WhyEveryoneSuffersWhenJobSeekersGiveUpWhenworkersdropoutofthelaborforce,itaffectsmorethantheworkersthemselves.ByHYPERLINK"http://money.usnews.com/topics/author/liz_wolgemuth"LizWolgemuthPosted:July14,2010Amongthesurprisesinlastmonth'sjobreportwasthedownwardslideintheunemploymentratefrom9.7percentto9.5percent.Mostofthetime,highunemploymentratesarebadandlowunemploymentratesarebetter.Butwhenthepercentageofout-of-workAmericansdippedinJune,itwasdrivenlargelybya652,000dropinthelaborforce.Somejobseekersmightseethis,onitsface,asagoodthing—fewerlaborforceparticipantsmeanslesscompetitionforjobs.Thetruthismuchlesshelpful.Whenableworkersdropoutofthejobmarket,theirhouseholdsmakedowithlessincome,andtheirlong-termfinancialhealthmaybethreatened,assavingsaredepleted.Theaggregateeconomysuffers,too,asitchugsitswayoutofrecession—itlosestheircontributionsasworkersandtheirbuyingpowerasconsumers.Thenumberofdiscouragedworkershasskyrocketedoverthepastyear,asjob-cuttinghasslowedbuthiringhasremainedsluggish."Discouraged"isaLaborDepartmentlabelforunemployedworkerswhohavelookedforjobsoverthepastyearbutnotinthepastmonthbecausethey'velosthopeoffindinganything.Lastmonth,therewere1.2milliondiscouragedworkers,some52percentmorethanthe793,000discouragedworkersinJune2009.Lastmonth,thenumberofdiscouragedmaleworkerswasthesameasthetotalnumberofdiscouragedworkers—maleandfemale—inthesamemonthayearago.Thegrowthindiscouragedworkersisclearlycorrelatedwiththehighnumbersoflong-termunemployed—aspeoplewhohavespentayearortwolookingforworkunsuccessfullybegintolosethewilltokeepsearching.Withfivejobseekersforeveryjobopening,andsomejobsnotlikelyeverreturning,thesearchhasbeenincrediblydifficultformany.Thisisworrying,saysSungWonSohn,aneconomistatSmithSchoolofBusinessandEconomics."Ifyoulookatthetotalunemployment,about50percentarelong-termunemployed...andIsuspectthatalotofthesepeoplearejustdroppingoutofthelaborforce,saying'thisisjustawasteoftime,'"Sohnsays."It'snotonlyaneconomicproblembutasocialproblemaswell.Many