6:32am

Sun April 3, 2011
Economy

Measuring Joblessness Through An Educational Lens

Economist Bill Rodgers has a name for the recovery — and it's not a very nice one.

Rodgers, a professor at Rutgers University, calls it "bifurcated" because people who have college degrees are getting hired, but those who didn't finish school are sitting on the sidelines. Many have given up on their search for work.

"This horrible recession, combined with this weak recovery, has lead to this bifurcated set of outcomes," he says.

The nation's unemployment rate fell slightly in March to 8.8 percent; more than 200,000 jobs were added to the payroll. But the unemployment rate leaves out many people — including those who have stopped looking for jobs and have dropped out of the labor force.

"One of the things that I think is sort of an intuitive idea is that if the unemployment rate is improving, that's really only good news if we see a bigger share of the labor force that's working," says Heidi Shierholz, an economist with the Economic Policy Institute.

Shierholz says she thinks the employment-to-population ratio, which measures the share of the U.S. population that has a job, is a more accurate reflection of the unemployment picture. The ratio has hardly budged over the past year. That means the percentage of people working in this country hasn't changed though the unemployment rate has ticked down.

Left Out, Going Back To School

The unemployment rate is calculated based on the labor force, so that excludes people such as Valerie Young.

Young has four children and a husband who's on disability. The family lives just outside Salt Lake City. Young left college early to get married and raise a family. When her husband got sick, she had to jump into the workforce.

But Young says that plan didn't work out; she searched for work for three years.

"Even though I have put in hundreds of applications and dozens and dozens of resumes, employers tell me in interviews that they are looking for someone with more education — a college degree — or an associate's degree," she says.

So, Young has taken out a loan to go back to college. She starts next week, and ultimately hopes to go to nursing school.

Young's story is typical. Shawn Smith is also feeling the effects of the bifurcated recovery. The 31-year-old moved to three states in as many years looking for work. But nothing stuck.

While he was in college in the 1990s, he was making good money working as a landscaper. So he decided to drop out to work full-time.

Living At Home

Now, he lives with his parents in Largo, Fla., while he's looking for a job. But he's having trouble finding any opportunities because he didn't finish college, he says.

For people like Smith, who don't have a college degree, the situation hasn't even bottomed out yet.

In 2007, before the recession, about 70 percent of people who attended some college, but didn't have a bachelor's degree were working, according to the Economic Policy Institute. When the recession hit, that number dropped to about 65 percent and it keeps declining.

"And when jobs do become available, when there are literally millions of very desperate people out there, workers with higher education can go down the ladder," says Shierholz of the Economic Policy Institute. "They can take jobs that are below their skills and experience. And workers with lower educational credentials can fall off the ladder." Copyright 2011 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

DAVID GREENE, host:

The nation's unemployment rate fell slightly in March to 8.8 percent. More than 200,000 jobs were added to the payroll.

But as NPR's Zoe Chace reports, there are a lot of people who weren't counted in the unemployment picture, and they're being shut out of the economic recovery.

ZOE CHACE: Economist Bill Rodgers has a name for this recover, and it's not a very nice one. Professor BILL RODGERS (Chief Economist, Heldrich Center for Workforce Development, Rutgers University): The horrible recession combined with this weak recovery has lead to this bifurcated set of outcomes.

CHACE: The bifurcated recovery. That's what this story is about, where people who do have college degrees get hired and people who don't are sitting on the sidelines.

DR. HEIDI SHIERHOLZ (Economist, Economic Policy Institute): And when in doubt, let's just plot this.

CHACE: I'm looking at a graph labor economist Heidi Shierholz just pulled up in her office at the Economic Policy Institute; it's a Washington think tank. She's not a big fan of the media hype around the release of the unemployment rate every month, because she feels like it doesn't tell the whole story.

Dr. SHIERHOLZ: If the unemployment rate is improving, that's really only good news if we see a bigger share of the labor force that's working

CHACE: The unemployment rate leaves out a lot of people, people who have stopped looking for jobs. In economist-speak, they've dropped out of the labor force.

DR. SHIERHOLZ: So when people who may have otherwise been unemployed drop out of the labor force, that makes the unemployment rate look better.

CHACE: People out there like Valerie Young.

Ms. VALERIE YOUNG: It's been almost three years now and I haven't found anything.

CHACE: So she's stopped looking. Young has four kids and a husband who's on disability. They live just outside Salt Lake City. Young left college early to get married and raise a family. When her husband got sick, she had to jump into the workforce quick. Except...

Ms. YOUNG: Even though I have put in hundreds of applications and dozens and dozens of resumes, I've been told by a lot of employers in interviews, that they are looking for someone with more education, with a college degree.

CHACE: So she's taken out a loan to go back to college. She starts next week.

People like Young who don't have college degrees have dropped out of the labor force in a larger proportion than people who do have college degrees.

Shawn Smith wants to go back to college, too. He's moved to three states in as many years looking for work. Nothing stuck. In the '90s, he was making such good money doing landscaping, he dropped out of school to work full time. Now he lives with his parents in Largo, Florida.

Mr. SHAWN SMITH: Being 31 years old, wanting to go back to school, you know, just because you want to stop and do that, doesn't mean that life is going to stop. You know, your bills are still going to come in, so it would have to be something...

(Soundbite of clock)

Mr. SMITH: Ugh, clocks.

(Soundbite of laughter)

CHACE: Is that like one of your parents' old clocks or something?

Mr. SMITH: My mom got it for 25 years with her company and so that she hung it up.

CHACE: Do you think you'll ever get a clock like that?

Mr. SMITH: I would like to think I could. But I don't think that's something that will happen.

CHACE: Before the recession in 2007, people who had some college but didn't have a bachelor's, about 70 percent of them were working. When the recession hit that number dropped to about 65 percent. And it keeps dropping.

Economist Heidi Shierholz picks it up from here.

Dr. SHIERHOLZ: And when jobs do become available, when there are literally millions of very desperate people out there, workers with higher education credentials can sort of go down the ladder; they can take jobs that are below their skills and experience. And workers with lower education credentials can fall off the bottom.

CHACE: If you can't even get on the ladder, how will you start to climb it?

Zoe Chace, NPR News.

GREENE: You're listening to NPR News. Transcript provided by NPR, Copyright National Public Radio.