Permanently Displaced Workers and the Way Forward
Why is the unemployment rate not accurate?
The Current Population Survey (CPS) administered by the U.S. Bureau of Labor Statistics (BLS) is an imperfect measure of joblessness because the resulting unemployment rate regards part-time and temp jobs as employment and doesn’t account for the underemployed and those who have given up on the job search.
In February 2021 the unemployment rate was 6.2% (BLS, 2021):
6.9 million who want a job were not in the labor force, up 1.9 million
Labor force participation rate was at 61.4%, 1.9% lower than a year earlier
Employment-population ratio was down by 3.5% over the year to 57.6%
Displaced workers are defined as people 20+ years of age who left or lost jobs because their plant or company closed or moved, there was insufficient work, or their position or shift was eliminated. Hiring bias, industry changes or disputes, weather or other environmental conditions, and automation pushes people out of the labor force, while illness or disability, caring for a child or family member, and dealing with personal challenges pulls others out.
Long before the global pandemic, displaced workers rates were notable (BLS, 2020):
Jan 2017 - Dec 2019, there were 2.7 million workers displaced from jobs held 3+ years
40% due to company closed/moved, 36% position eliminated, 23% insufficient work
Jan 2020, only 70% of the displaced 2017-2019 workers were reemployed
35% of which earning less than what they did at their lost job
Joblessness can lead to poor mental and physical health due to elevated levels of stress, anxiety, frustration, disappointment, and social stigma (APA, 2012) as participation in the labor force is a matter of survival. Federal and local legislation and programs have been designed to address displacement: