Why aren't more Americans looking for work?

People are less inclined to work or seek new employment, leaving the labor force participation rate at its lowest level since the 1970s.

By Kim Peterson Aug 28, 2013 4:36PM
Image: Senior on the beach © Angelo Cavalli, Cultura, Getty ImagesThe falling unemployment rate says great things about the economy. But dig a little deeper, and it becomes clear that this drop is nothing to cheer about after all.

The rate is falling mainly because the number of Americans working or actively looking for work is shrinking. That's technically called the labor force participation rate, and it's at just 63.4% -- a level not seen since the 1970s.

Put quite simply: Many Americans no longer want to work. It's a phenomenon that Bob Funk, former chairman of the Federal Reserve Bank of Kansas City, calls "the Great Shift," and it's not sustainable. "This is a period defined by the Boomer retirement, Millennial frustration, and growing reliance on government programs," he said, adding that it's a "tragedy in the making."

Funk is now CEO of Express Employment Professionals, a staffing firm, and released a white paper this week examining exactly why more Americans aren't looking for work.

Here are four reasons, according to the study:

1. Baby boomers are retiring. This generation, born between 1946 and 1964, makes up more than 26% of the population. They're starting to retire, and perhaps in a normal economy you might see more participation from younger workers to take their place. That's not happening, though.

On one hand, some boomers are forced to work longer because their retirement savings dried up in the recent market turmoil. But there are also boomers who were laid off or otherwise lost jobs, and decided to seek early retirement instead of moving into a lower-paying or lower-quality job.

2. Millennials are giving up. This generation, also known as Generation Y, was born between 1977 and 1994, and is having a serious problem finding work. They aren't getting the jobs that have come back in the recovery. As a result, 36% of them still live with their parents, they aren't working and they're feeling pretty miserable about the whole thing. Their parents can't be too thrilled, either.

3. People are stuck in the safety net of government benefits. A striking number of Americans are on disability insurance -- 4.6% of the working population in 2011. And in the last two years, less than 1% of them have returned to work. And states are happy to shift Americans into the disability category because it means the federal government picks up the tab.

4. Workers don't have the right skills. The so-called "skills gap" has been a hot topic lately, particularly since there are millions of job openings going unfilled. In a survey by the American Management Association, company leaders said workers aren't capable of good collaboration, communication and critical thinking.

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290Comments
Aug 28, 2013 5:46PM
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As has been well documented, there are plenty of places in the US where working a $10/hr job doesn't pay as well as being on gov teat.

Take a single mother in her 30s with 3 kids who's on "disability".  She might only get $1000/month on disability, which doesn't sound like much.  But she doesn't have to pay for childcare.  Each of her kids get free breakfast and lunch when they go to school.  She gets a Section 8 housing allowance.  Each of her kids very well might get a couple of hundred bucks a month from SSI.  She gets several hundred dollars a month in food stamps.  She gets a free phone.  She gets free medical care and free meds.  She also gets transportation vouchers.  She can head down to the local food bank every week and stock up.  She also qualifies for assistance with her power bill during the summer and winter, and maybe even free internet.  She can get all her school supplies at the local school supply giveaway day.  Her kids can get free clothes and coats and shoes from the clothing drive at the church down the street.   And when Christmas rolls around, she just has to put her family's info on the Angel Tree at the mall and contact the local Marine Recruiting Office to sign up for Toys for Tots.  It just doesn't pay for her to go out and get a $15/hr job.

Aug 28, 2013 5:30PM
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Why should people work when the govt takes care of you by providing subsidized food, housing, electric, phones, television, education, day care, healthcare and on top of that pay no taxes?

The govt is allowing people to not have to work, and then tell the ones that do work to pay more.

The people that aren't working might be the truly smart ones in america

Aug 28, 2013 5:28PM
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#5.  Individual responsiblity has decreased.
Aug 28, 2013 5:26PM
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Well when you can sit on welfare in Hawaii and make $60,000 per year (if you collect all benefits welfare has to offer) why would anyone go looking for work?

 

Aug 28, 2013 5:33PM
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Hell why work for something if the Government will give it to you for free? You gotta love America, home of the free.....loader.
Aug 28, 2013 5:24PM
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Yeah - real shocker. 99 weeks of unemployment available you know -paid to stay home, check monster once or twice a day -rest of time dink around.

 

On top of un-employment -sign up for food stamps, then there's worker re-training, oh and as article said "disability" is growing - with all our new safer systems in place, we sure end up with an awful lot of "disabled workers" - too many safety nets. So many safety nets -it's like dragging those giant nets through the sea - you catch everybody.

 

Bottom line is -we make life too cushy for people who don't work. If you don't work - you shouldn't have access to all the nicer things those of us that work have access do. I'm willing to provide food, medicine, and shelter -not I-phones, cable tv, beer, cigarettes, 19" rims, etc etc

Aug 28, 2013 6:18PM
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Wait until we get ObamaCare and all those who are in the ER's every night seeking drugs and 3 hots and a cot are ahead of you in the Dr. Office and your routine 4 hr wait now becomes an 8 hr wait.  Wake up America, the value of a person is in their contribution to society, not their dependency on society!
Aug 28, 2013 6:00PM
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You get what you pay for. If you pay people to be unemployed for 99 weeks, that’s what you get people who are unemployed for 99 weeks.

 

If you subsidize something you get more of it. With WIC, welfare, food stamps, Section 8, Medicaid and the myriad other programs at the federal, state and local levels the government is subsidizing poverty, so that’s what they get, more poverty.

Aug 28, 2013 7:16PM
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I understand that for a lot of  people it is hard to find a job,but I know some who would rather sit at home than look for one. Just today one person  who is a real jerk went into the Supermarket where my mother works and told her to stop saying God Bless America. ''You are a foreigner and you have no right to say that''!. My Mother has her Naturalization papers and has lived here for 35 years. And all of these years she has never once received  Govt. assistance or anything else. This man even admitted it he doesn't want to work. Thank Goodness she finally told him  that ''Even though I was born in another country,  I would rather work than collect money from other people's hard earned money. And I am paying taxes for people like you'' .
Aug 28, 2013 7:47PM
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Has the question been asked about the next generation aka the children of these welfare people. If a child sees his/ her parents sitting around all day doing nothing and they have everything they need they will not even think about looking for a job when they become adults. Our country is in deep s__t for years and the crooks in Washington do not give a damn.
Aug 28, 2013 5:58PM
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Gee, this doesn't take rocket science.  My co-workers were all subsidized by the govt.  Child care, child medical insurance, child tax credits, and savers credit.   Let's see there were also food stamps, subsidized housing and of course 99 weeks of sit on their A__ when they got laid off because they did the minimum.  No pay raise in 3 years, increased supervisory responsibility, increased patient workload and constant harassment to get satisfaction scores up when provided little or no assistance and absolutely the poorest kind of leaders and supervisors.  Next time you get sick, look for that brand new Registered Nurse Grad, I quit on July 1 and I haven't regretted a minute of it.  Count my Happy A__ retired.  Disgruntled Baby Boomer!
Aug 28, 2013 6:41PM
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Most people cant live off 8.00 per. And yes I know that's there fault for not being a brain surgeon. And what about people who are in in their late 40,s and older. Employers wont hire them because their Insurance  premiums go up. Wal-Mart cant hire them all. And don't get me started on short hrs. and low pay there.

 And if the government ( alias the mob) !!!  would stop telling the rich how to spend their money we would be better off all the way around.

Quit picking on the wrong people and start messing with Senators and so on. These guys piss away more money than all the mooching in the world !!!

Aug 28, 2013 7:01PM
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I have a very good friend who was laid off from a good salaried insurance industry job about 5 years ago in southern California. He has a college degree and about 15 year experience in that industry. He is 51 years old now. He could not get any job in that or related industries since then. Other than a 6 month stint in debt collection  job he is jobless all this time. But not for lack of trying. Almost every week he has some job interview . Cant even get menial jobs. So when this writer says People are reluctant to work I find it hard to beleive
Aug 28, 2013 6:39PM
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The big problem is all the good jobs were farmed out by American business and what is left are the McJobs that do not pay enough to live on.  Lester Thurow, author of The Zero-Sum Society, gave a lecture in Cleveland during the 70's pointing out that America was going from good paying jobs to McJobs. 

 

We had our warning but chose to ignore it.  The day is here when people can live on the jobs available because we let companies get away with valuing a days labor too low.  Take a McJob and you are caught in the downward spiral of low pay.  No employer wants older people who held good jobs and now work in a low paying McJob because they think, right or wrong, that the worker will jump ship the second anything better comes along.

 

Our society has become stratified.  When you are young, a McJob is not a problem but when you are educated, older and held good paying jobs, the McJob is a curse.  Add the fact that not enough hours can be had to live on while working a McJob so employers can save on paying for health benefits and the road to poverty is paved for many workers.

 

 

Aug 28, 2013 7:57PM
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People stopped looking for work because they are discouraged and beaten down. There are few decent jobs available, and it seems many firms would rather bring in H1-B people then hire Americans. Big Government and Big Business have conspired to destroy the work ethic of this nation. The social compact that once existed...fair pay for a day's work no longer exists. Business underpays their workers and overpays management, and they and government think we should all be OK with that. We're not OK with that. 
Aug 28, 2013 5:42PM
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HELLO....(I despise that word) For the sake of a vote, our president has made 47% of the population dependent. . 

why work when it pays more to feed off the working taxpayer? 

Aug 28, 2013 4:48PM
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Its ridiculous that #2 and #4 can be a problem at the same time.  Same as #1 and #3 being a problem at the same time.  Corporate well fare is at an all time high but they don't want to invest in jobs because of Economic uncertainty.  Lovely recovery this is.....
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Nice article. Baby boomers will not stop working until they simply can't. They can't afford to. This is bad for America.

Gen Y ers will not look for meaningful work if they have a constant failsafe to feed, shelter, and clothe them. Why should they join the service if they play it online?

3 is as it has always been just more so. Benefits never stop. How many weeks of unemployment do u get now? Where disability used to be a stigma, if you can get it now, by fraud or not, why not? It beats working right?

4 goes back to 2.  Too many gen y-ers give up waaaay to easy. Life is meant to be tough to toughen you up. If they don't learn skills at early adult ages, they never will. If parents don't kick em in the butt, nothing will get done. It's easy to work a 5 hour shift waiting tables and sleep the rest of the day, but it takes work and discipline to do that and take 2-3 classes for your future.

America needs the nuclear family back with parents up to the task of raising good children.

 

 

Aug 28, 2013 7:48PM
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Maybe tired of working to pay taxes to get pissed away to the middle east and to pay dumb F&*k politicians who keep the working class struggling for the sake of special interest.............DO I NEED TO GO ON OR DO YOU GET THE HINT?!!!!!!!!!!
Aug 28, 2013 6:43PM
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It's easier for the low enders to hold out their hand for Obozo to fill up every 30 days--
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