.5 percent.

Their outsize numbers show that even though the economy is growing, the job market is stagnant. Employers remain reluctant to hire.

The exodus did halt in January, when a net total of 111,000 people re-entered the job market. But 661,000 had left in December. And the overall trend since has been people leaving the work force. “It’s very unusual,” said Mark Zandi, chief economist at Moody’s Economy.com. “At this point in the business cycle, we should be seeing some sort of labor force growth. Layoffs have abated, but there really has been no pickup in hiring.”

Job creation was stronger early in previous recoveries. And jobless people responded by streaming back into the labor force. Even before the 1990-1991 and 2001 recessions ended, for instance, more people entered than left the job market, according to an analysis by Moody’s Economy.com. The work force did shrink after the severe 1981-1982 recession ended — but not as severely as it has this time.

Some workers are concluding that it is more practical to return to school, start a business or care for their kids at home until the job market improves.

Those leaving the work force have been beaten down by the competition for few jobs. A record 6.4 unemployed Americans, on average, are vying for each job opening, according to the most recent Labor Department data. That is up from 1.7 jobless people per opening in December 2007, when the recession began. And a record 6.3 million people have been jobless for at least six months.

Even if the economy continues growing this year, it will not likely recover many of the 8.4 million net jobs that vanished in the recession. Economists say the nation would be fortunate to get back 1.5 million of those jobs this year.

The economy would have to grow at an average rate of 5 percent for all of 2010 just to lower the average jobless rate for the year by 1 percentage point. Yet most analysts think the economy will grow 2.5 percent or less for the year.

That leaves workers hunting for jobs that the economy will not likely create for months or even years.



Associated Press

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