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Jobless numbers improve as St. Louis labor force shrinks

Jobless numbers improve as St. Louis labor force shrinks

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Jobless for more than three years, Gene Cheatham is nowhere to be found in the federal, state and local databases that track unemployment.

Nor, for that matter, are more than 22,000 other St. Louisans who — like Cheatham — have dropped out of the workforce since the start of recession nearly five years ago.

Some of those people have retired. Some have left the region for a better job. But many, discouraged by the lack of job opportunities, have abandoned their search for a steady gig and are working off the books, or not at all.

Cheatham made another decision that’s common these days. At 57, after a long career in the electronics industry, he signed up for nursing classes at Southwestern Illinois College (SWIC) in January after his jobless benefits expired.

“I’m going to school,” said the Belleville resident. “That’s my job right now.”

Decisions like Cheatham’s have helped to drive a sharp drop in the unemployment rate in St. Louis in recent months, making the job market here appear perhaps rosier than it is.

After peaking at 10.4 percent in late 2009, and slowly easing down to about 9 by last year, the jobless rate here has dropped below the national average in recent months, from 8.8 percent in October to 7.8 percent in July. But that’s not because of any surge in hiring, but because of the way the number is calculated.

Each month, the Bureau of Labor Statistics surveys households across the country and asks how many people are working, or looking for work but can’t find it. Answer yes to either question, and BLS counts you as part of the “labor force.” It then divides the number of people who can’t find work by the total number of people in the labor force, and that’s the unemployment rate. But if you say “No,” — because you’re in school or retired or just given up — you don’t show up in the survey at all. And that’s been happening at an alarming rate lately.

Since October, the number of people who say they are in the labor force in metro St. Louis has fallen by 19,000. If they were counted as unemployed — instead of not counted at all — the jobless rate would be 9.1 percent

Economists warn that the local numbers are based on a small survey and are subject to revisions. They likely will be changed as there’s no apparent reason for such a sharp drop lately, said Howard Wall, an economist at Lindenwood University who closely tracks the local labor market.

“We didn’t fall off the cliff again. We’re just still in the same doldrums,” Wall said. “The most optimistic thing I’ve said in ages is that we’re not as bad as the data suggests.”

Disturbing trends

Still the numbers highlight some worrisome long-term trends for the region.

Even if the data is revised upward, St. Louis’ workforce basically hasn’t grown since the start of the recession, and has lagged the nation’s for years. And the region is getting older. Roughly 40 percent of the local workforce is over age 45, according to a study last year by St. Louis Community College, up from 30 percent in 1995.

Those people will be hard to replace as they inevitably retire, said Bill Emmons, assistant vice president at the Federal Reserve Bank of St. Louis, especially in a region with so little immigration. That will make it harder to grow companies, and jobs, here.

“We are going to be a slow-growth economy, there’s just no way around that,” Emmons said.

A few other regions — most notably Pittsburgh — have managed to grow their economies with fewer workers. They have done it by becoming smarter, even as they also got smaller, said Steve Johnson, executive vice president for economic development at the Regional Chamber and Growth Association. Along those lines, he said, the RCGA is launching a program with some of its member companies to help employees who started college but didn’t complete their degrees. A bachelor’s degree will help workers find better jobs, Johnson said, and will make the whole region more competitive for good companies

“It’s a pretty powerful predictor of a lot of things,” he said. “And the outlook for a lot of people who don’t have education credentials is frightening.”

Gobrandgo, a marketing firm in Benton Park that serves the small business community in St. Louis, has adapted a similar approach to meet the hiring demands in a shrunken pool of applicants. The start-up will be counseling area college undergrads on what awaits after they’ve earned a degree.

Founding co-partner Derek Weber said the motive is to provide guidance to students in advance of moving from college into a tough job market while identifying future employees.

Given the current environment, Weber says it is imperative that Gobrandgo set its hiring goals six months in advance “to make sure we always have three to four people in the pipeline.”

Right now, no matter what the numbers and the politicians say, the job market is a dismal place for too many people, said Jeff Aboussie, executive secretary-treasurer of the St. Louis Building and Construction Trades Council.

“When my good friend (Gov.) Jay Nixon talks about Missouri employment coming back I have to say, ‘Hey, stop. Don’t include us — we’re dying here,’” Aboussie said.

The Missouri Department of Economic Development declined to make an economist available to discuss the state jobs outlook.

Frustration abounds

Some attrition, of course, is a normal component of any business cycle. Employees retire, relocate or simply leave for another job. With a steady pipeline of young people launching careers, experienced workers looking for a better job and transplants moving into town, the pieces generally fall into place — until a bad economy disrupts the flow. Then empty jobs don’t get filled. It becomes harder to move. And people on the outside can’t break in, and get frustrated.

Mike McCarty sees the human toll of that frustration every Monday morning at the St. Mark Presbyterian Church in Ballwin, where he is one of the leaders of Businesspersons Between Jobs, a support and networking group for the unemployed. Eventually, some people stop coming, and it’s not because they found good work.

“I’ve said all along that the worse thing about this recession is that so many people have given up,” he said. “It’s really a poor commentary on everything that things are so sad that they’ve given up.”

The majority of the people BBJ sees pulling the plug on the job search, McCarty says, are experienced workers over 50 years old who have opted for early retirement or scrape by on part-time jobs.

Betty Hamlin, 54, is working in a temporary position while she decides whether to incur an additional $6,000 in education expenses – on top of the $6,000 she has already spent – to earn a degree in occupational therapy from St. Louis Community College.

As in the case of Gene Cheatham, the frustrated Blackjack resident turned to higher education after repeated rejections following her layoff as a project manager with a local telecommunications firm.

“They think unemployment is dropping and it’s just not true,” Hamlin said. “There’s a lot of people who’ve just stopped trying.”

There’s additional evidence that younger workers — especially in the battered construction industry — are leaving town for better opportunities.

That’s what they need to do to feed their families, said Aboussie, but it poses a long-term risk to a region that will need skilled young workers in the future.

“If they’re earning good wages and benefits, they may ask ‘Why should I come back?’” he said.

Exploring options

And while some have taken their talents elsewhere, social media sites such as LinkedIn indicate a significant segment of the jobless population has stayed in St. Louis and hung up their own shingles as consultants and other kinds of freelancers.

Known as “LLCs” (Limited Liability Companies or corporations), these entrepreneurs represent another class of the unemployed population who have disappeared from the local labor market.

“They’re doing what I’m trying to do, recreate their future,” said Roni Chambers, who has been the volunteer executive director for the Go! Network, a downtown support group for displaced middle managers, since 2010 when she was laid off by Anheuser-Busch.

Cheatham, a member of the Go! Network, has tried a lot of things over the past several years, bouncing from job to job in the electronics industry and sales, trying to stay ahead of layoffs and cutbacks.

“You just become numb to it after awhile,” he said. “To use an old cowboy term, ‘When you fall off you just have to find another horse to ride.’ You have a pity party, tell your wife what happened and get back to business.”

Climbing back on the horse wasn’t that easy after Cheatham’s last layoff in early 2009. It was the height of the recession, and hiring managers willing to bring on a 54-year-old were hard to find.

Then, from misfortune – his wife’s diagnosis of a rare form of colon cancer — came an epiphany.

June Cheatham was so impressed by the role her husband played in her recovery that she suggested he enroll in nursing school.

This past January, Gene Cheatham did just that. He is currently taking a full load of the prerequisites he hopes will qualify him for formal admission to the core registered nursing program at SWIC next year.

If admitted, he will graduate in 2015. Even at the age of 60, Gene Cheatham says he envisions few obstacles landing a job in the high-growth healthcare industry.

“The great thing is that I can probably move anywhere and get a nursing job,” he said. “I don’t have to be landlocked in Illinois.”

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Steve Giegerich is a reporter for the St. Louis Post-Dispatch.

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