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Labor experts: April unemployment rates dropped as people stopped job hunting

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CANTON - Unemployment in Jefferson, Lewis and St. Lawrence counties fell by nearly 2 percent in April compared with a year ago. But labor experts say that’s likely because people have given up looking for work — not because they’ve found it — a category the U.S. Department of Labor calls “discouraged workers.”

Although in April there were fewer unemployed people in all three counties, the number of people with jobs actually fell, according to statistics released this week by the state Department of Labor. Here are the April jobless rates for those counties compared to April 2013, including the change in total employed and unemployed people over that period. Military employment is not included in state labor statistics.

n Jefferson County: rate 10.1 to 8.2 percent ; employed 42,300 to 42,1000; unemployed 4,700 to 3,800.

nLewis County: rate 10.5 percent to 8.7 percent, employed 10,800 to 10,600; unemployed 1,300 to 1,000.

n St. Lawrence County: rate 9.4 to 7.7 percent, employment 44,000 to 43,700; unemployed 4,600 to 3,700

If statistics for unemployed people across the three counties dropped because they actually found jobs, that impact would have been reflected in the overall employment numbers, said Brian E. Chezum, associate professor of economics at St. Lawrence University.

In St. Lawrence County, for example, there were 900 fewer people unemployed in April than a year ago; but if the majority of those people had found jobs, the total number of employed people would have correspondingly climbed, Mr. Chezum said.

“This data is suggestive of discouraged workers,” he said. “If you aren’t motivated to look for work to continue to receive unemployment benefits, then that will remove you from the labor force numbers. The unemployment rates have fallen, but given that the total level of employment has fallen, there isn’t compelling evidence that the economy of the north country has improved substantially.”

One of the main reasons for the steep drop in the number of jobless people counted by the state department could be the federal government’s expiration of long-term unemployment benefits at the end of December 2013, Mr. Chezum said.

He cited the St. Lawrence County numbers.

“Where did those 900 people go?” he said “If it’s the case that their unemployment insurance has run out, they may have gone into the pool of discouraged workers. That may be the structural explanation.”

This is how the state department calculates unemployment rates for counties: First, the labor force is calculated by adding together the total number of unemployed and employed people.

The number of unemployed is then divided by the total workforce to determine the percentage of people unemployed.

Alan L. Beideck, the department’s north country regional labor economist, said that April unemployment data does suggest that a portion of unemployed people have stopped looking for jobs. But data does not specify how many people actually found jobs, versus those who have stopped working.

“On the other hand, if you had the worst of all situations, 900 of the unemployed gave up looking for jobs because they felt they couldn’t find them,” Mr. Beideck said. “And in addition to that, you had 200 people who are no longer working.”

Most likely, there was a mix in April of unemployed people who quit looking for work and formerly employed people who left the workforce for various reasons, Mr. Beideck said.

“The truth is certainly somewhere between those two extremes, and for a number of different reasons,” he said. “For example, people could give up their jobs for retirement, or they might give up their jobs because they want to raise a family instead of being in the workforce.”

Even so, April’s numbers suggest that the drop in unemployed people is largely because they stopped searching for work, said Gregory A. Gardner, assistant professor of business at SUNY Potsdam. The way the state calculates jobless rates isn’t foolproof, he said, because it cannot accurately be determined whether drops in unemployment are due to people finding jobs, or if they’ve quit looking. Surveys conducted by the department ask unemployed respondents whether they have stopped looking for work.

“If the answer is no, then you don’t appear in the unemployment statistics,” Mr. Gardner said. “If you’re a stay-at-home mom, college student, or retiree and aren’t looking for work, you don’t appear in that data. And if people leave the workforce or go do something else, it makes it look like unemployment has gotten better and dropped.”

After reviewing Jefferson County’s statistics for the month of April, Mr. Gardner said that it would be safe to conclude that many unemployed people stopped looking for jobs for various reasons. But he said the department’s statistics cannot be used to draw any specific conclusions.

“With all things being equal, people are leaving the workforce,” he said. “To find out to what extent, it would take a lot more research. That’s why most economists I know don’t like using unemployment rates to track changes in employment. They would rather use the employment rate based on the total number of jobs and the population.”

Cheryl A. Mayforth, executive director of The Workplace in Watertown, said that the expiration of long-term unemployment benefits in December 2013 affected the number of unemployed people in the workforce in April compared to a year ago. But she said it’s difficult to tell the extent of that impact.

“A lot of the people who were in the pool of unemployed in 2013 were eligible for extended unemployment benefits that expired, and those people are not in the pool this April,” Mrs. Mayforth said, adding that some of them may have found jobs. “We had to assume that they went out and found work, but we don’t now what happened. And right now, every week we have people added to the unemployment rolls. We average about 40 to 50 people a week. Some of those people are on a temporary layoff, and we have a lot of seasonal workers in the spring.”

Mrs. Mayforth also suggested that people who retired this year, leaving the workforce, may have contributed to the drop in employed people across Jefferson County.

“We know that our workforce has decreased by 200 people. In 2014, statistics show that starting January 1, approximately 10,000 baby boomers turned 65 per day in the U.S.,” she said. “There are all of these people eligible to retire, but whether or not they are is a different story.

“We hear people saying that people just give up looking for work, but that’s not true because everyone has to make a living,” she said. “The majority of us have to support ourselves in some way.”

Surrendering the job hunt
The following data was collected by the Harris Poll from April 9 to 21 from among 1,500 unemployed adults.
• 47 percent of unemployed Americans say they’ve given up on looking for work.
• More than half of unemployed Americans say looking for work has been more difficult than expected.
• Two in 10 unemployed Americans receive unemployment benefits; among the rest, nearly a third aren’t eligible for work and 30 percent never applied.
• Nearly two-thirds of respondents said they don’t plan to go back to school to become more marketable; 44 percent said they wouldn’t relocate to another city for a job; 36 percent said they spent no more than five hours looking for work in the past week.
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