Forty percent of Americans who are capable of working but who don’t have a job say they have completely given up looking for work, according to a new report.
The findings of a survey conducted by Express Employment Professionals show that the longer an individual has been out of the labor force, the more likely they are to say they have given up looking. More than half – 55 percent – of those out of work for more than two years say they have given up, while 21 percent of those out of labor force for three months or less say the same.
"Sometimes people get so frustrated with their job prospects that they give up looking for work altogether," states the report. "If they’re not looking for work, then they’re not officially counted among the ‘unemployed’ according to the government."
These factors contribute to a falling labor force participation rate, a figure monitored by the Bureau of Labor Statistics that measures the proportion of the population who do not have a job and did not look for one in the past month. In 2015, this rate averaged out to 62.7 percent, the lowest level seen since 1977.
In addition to those who have given up looking, other factors that contribute to a falling labor force participation rate include an aging population of baby boomers who are hitting retirement age, individuals who may not want a job because they want to go to school, retire, or take care of family, and those who cannot work because of a disability.
In order to participate in the Express Employment study an individual must have been capable of working. The study excluded those who were retired, those who chose to stay at home, and those who had a disability that prevented them from getting a job.
While many tout the improvement in the unemployment rate since the recession, which dropped from 10 percent in October 2009 to 5 percent in October 2015, the labor force participation rate has continued to decline.
"As Americans started going back to work and businesses started hiring, a strange thing happened: the [labor force participation rate] kept going down," states the report. "More and more Americans were still leaving the labor force, even with the economy growing again."
According to the report, historical declines in unemployment have correlated with growth in labor force participation. The current, dramatic drop in the labor force participation rate defies this precedent.
"Sometimes the good news of a falling unemployment rate hides the bad news of dispirited workers leaving the labor force," states the report.
"We cannot continue to make the mistake of overlooking the dropping labor force participation rate and this almost unprecedented trend we’re facing," said Bob Funk, a former chairman of the Federal Reserve Bank of Kansas City and CEO of Express Employment. "If we do, we are ignoring millions of struggling Americans—and that is unacceptable. This isn’t just about an aging population; it’s about a not-so-hidden weakness we must confront."