Many Do Not Get Counted

Robert London was a Ford car salesman with his share of the comforts of middle-class life in Southern California, He drove a leased Mazda RX 7, rented a pleasant apartment in the Los Angeles suburb of Glendale and had a closetful of sports jackets and ties. A bachelor, London spent almost all of his income, which in better times reached $2,000 a month.

Then interest rates rose and public enthusiasm for American cars fell. London's sales skills were not enough to overcome those obstacles, and a year ago his monthly take-home line dropped to $250. His job, in effect, disappeared. He recalls sadly, "Salesmen don't get fired. They give up."

London resigned, only to find that car sales were slow everywhere else. Worse, his training in accounting dated back more than 30 years and was obsolete in a computerized era. He was 54 and unable to find work. His finances slid downhill fast. He had no significant savings. He could not get credit or loans. Because technically he had quit his job, he did not qualify for unemployment benefits. Within four weeks he wound up in Los Angeles "with two dollars in my pocket looking for some place to eat." A passer-by steered him to the Union Rescue Mission. A year later London is still there, receiving meals, a bed in an eight-man dormitory room and an $8 weekly allowance. He plans to stay. He has given up hope of finding a job. He made one last-gasp effort in June, touring every car dealership in Los Angeles. "The business has changed," he says, "and I do not see how it is ever going to pick up for a man my age."

Even though he would like a job, London is not officially regarded by the Government as unemployed. Instead he personifies the "discouraged worker," whom the Bureau of Labor Statistics defines as a person who wants to work but cannot find a job, and thus has not looked actively within the past four weeks. Had London and approximately 1.2 million other "discouraged workers" been included in the December unemployment report, the painful rate of 8.9% would have risen to 9.9%.

To researchers at the BLS, the rationale for excluding these dispirited jobless Americans is that the unemployment rate is supposed to chart fluctuations in the conditions of the active labor force, not to paint a complete portrait of human hardship. London and other discouraged workers may be right that they could not find jobs; but BLS researchers reason that the discouraged are not job seekers if they are not offering themselves to employers. Thus the discouraged are lumped with about 60 million other Americans who are classified as "not in the labor force," because they are in school, disabled, running households or retired.

Discouraged workers come disproportionately from groups that have tended to be the last hired and lowest paid--women (63% of the discouraged) and members of racial minorities (30%). Typically the discouraged tend to be unskilled and undereducated, and accustomed to long periods of unemployment. But one important measure of the severity of the current recession is that a growing share of the discouraged are men and a significant number are white and white-collar--the people usually thought to be best insulated from economic downturns. From the end of 1980 to the end of 1981 the total of discouraged grew by 150,000 to 1.2 million; that is, according to the BLS, the largest number since World War II. Some 72% of them blame market conditions for their unemployment, while 28% complain about discrimination because of race, sex or age.

BLS researchers estimate that more than half the 1.2 million people who portray themselves as discouraged workers either have never actually sought a job or stopped looking at least half a year ago. Some are virtually unable to work because of physical or emotional problems. Others are dropouts from society, finding it easier to lead a marginal day-today existence or to hustle odd jobs for unreported cash as part of the so-called underground economy. Although most discouraged workers claim they are willing to take any job, even the lowest paid and most menial, some are holdouts who would rather stay unemployed than accept something they regard as beneath their skills and dignity.

Though not all of the newly and truly discouraged are protected by the social safety net, most have found some economic niche. London turned to charity. Larry Fischer, 30, of Rockaway, N.Y., depends on his family. He lives at home with his mother and retired father, who is collecting Social Security benefits. After 8 1/2 years as a game attendant at Pinky's Fascination Arcade in Rockaway, Fischer was laid off in September. His job demands are modest: he offered himself to supermarkets, diners and department stores as a stock boy. But he was turned down. Fischer hopes to return to working life some day, but for now he has largely stopped looking.

Many, perhaps most, of the discouraged turn to welfare. It is a necessity for Bernie Bell, 35, of Peoria, Ill., who has not found work since he was laid off from a Caterpillar Tractor plant in July 1980. He was making $10.57 an hour as a janitor. Last October, about the time his unemployment benefits ran out, Bell started accepting welfare. He also decided to stop looking for jobs until the economy around Peoria improves. Said he: "I've been all over this area and there ain't nothing out there." The decision to accept his unemployment as semipermanent stemmed from "an accumulation of experiences: the way things were going and the upcoming layoffs [scheduled at Caterpillar]. Everything just kind of mounted up and I had had it. Right now, around here even the fast-food restaurant jobs are being taken by college graduates."

Bell, his wife Marilyn and three children, ages 14, 7 and 5, get by on $413 a month in Aid to Families with Dependent Children, $178 a month in food stamps, and sporadic charity from neighbors, including food and hand-me-down clothes. They have managed to pay the mortgage on their modest house, but they run out of money for food near the end of every month.

Beyond the limbo of the 1.2 million discouraged there is a further limbo: people whom the government counts as employed, even though they are subsisting on odd jobs, temporary work or minimal part-time employment. The BLS counts as employed anyone who worked even one hour per week for pay. That designation means that Dean Schulte, 34, of Detroit is listed as neither discouraged nor unemployed. Schulte lives in a $30-a-week hotel room in the city's rundown Cass Corridor. He shows up weekday mornings at a nearby hiring hall for day laborers, Extra Temporary Services of Michigan Inc. Three or four days a week he gets an assignment netting him about $23 less carfare. His hope is that one of his temporary employers will offer him a permanent job. He has not had one since 1974.

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