The stories you want. The opinions that matter.
No, thanks
Tag: workforce
Out Of The Job Market, Many Working-Age Men Aren’t Coming Back

Out Of The Job Market, Many Working-Age Men Aren’t Coming Back

By Don Lee and Samantha Masunaga, Los Angeles Times (TNS)

Millions of workers who dropped out of the job market during the last economic slump were supposed to jump back in once things turned around. But more than six years after the recession ended, the missing millions are increasingly looking like they’re gone for good.

The nation’s labor participation rate — defined as the share of the working-age population that is either working or looking for work — hasn’t budged from a 38-year-low of 62.6 percent this summer. And most experts don’t see an upswing on the way.

The reasons include the nation’s aging population, swelling ranks of people on disability and the changing nature of jobs. But one of the biggest factors has to do with men in the prime of their work lives, particularly those with less education.

Mitchell Johnson of Hawthorne, Calif., has been unemployed since 2012, when he completed an 11-month construction training program. Married without children, the 26-year-old high school graduate blames it partly on the fact that he isn’t a union member. Johnson says he could probably find low-wage work at a restaurant or retail store, but he is holding out for something better.

“I’m going for a career job,” he said. For now, he volunteers at a community work center and relies on sporadic side jobs like house painting and his wife’s income from her job at a department store. “I got people to help me out,” Johnson said.

Labor participation for men ages 25 to 54 has been declining for decades but sped up during the recession with large-scale layoffs in construction and manufacturing. Their growing withdrawal from the job market is especially worrisome because it carries significant social and economic costs.

Collectively, these trends indicate that the U.S.’s potential workforce — and thus productive capacity — may be considerably smaller than previously thought. Some economists have long argued that the true unemployment figure is a few percentage points higher than the government-reported rate, currently 5.1 percent, because officials don’t count people as unemployed if they’re not actively looking for work.

But more and more experts are concluding that the great flight of workers in recent years isn’t going to reverse.

Meanwhile, many workers who have been able to land only part-time jobs are finding that a stronger economy doesn’t necessarily lead to more work hours. The number of part-time workers wanting to work full time remains unusually high today, and there’s some evidence that this increase since the recession is largely permanent.

If there are millions more jobless workers than the unemployment rate would indicate, the thinking went, the Fed could keep stimulating the economy with super-low interest rates to help absorb more of the unemployed without worrying about inflation shooting higher. The Fed’s benchmark interest rate has been pinned near zero since the depths of the recession in December 2008.

But though economic growth has been slow and uneven, employers have added new jobs at a fairly steady and solid pace in recent years — about 8 million since mid-2012. The unemployment rate has fallen from a high of 10 percent in October 2009 to 5.1 percent last month, very close to what many economists see as an optimum level before inflation pressures build.

Unemployment varies widely across the country, from 4 percent or lower in many towns in Iowa and Minnesota to double digits in some places in Central California. Still, the overall improvement has been impressive. This summer, there were about 63 job openings for every 100 officially unemployed people. A few years ago it was just 16 openings for every 100.

In the past, a recovering economy usually meant rising labor participation as more people gained confidence and got off the sidelines and into the job market. But not this time. The share of the population 16 years and over in the workforce was 66 percent in December 2007 when the economy fell into recession, and it has ticked down every year since then to 62.6 percent the last three months.

If the U.S. had the same labor participation rate today as in late 2007, the nation’s workforce would be roughly 8 million higher more than the July figure of about 157 million.

The severity of 2007-09 recession and major concurring shifts in the nation’s demographics have made it hard to predict labor trends. Many economists, including those at the Fed, now estimate that about half of the decline in labor participation has been due to the aging of the large population of baby boomers, the oldest of whom turned 69 this year.

Labor participation rates are lower for workers as they get closer to retirement age. And the economic downturn forced even more older workers to drop out of the labor force; anecdotal reports abound of laid-off workers taking early retirement.

At the same time, young adults have delayed their entry into the job market, further depressing labor participation. College enrollment rates were rising before the recession, and the weak recovery has pushed more people to stay in school longer while others who were laid off went back for training.

Many people not in the labor force are working off the books or at temporary jobs or as freelancers, making it difficult to track their employment status. Moreover, decades-old structural problems, including access to public transportation and affordable child care, continue to keep some workers, both male and female, from the workforce.

Berny and Dora Motto of Echo Park have been surviving on savings and unemployment benefits since he was laid off in June as a field deputy for L.A. City Councilman Bernard Parks, who was termed out of office.

Berny, 47, has a bachelor’s degree in international relations from his native El Salvador and remains very engaged in the job market; he has had interviews and is anticipating callbacks from some of them. Dora, was a dentist in El Salvador but isn’t looking for work now. She takes care of their two young daughters at home.

“The last two months have been very, very difficult,” Berny Motto said, adding that he and his wife even considered returning to El Salvador.

Many immigrants come to the U.S. for economic opportunities, and often have a higher engagement with the labor market than the native-born population. But participation rates have fallen for the foreign-born as well, as they have for almost every demographic group with the notable exception of older workers, especially those over 65.

Labor participation for women 25 to 54, which had risen steadily from the 1960s through 2000, fell back to 73.7 percent this summer from 75.5 percent in late 2007.

The drop has been sharper for men in that age group — to 88 percent from 90.9 percent at the end of 2007. At its peak in the mid-1950s, labor participation for men in their prime working age was nearly 98 percent.

The drop-off of men from the workforce continues to dismay policy experts and economists.

“Those are the ones I find most surprising,” said Sophia Koropeckyj, a labor economist at Moody’s Analytics. She still expects labor participation overall to rise a bit in the coming months as employers keep adding jobs and rising earnings draw more people into the workforce.

Most economists aren’t so optimistic. The aging of baby boomers, the youngest of whom are 51 this year, will be a big drag on labor participation rates for years to come. And there’s little indication yet that the decline of men in the work world has stopped.

In a paper in 2013 titled “Wayward Sons,” MIT economist David Autor said that the U.S. economic landscape was undergoing a “tectonic shift.” While women over the decades have gained ground in education and economic measures, including labor participation, men have fallen behind, Autor noted. That’s made them less attractive as partners and has perpetuated a vicious cycle in which children living in low-income single-parent households are headed predominantly by women, who in turn raise sons with poorer prospects for social, education and economic advancement.

“Although a significant minority of males continues to reach the highest echelons of achievement in education and labor markets, the median [or average] male is moving in the opposite direction,” he wrote in the paper with Melanie Wasserman, a graduate student.

That’s particularly worrisome in an economy driven by global competition and rapid changes in technology. “A male high school graduate in America has almost nothing an employer is going to value,” said Harry Holzer, a Georgetown University professor and former chief economist at the Labor Department. He noted that many men and the U.S. economy at large would benefit from stronger vocational and technical programs at schools, with apprenticeships and other career paths.

“On average, low-income, at-risk young men don’t do as well just sitting in a classroom,” Holzer said. “I think a lot of these men would do better if we offered them high-quality work-based education.”

Photo: Fewer males are doing this, and the reasons are complicated and varied, but it all points to a worrisome trend. Lynn Friedman/Flickr

Helping The Mentally Ill Join The Workforce

Helping The Mentally Ill Join The Workforce

By Michael Ollove, Stateline.org

By his own admission, for many years Cyrus Napolitano’s mental illness — bipolar disorder — did not make him an ideal employee. Perhaps the worst moment came when he walked into the Brooklyn McDonald’s he was managing to discover some now-forgotten worker infractions.

“Whatever it was,” he said last week, “it triggered an explosion where I was screaming at the top of my lungs and beating a path of destruction all the way to the back, knocking everything off shelves and kicking the back door with my boot.”

He left the job at McDonald’s, as he did various other jobs over the decades — as a waiter, a bartender, a concierge at a luxury condo building. During one eight-year period in the 2000s, after his third suicide attempt, he could barely work at all.

But that was some time ago. Thanks to his eventual involvement with Fountain House, a community mental health center in Manhattan, Napolitano, now 53, is in his fourth year of steady, part-time employment as the “scanning clerk” at an international law firm, a stress-free job he credits with helping him manage his illness.

“For me, it goes back to stability, structure, support, and acceptance,” he said.

Because of poor funding from state and other sources, the “supportive employment” that benefited Napolitano is unavailable to most of those with serious mental illness. According to one study, only 1.7 percent of those served by state mental health systems received supported employment services in 2012, even though it has proven to be the most effective way to keep the mentally ill in steady jobs.

Soon that situation may change. Under the Affordable Care Act (ACA), states can apply to use Medicaid funds to train and employ the seriously mentally ill, under the theory that steady employment is a form of treatment.

The unemployment rate in that group is strikingly high, about 80 percent in 2012 among those receiving state mental health services, according to the federal Substance Abuse and Mental Health Services Administration (SAMHSA). The range among the states is broad. Maine, West Virginia, Hawaii, Pennsylvania, and California all had unemployment rates for the mentally ill above 90 percent. Wyoming had the lowest rate at 56 percent.

Sita Diehl, director of state policy and advocacy at the National Alliance on Mental Illness, which hosted a presentation with an accompanying report in Washington last week to highlight the issue, said the variation among the states is less a reflection of policy differences than the overall condition of the economy in each state. The reality, she said, is that programs to help the mentally ill obtain and maintain employment are so scarce they wouldn’t register significantly in unemployment statistics.

Surveys have shown that as many as seven out of 10 people with severe mental illness would like to work. Robert Drake, a Dartmouth psychiatrist who develops and evaluates community mental health programs, said the benefits of work for the mentally ill are multiple.

“First of all, of course, it provides them with money,” Drake said. “It makes them feel better about themselves. It integrates them more into their communities. And often, they do better in managing their illnesses.”

Drake said the old “step-wise” models for helping the mentally ill obtain and retain employment often failed. In these programs, people would train in some sort of sheltered job program and then, if deemed ready, released to the market to find jobs. Mostly, Drake said, it didn’t work.

Under the supportive employment model, an employment specialist is part of the patient’s mental health team. The specialist, who may have a degree in vocational rehabilitation counseling, social work, psychology, counseling, or divinity, helps plot a job-seeking strategy with the patient. Then the specialist remains involved once the patient has a job to help with any problems that arise.

“There have been 21 randomized controlled trials run on supportive employment models,” Drake said. “Every one shows that under this model, the majority of these people will succeed in competitive employment.”

And, he said, at a negligible cost: between $4,000 and $5,000 per participant.

Drake’s Dartmouth Psychiatric Research Center developed one of the most successful supported employment models, called Individual Placement and Support (IPS). With seed money from Johnson & Johnson, Dartmouth began handing out grants to fund IPS programs in 2001. The grants went to 16 states or jurisdictions and ultimately helped fund 191 sites that follow the IPS method. According to Johnson & Johnson, the programs now serve more than 11,000 people a year and have achieved an employment rate of 40 percent.

“Without question, (it is) the most effective supportive employment model out there,” according to Kandy Ferree, a consultant in Johnson & Johnson’s charitable arm who heads up the mental health portfolio.

Most of the programs, however, rely on private fundraising and limited state funding, often by way of federal mental health block grants. Money, program administrators say, is always an issue. “Funding is always a problem and continues to be a problem,” said Kenn Dudek, president of Fountain House. He said he gets a third of his budget from city and state sources. The rest he has to raise privately.

Dudek said Medicaid has traditionally been of little help because that money had to be used for health purposes, and not for education or training. Furthermore, the paperwork involved in taking Medicaid money was too onerous to be worthwhile.

Earlier this year, however, the Obama administration, acting on a provision in the ACA, completed the writing of new rules that will enable states to apply for federal waivers to more easily use Medicaid funds for supportive employment programs. So far, Drake said, Wisconsin and Iowa have received waivers.

Not all supportive employment models follow the Dartmouth IPS model, but all share certain attributes. The most important is that there is an employment specialist charged with supporting patients in their job searches and for many months after they start working.

The support is as varied as the clientele. Some patients need help strategizing on the kind of jobs that would interest them and how to prepare for interviews. Sometimes, a patient’s illness influences the job choices. Those with high levels of anxiety, for example, may be better suited for jobs where there is little interaction with other people. Others are more likely to benefit from human contact.

Some patients may need the counselor to accompany them on the interview. Some may need assistance to arrive at the job on time, or organizational help so they can perform once they are there.

In the most effective models, the job counselor is part of the mental health team that is assisting the patent.

Integrating the job counselor into the team is crucial, Drake said. Some patients may need higher dosages of medication to control anxiety when they start a new job. Others, like Cyrus Napolitano, may require lower dosages to wake up in time for a job and to stay focused while there.

Kathy Rohr, clinical director of the Family and Children’s Center in La Crosse County, Wisconsin, which NAMI named a model IPS program, said she frequently sees patients improve thanks to the jobs they hold.

“I’m working with someone who suffers from significant anxiety who had trouble getting out of house at all,” she said. “We helped get him a job that didn’t put him around too many other people and with his own space. Now he’s been inspired to get out on his own to go to the grocery store. That’s a huge step for him.”

Stephanie Joseph, 50, from Gaithersburg, Md., has severe depression and a bipolar disorder. She said her counselor, from Cornerstone, a community-based center in Montgomery County, accompanied her every moment of her first week of work as an office administrator to help her get acclimated. Nearly a year into the job, she continues to meet with him every week to review the previous week and to set goals for the one coming.

Joseph said her life has turned around. A certified public accountant, she was fired from numerous jobs over the years for not showing up for work when she was too depressed to get out of bed. Eventually she didn’t work at all.

“I was floundering for probably eight or nine years,” she said. “Basically, all I did was sleep. Now, I get up, I go to work, I have social interaction. I have a sense of accomplishment.”

AFP Photo/Scott Olson

Interested in news about health? Sign up for our daily email newsletter!