Several years ago, Scott Myrick did what several hundred thousand other Michiganders also did during the past decade — dropped out of the work force.
Like others who gave up working, Myrick cites a mix of motives — a poor outlook in the job market added to new responsibilities at home. Others cite a desire to get an education, join the military, or do something else that seems more important than going to work.
Myrick, 41, of Chesterfield Township left his job as a human resources manager for a credit union in 2001 to become a stay-at-home dad. “My wife and I looked at it. She had way more upside and I didn’t see my job going anywhere, and I wasn’t happy letting somebody else raise my kids,” he said last week.
But with the economy improving, people like Myrick are rejoining Michigan’s work force — defined as those either working or actively looking for work. Myrick not long ago became a partner in Toast, which has restaurants in Birmingham and Ferndale.
Others are coming back, too. The state’s total labor force of about 4.6 million people grew by about 26,000 since February, according to data reported by the state’s Department of Technology, Management & Budget. After years of seeing the work force shrink, economists say Michigan’s growing economy is starting to bring people back.
Understanding where all those labor-force dropouts went — and what it takes to get them back in the work world — may help predict how soon Michigan will fully recover from its lost decade, when it shed jobs for a record 10 years in a row.
Economists and demographers say surprisingly little is known about this group of missing workers or what they did. But their numbers are large.
Kenneth Darga, Michigan’s state demographer, said that the state’s total labor force shrank from close to 5.2 million in 2000 to about 4.8 million in 2010, a decrease of about 380,000. Adding in the workers who would have joined the labor force because of normal demographic trends, Darga said the more accurate estimate of missing workers is closer to about 650,000 for the decade.
Many of the missing workers fled to other states as Michigan’s population shrank in some years and stagnated in others. About half of Michigan’s missing labor force can be explained by out-migration, Darga said.
The rest can be explained by a drop in labor-force participation — people who simply chose to do something other than work. Like Myrick, some men became stay-at-home dads. The U.S. Census Bureau reported in 2010 that among fathers with a wife in the work force, 32% were a regular source of care for their children younger than 15, up from 26% in 2002.
Some workers, debilitated by decades of labor, applied for Social Security disability payments. The number of workers granted disability awards in the U.S. swelled from 830,000 in 2005 to 1.05 million by 2011, the Social Security Administration reported. The rate of awards per 1,000 workers rose from 5.8 to 7 during that time.
Other former or potential workers joined the military. Based on population trends, Darga estimated that about 53,000 Michiganders were serving on active duty with the U.S. military in 2010, an increase of about 5,200 from 2000. Many of those active-duty personnel are young adults who otherwise might be in the labor force.
Still others went back to school, retired early or otherwise dropped out or stayed away. Economists say it’s not possible to state with accuracy how many fit into each category.
The implications of these missing workers can prove profound. Because missing workers are no longer counted in calculations of the unemployment rate, the state’s jobless rate would be a lot higher if all those who left the labor force were still looking for jobs and being counted. All else being equal, adding about 400,000 missing unemployed people back into the calculation of Michigan’s jobless rate would boost April’s 8.3% rate to higher than 16%.
“The existence of this large pool of missing workers — workers who have either dropped out of or never entered the labor market because of the lack of job opportunities — means that the unemployment rate is understating weakness in the labor market,” wrote Heidi Shierholz, an economist with the Washington, D.C.-based Economic Policy Institute, in an analysis last week.
An irony of the missing worker problem is that as the economy and job market begin to improve and people like Myrick start to return, these newly returned workers will be counted as unemployed until they find jobs, thus raising the unemployment rate, Shierholz added.
That effect is already under way. Last Friday, the U.S. Bureau of Labor Statistics reported that the national unemployment rate for May rose one-tenth of a percentage point to 8.2% — but the rise was due mainly to more than 600,000 people entering or re-entering the labor force, boosting the labor force participation rate.
As missing workers re-enter the job market, they may find, as Myrick did, that the work world has changed while they were off doing something else.
“The biggest thing is the electronics — Facebook, Twitter, all the social media out there,” Myrick said last week. “It’s changed so much. Heck, when I left I was just getting my cell phone. Before that I had a pager.” He added, “Obviously I’m catching up a lot.”
By: John Gallagher, The Detroit Free Press