Tags: America | Shadow | Labor | jobs

‘Shadow’ Labor Pool: 86 Million Americans Without a Job and Not Looking for One

Thursday, 03 May 2012 02:24 PM

How are the housing crisis and the jobs crisis related? If you think this is a story about income security, you’re right — but not the way you think.

The strongest similarity between the housing mess and our continuing unemployment problem is the size of the “shadow” inventory: too many empty houses, too many idle people.

In the case of housing, it’s hundreds of thousands of homes that have yet to be foreclosed upon and sit off the market. We know they’re out there, but there are no buyers, so no listings. Why pay a real-estate agent to scare up non-existent prospects, even with mortgages rates hitting record lows?

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

CoreLogic, a housing stats firm, puts the number of unlisted, likely future foreclosures at 1.6 million — about six month’s supply of homes in a “normal” market. That’s on top of homes already in foreclosure or currently listed for sale.

On the jobs side, the shadow inventory is what the government calls either “marginally attached” or “discouraged,” folks the feds decided to stop counting in 1994.

There’s 86 million of them, reports CNN. Some of these “forgotten” 86 million are older Americans. Many are recent college grads, teens, or working folks who have gotten laid off once or twice and then found no takers for months on end.

Broadly, 12.7 million people are officially seeking work and are thus considered unemployed, that is, they looked for a job in the most recent four weeks. That figure peaked at 14.8 million in 2010. It hasn’t been in the double digits since 1983.

But that’s still not counting the millions in the shadows.

It’s not that they don’t need jobs, but they recognize, quite rationally, that there are no jobs to find. Like homes being held off the market, why send resumes to companies that just aren’t hiring?

If you accept the idea of not counting folks who aren’t trying, then the unemployment rate has, of course, broadly improved from the height of the crisis. The current official jobless rate is 8.2 percent.

New data comes out Friday at 8:30 a.m. Wall Street has reached a consensus view that we should expect a weak number, 167,000 net jobs, and that the rate will stick at 8.2 percent. (The government has been gradually ratcheting down what’s called the “labor participation rate,” so the headline figure is likely to stay the same, even if the net jobs number disappoints.)

A government study published in May found that it’s easy to see why people give up looking.

During the boom, from 1994 to 2008, job seekers could find work in a little over a month. After the credit crisis, things definitely got worse.

“The length of time it took for the jobless to be successful in their job search increased sharply during the recent recession and in its aftermath. The median number of weeks unemployed doubled — from five to 10 weeks — and a far greater share of successful job seekers spent in excess of a year in their search for employment,” Bureau of Labor Statistics (BLS) economists write.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

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Thursday, 03 May 2012 02:24 PM
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