Hiring up, but many jobless not looking
By Ron Scherer | Staff writer of The Christian Science Monitor

NEW YORK - After 20 months of looking for work and sending out hundreds of résumés, Jeffrey Schwab has given up trying to find another job as a draftsman. He's now taken early Social Security and is considering whether to sell his Bellingham, Wash., home to move to something smaller. "From what I can tell, there's not much to look for," says Mr. Schwab, who has 35 years of pipeline-design experience. "I am standing around with nothing to do."

Even though the economy has created 1.2 million jobs since January, some 265,000 people have dropped out of the job hunt during the same period. They would join some 19.1 million Americans in the same situation as Schwab, who are unemployed and not looking for work largely because they are convinced they won't find it. This figure, at a record level, is up 44 percent from 10 years ago.

If the job market continues to improve, this large number of people could decide to get back in the job market - which would hold the unemployment rate relatively high, even as new jobs are created.

"If this flow of nonworking Americans were to reverse, it would send the jobless rate toward 8 percent," says John Challenger of the outplacement firm Challenger, Gray & Christmas in Chicago.

That would certainly be the case in Pennsylvania, agrees the state's governor, Edward Rendell (D). The official unemployment rate is 5.4 percent, but it's "much greater," Mr. Rendell says, when factoring in men who have been cut off welfare and never got back into the workforce "and as a result never show up in the unemployment rolls."