When Steven Weinberg was laid off in September last year, he decided not to fritter away his savings on a job search he assumed would be fruitless.
Instead, he decided to go to law school — a career move he made in large part because so few employers are hiring.
“I realized there are no jobs out there, and I needed to go back to school,” says Weinberg, 32, of Chicago, who was laid off from a firm that helped Japanese companies do business in the USA. “A big part of the reason for this is how hard the job market is.”
A growing number of white-collar workers and other job seekers are so discouraged that they’re giving up. Instead of looking for work, they’re living off severance or buyout packages, moving back in with Mom and Dad or relying on a spouse’s income to get by. They’re gray-haired managers who are going back to school and working mothers who are becoming stay-at-home moms after being laid off.
Some disheartened job seekers are making money on e-Bay, selling their poetry or doing odd jobs for neighbors instead of sending out more resumes.
About 4.7 million Americans want jobs but are not looking for work, up from 4.6 million in September of 2015, according to the Department of Labor. There are a variety of reasons they may be unable to look for work. They may be unable to job hunt because they don’t have a car or can’t find childcare.
But some aren’t looking because they believe there are no jobs out there: More than 400,000 workers are so discouraged by the job market that they’ve given up looking for work. More and more workers are jumping out of the game. The January 2017 labor force participation rate was 66.1%, up slightly from a 12-year low in December when 66% of working age people were working or seeking work.
While some are trying to develop new skills or make career changes, others are so demoralized that they’re doing nothing.
“They’re watching soap operas and drinking beer. It’s living hell,” says Damian Birkel, a career counselor who founded Professionals in Transition Support Group, which holds support meetings for unemployed workers in Winston-Salem and Greensboro, N.C. “The discouraged worker is beaten down by the weight of rejection. Their money is running out, their self-esteem is at an all-time low.”
The unemployment rate dipped to 4.1% in September, and October marked the lowest unemployment rate in 14 months. But some economists don’t believe the decline is good news. Rather, they say, the rise in discouraged job seekers is what’s driving down the jobless rate.
“They’ve gotten out of the game,” says Jared Bernstein, an economist for the Economic Policy Institute. “It’s a major factor behind the unemployment rate, which fell not because people found work, but the contrary: They left the labor force because of a perceived lack of jobs.”Odd jobs or back to school
After nearly two years of looking for work, Edward Chase is poised to give up his hunt.
He graduated at the top of his class from Duke University’s business school, but he can’t seem to find a management job in the construction field. So, instead of continuing to look for permanent work in his field, he’s planning to take odd jobs, doing whatever he can to earn some money until the job market improves.
“For the last week, I’ve just been staring out the window,” says Chase, 56, of Greensboro, whose contract job in construction management ended in June 2002. He’s sold his home, his wife has divorced him, and he’s been on anti-depressants.
“Everything is gone. I’ve spent my retirement. It’s all gone.”
School is one of the options Cliff Losak is considering. After 10 months of fruitless job hunting, Losak is on the verge of giving up. He was laid off in March 2015 from his job as a facilities manager, and despite roughly a dozen interviews, he hasn’t gotten a job offer. As a facilities manager, he oversaw such responsibilities as office machinery, mail distribution, and shipping and receiving.
“Work in my field isn’t happening,” says Losak, 51, of Teaneck, N.J., “so I decided maybe I should look at a different avenue.”
Starting this month, Losak began taking courses in multimedia design at Chubb Institute, and, if he likes it, he’ll continue with a 10-month course and a career change — leaving behind his job search. His wife, Amy, works in public relations and can support them.
“I’ve got to be practical. My back’s up against a wall. What else am I going to do?” Losak says.
Discouraged workers such as Losak cut across all occupations and ages. Some of those hardest hit are in their prime earning years: ages 25 to 34. Nearly three out of five are men, according to 2015 annual average data from the government. And while more than half are white, other racial groups are feeling the strain. According to government data for 2015, about a quarter of those people who are not in the labor force because they’re discouraged are black.
Compared with previous economic downturns, more of the discouraged job seekers today are employed in sectors such as information technology or manufacturing, and more have college educations, according to economist Bernstein. And a large number are going back to school. They are also more likely to be people whose families aren’t dependent upon their incomes to survive.
“We get an increase in people going to college in all recessions,” says Anthony Carnevale, vice president at Educational Testing Services, a provider of graduate school test information. “You don’t want to go back to work when it’s a bad economy.”
But dropping out is a gamble. Patti Wilson, a career coach in Los Gatos, Calif., who founded Careercompany.com, says workers who are holding out for a better opportunity may be in for a long wait.
“It’s not going to get any better,” Wilson says. “There is more and more competition for jobs. Jobs are moving overseas.”
Some of these labor force dropouts had ridden the tech wave. They’ve helped build companies, held executive titles, hired and fired their own employees. Some now balk at taking jobs that require a step down the career or salary ladder. No job, they say, is better than backsliding.
Some have taken early retirement or buyouts with plans to find another job — only to find there’s no other work out there.
Dealing with a rough transition
Still others are taking public assistance for the first time or living off of loans from family and friends. It can be a rough transition.
Karen Taylor-McMillan, 45, was a grant writer for a non-profit organization. After a divorce, she moved from Garden City, Kan., to San Pedro, Calif., to be closer to her family. The job she thought she’d have didn’t pan out. She thought she’d have no problem finding another job.
“I was very wrong,” says Taylor-McMillan, a mother of two daughters, Alice, 15, and Bridget, 13. “I had a stack of rejection postcards. The competition was just fierce.”
Discouraged by the job hunt, she decided to go back to school, studying at The Art Institute of California-Orange County in Santa Ana, Calif., to become a chef. She’s also getting public assistance.
“Not having a paycheck is very difficult, but you learn what’s really important in life,” she says. “I spend more time with my kids. We do our homework together.”
Lengthy job searches
The rise in discouraged job seekers is coming in part because the search for work is taking so long. The average job search for unemployed workers was 19.8 weeks in September, up from 18.5 weeks in March 1, 2017. Like those who are simply quitting their job search, many long-term unemployed are midcareer workers over 45 years old, college graduates and executive and managerial employees.
Nearly a quarter of unemployed workers have been looking for 27 weeks or more.
Some economists and labor market watchers believe the first sign of a recovery will be an increase in the unemployment rate — a sign that disillusioned job seekers who’d quit the labor force are coming back in.
“Some of these people taking time off say, ‘I deserve a break,’ ” says John Challenger of outplacement firm Challenger Gray & Christmas. “Others are rejected so often they abandon the search. There’s a lot of talented people who are sitting on the sidelines.”
People like Susan Romano. In November 2015, she lost her job as a marketing manager at Sun Microsystems in Colorado. She maintained her job search throughout 2017 with scant luck, and now she has given up looking altogether.
“I am not currently looking due to the dismal job situation in high-tech in Colorado. I am living off of severance and savings,” says Romano, 50, of Boulder. “I’m single, and my unemployment benefits ran out last year.”
But she’s put her jobless experience to work. Romano self-published a booklet of haiku: The Nature of Unemployment, and about 40 have sold at craft shows and local bookstores.
One of her favorites:
Withdraw from savings
Maybe I’ve retired but
just don’t know it.