WASHINGTON (AP) — The job market is even worse than
the 9.1 percent unemployment rate suggests.
America's 14 million unemployed aren't competing
just with each other. They must also contend with 8.8 million other people not
counted as unemployed — part-timers who want full-time work.
When consumer demand picks up, companies will
likely boost the hours of their part-timers before they add jobs, economists
say. It means they have room to expand without hiring.
And the unemployed will face another source of
competition once the economy improves: Roughly 2.6 million people who aren't
counted as unemployed because they've stopped looking for work. Once they start
looking again, they'll be classified as unemployed. And the unemployment rate
could rise.
Intensified competition for jobs means unemployment
could exceed its historic norm of 5 percent to 6 percent for several more
years. The nonpartisan Congressional Budget Office expects the rate to exceed 8
percent until 2014. The White House predicts it will average 9 percent next
year, when President Barack Obama runs for re-election.
The jobs crisis has led Obama to schedule a major
speech Thursday night to propose steps to stimulate hiring. Republican
presidential candidates will likely confront the issue in a debate the night
before.
The back-to-back events will come days after the
government said employers added zero net jobs in August. The monthly jobs
report, arriving three days before Labor Day, was the weakest since September
2010.
Combined, the 14 million officially unemployed; the
"underemployed" part-timers who want full-time work; and
"discouraged" people who have stopped looking make up 16.2 percent of
working-age Americans.
The Labor Department compiles the figure to assess
how many people want full-time work and can't find it — a number the
unemployment rate alone doesn't capture.
In a healthy economy, this broader measure of
unemployment stays below 10 percent. Since the Great Recession officially ended
more than two years ago, the rate has been 15 percent or more.
The proportion of the work force made up of the
frustrated part-timers has risen faster than unemployment has since the
recession began in December 2007.
That's because many companies slashed workers'
hours after the recession hit. If they restored all those lost hours to their
existing staff, they'd add enough hours to equal about 950,000 full-time jobs,
according to calculations by Heidi Shierholz, an economist at the Economic
Policy Institute.
That's without having to hire a single employee.
No one expects every company to delay hiring until
every part-timer is working full time. But economists expect job growth to stay
weak for two or three more years in part because of how many frustrated
part-timers want to work full time.
And because employers are still reluctant to
increase hours for part-timers, "hiring is really a long way off,"
says Christine Riordan, a policy analyst at the National Employment Law
Project. In August, employees of private companies worked fewer hours than in
July.
Some groups are disproportionately represented
among the broader category of unemployment that includes underemployed and
discouraged workers. More than 26 percent of African Americans, for
example, and nearly 22 percent of Hispanics are in this category. The figure
for whites is less than 15 percent. Women are more likely than men to be in
this group.
Among the Americans frustrated with part-time work
is Ryan McGrath, 26. In October, he returned from managing a hotel project in
Uruguay. He's been unable to find full-time work. So he's been freelancing as a
website designer for small businesses in the Chicago area.
Some weeks he's busy and making money. Other times
he struggles. He's living at home, and sometimes he has to borrow $50 from his
father to pay bills. He's applied for "a million jobs."
"You go to all these interviews for
entry-level positions, and you lose out every time," he says.
Nationally, 4.5 unemployed people, on average, are
competing for each job opening. In a healthy economy, the average is about two
per opening.
Facing rejection, millions give up and stop looking
for jobs.
Norman Spaulding, 54, quit his job as a truck
driver two years ago because he needed work that would let him care for his
disabled 13-year-old daughter.
But after repeated rejections, Spaulding concluded
a few weeks ago that the cost of driving to visit potential employers wasn't
worth the expense. He suspended his job hunt.
He and his family are getting by on his daughter's
disability check from Social Security. They're living in a trailer park on
Texas' Gulf Coast.
"It costs more to look than we have to
spend," he says.
Eventually, lots of Americans like Spaulding will
start looking for jobs again. If those work-force dropouts had been counted as
unemployed, August's unemployment rate would have been 10.6 percent instead of
9.1 percent.
Emma Draper, 23, lost her public relations job this
summer. To pay the rent on her Washington apartment, she's working part time at
the retailer South Moon Under. She's selling $120 Ralph Lauren swimsuits and
other trendy clothes.
Her search for full-time work has been
discouraging. Employers don't call back for months, if ever.
"You're basically on their timeline,"
Draper says. "It's really hard to find a job unless you know somebody who
can give you an inside edge."
Retailers, in particular, favor part-timers. They
value the flexibility of being able to tap extra workers during peak sales
times without being overstaffed during lulls. Some use software to precisely
match their staffing levels with customer traffic. It holds down their
expenses.
"They know up to the minute how many people
they need," says Carrie Gleason of the Retail Action Project, which
advocates better working conditions for retail workers. "It's almost
created a contingent work force."
Draper appreciates her part-time retail job, and
not just because it helps pay the bills. It takes her mind off the frustration
of searching for full-time work.
"Right now, finding a job is my job," she
says. "If that was the only thing I had to do, I'd be going insane. There
is only so much time you can sit at your computer, sending out resumes."
Leonard reported from St. Louis. AP Business Writer
Ellen Gibson in New York contributed to this report.
Copyright 2011 The Associated Press.
(AP
Photo/Atlanta Journal & Constitution, Bob Andres, File)
