AJC – Where Have All the Workers Gone?

Aging society, weak recovery combine to cut labor participation rate.

Laia Sears just doesn’t count any more.

That is, when the government periodically totes up the number of people with jobs or looking for one – which is how it calculates unemployment rates – it won’t include Sears, 36. That’s because she decided to quit her job to stay home in Atlanta’s Ormewood Park with her baby boy, Benjamin.

She can afford to stay home since she has some family savings and her husband is a software developer for a large company.

“We are just very, very lucky,” she said. “My long-term plan is to go back into the workforce, maybe have another child, stay home for a couple years and then go back to work.”

For now, Sears is part of a somewhat puzzling, sometimes troubling trend: the dropping share of people in the workforce. In the past few years, millions have dropped out. In Georgia the “labor participation rate” is down to 61.7 percent, from nearly 70 percent in the late 1990s. The question is, why?

Some say the falling rate isn’t about hiring, but rather is an echo of changes in the economy.

The government bases its data on a system of work – full-time jobs – that is being eroded by self-employment, consulting, off-the-books work for cash and freelancing in the “gig” economy, said Jeff Tennery, CEO of Virginia-based Moonlighting.

The company lets people offer services while others seek workers for short-term jobs.

Like drivers for Uber or Lyft, these people should be counted as working, but when the government calls, they may not see themselves as having jobs, Tennery said. “I would say that most people classify themselves as not working.”

Most economists acknowledge that there is an off-the-data-grid economy that is impossible to measure, but argue that it is not big enough to fully explain the falling participation rate.

Maybe it’s about a change in attitude, not data.

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By Michael Kanell
The Atlanta Journal-Constitution
Friday, July 24, 2015 4:08 PM EDT

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