Wichita’s shrinking labor force: Where did the workers go?

More than 20,000 Wichitans have disappeared – and nobody knows exactly where they went.

In July 2009, after a slew of layoffs in the Wichita area, desperate people everywhere were looking for work. The combined number of those working and those unemployed but looking for work – dubbed the labor force – surged to nearly 330,000, an all-time high.

But most of the newcomers didn’t find jobs, and soon the labor force began to drop. Since late 2010 the civilian labor force in the Wichita area has bounced between 300,000 and 310,000.

So, 20,000 to 30,000 people in the Wichita area stopped looking for work. They’re not picking up unemployment checks. They’re just gone.

Where did they go?

Wichita’s puzzle is a part of the national puzzle of a shrinking workforce.

Nationwide, the percent of working and unemployed adults not in the military or in prison or other institutions hit a high of 67.3 percent after three decades of women joining the U.S. workforce. But women's participation fell modestly through the mid-2000s – then dropped sharply from late 2009 through 2013.

Today, the overall participation rate is 63.2 percent, the lowest rate since August 1978. Those 4 percentage points represent millions of people.

The rates are 57 percent for women and 70 percent for men.

The cause of the drop is debated by economists. Some say it reflects nothing more than the start of retirement for the outsized baby boom generation, as 10,000 people a day cross into retirement age. That’s a big – but fully anticipated – problem for the economy because of the pressure it puts on Social Security, Medicare and Medicaid.

But other economists worry that the drop reflects troubling deep-seated economic, demographic and cultural shifts that could mean fewer people working in the future.

These observers cite different reasons for a shrinking workforce: forced early retirement, going on Social Security disability, leaving the area, and sitting at home discouraged.

And much of that is bad for the country because it means slower long-term growth, said Donna Ginther, director of the Center for Economic and Business Analysis at the University of Kansas.

“It means fewer workers demanding fewer goods, and it doesn’t bode well for economic growth,” she said.

Discouraged workers

Nobody has been more talked about in the downturn than the discouraged worker.

These are people who have looked for work in the last year, but not for the last month, because they don’t think they will find jobs. It’s a gripping idea because it personifies everything terrible about the emotional toll of the recession and its aftermath. Nationally, this number was 866,000 people in August.

The number of discouraged workers in the Wichita area generally ranged between 1,000 and 3,000 until last year and is now in the hundreds, according to a quarterly state survey. But because the sample size is so small, the statistics bounce around a great deal and are more suggestive of the magnitude than exact, said Efua Afful, labor economist with the Kansas Department of Labor.

These are Kansans who say they stopped looking because they couldn’t find work, lack the necessary training or were told they were too young or too old for particular jobs.

Discouraged workers also fall into a broader category called by labor economists the “marginally attached.” These are people who have looked for work in the last year, but not in the last month, for reasons that also include personal circumstances – beyond being discouraged – such as taking on more family responsibilities or ill health. In the Wichita area, the number of marginally attached workers has mostly ranged between 10,000 and 18,000 every quarter during the downturn.

In reality, of course, such personal reasons are often influenced by economic factors: If jobs are hard to find, staying home to take care of preschool children or rest an aching back seems to make more sense.

Deloris Wendling, 62, a computer programmer, was laid off at Cessna Aircraft in 2009. She did contract work ending in 2011 and looked hard for a year after that. After that she took classes, networked and tried to figure out what to do with her life.

Single, she has lived on savings and help from family. She’s very frugal, owns her house and drives a 1991 Toyota truck with 220,921 miles on it. Twice since 2000, she said, she has saved up money to buy a new vehicle, but had to live on the money after being laid off.

She makes clear that she’s not interested in pity, but the last few years have been discouraging.

“After putting out so many applications, people see your name and just toss it,” she said. “You’re doing yourself an injustice to keep doing it. You can only apply so many times.”

These days, she’s considering switching careers. She’s studying for her real estate license.

More are disabled

Social Security disability is a surprising destination for laid-off workers because the two don’t seem connected. But since the recession started there has been a surge in people nationally and locally qualifying as disabled.

In the region covered by the Wichita Social Security office, the number of people on disability has risen 22 percent since 2008, to nearly 19,000 in late 2012. The biggest year for disability claims was 2009, when 1,260 people qualified.

Most of those claiming disability have no connection to layoffs or economic distress, but there definitely is a connection for some, say experts.

Teresa Click of Disability Professionals in Wichita said that the Social Security Administration disability rules change when applicants reach 50 years old and even more when they reach 55. Until then, the assumption is that people who are disabled for at least a year can retrain and find less demanding work. After that, she said, the rules make it easier to claim disability.

She said she sees a lot of people with chronic injuries in physically demanding jobs, such as construction, manufacturing and nursing. Construction and manufacturing were two of the hardest hit local sectors during the recession.

Older workers who are laid off and facing an uncertain future may decide that their painful sciatica is just too much to keep fighting, she said.

“I see a lot of people who can’t go back to past work and don’t have transferable skills,” she said.

Retiring early

Not everyone who left the workforce was laid off.

Many retired early, with or without a nice going-away package. Others were laid off and decided to retire rather than look for a new job.

The number of new retirees handled by the Wichita Social Security office surged in 2008. It shot up from 650 retirees in 2007, to 1,020 in 2008, to 2,235 in 2010. Then it tapered to 1,965 in 2011, 1,935 in 2012 and 1,730 in 2012 as the shedding of employees eased.

Many of these were people who would have retired anyway, but many were not. The number of new retirees in the Wichita area rose considerably faster than the number of people turning 65, according to the Social Security Administration.

Cal Engel, a wiring design engineer, retired from Boeing Wichita after nearly 29 years this year at age 61, five years earlier than he planned, and started taking his pension.

He and his family lived well within their means and built up a sizable retirement fund, so they aren’t in any trouble financially. But, he said, he would have liked to keep working.

“I basically enjoyed what I did most of the time and didn’t feel any desire to quit, so why not keep working?” he said.

The pension is less income, he said, but he understands he’s far better off than most in similar situations. He keeps his health coverage and he has the option of waiting to claim Social Security, which will increase the size of his monthly payments. His wife works part time as office manager for First Baptist Church.

He was offered a chance to go to Boeing’s facility in Oklahoma City, but turned it down.

“Twenty-nine years of friendships and family are here,” he said.

Leaving Wichita behind

But many, often younger, workers did wind up leaving Wichita.

In 2010-2012, the Wichita metro area saw a net out-migration of about 4,600 people, according to the Census bureau. The area showed a net loss of 6,200 people to places elsewhere in the United States. That loss was partly offset by a net gain of 1,600 people who came from other countries, according to the Census.

The area saw an overall population gain because there were almost twice as many births as deaths.

Among those leaving Wichita for economic reasons were Micah and Breanna Frayne.

Micah Frayne was laid off from Cessna in 2009, where he was a production foreman on the CJ line. He could see the layoff coming, he said, so he applied for and got a job at Bell Helicopter in the Dallas-Fort Worth area.

Two years later, he went to work at his father-in-law’s wholesale vinyl siding distribution business in the Dallas-Fort Worth area, where he runs the warehouse.

Frayne, 31, has nothing bad to say about Wichita, but, at this point, it doesn’t look likely that he’ll be back.

“There’s nothing wrong with Wichita,” he said. “I’ve got friends and family there, but a bigger city has more things to see and do. It would take a lot for me to move back.”

Choosing college

Some have dropped out of the workforce to go back to school. This, say economists, is the best outcome because it means people are gaining new skills needed for the jobs that are actually out there.

One of the big fears that economists and policymakers have is that those who are out of work for any period of time see their marketable skills erode. At some point they are no longer employable in their old jobs. That’s a big loss for the local economy as well as the person involved.

Jeremy Hill, an economist at Wichita State University, said that many companies – particularly in manufacturing and construction – he’s talked to complain that they can’t find enough people with the right skills. Even he was skeptical, at first, he said. These are the industries that have had the most layoffs, so there should be thousands of people sitting around waiting to be rehired.

But these are jobs that require ever-higher or new skills, and older workers may not have the skills for the new jobs, he said. This is a phenomenon called the skills gap.

The area’s community and technical colleges saw a pretty good gain in enrollment at the beginning of the recession when there was plenty of federal stimulus money for job training. Butler Community College saw a jump of 13 percent in 2009 and 6 percent in 2010.

As federal retraining dollars have fallen, so have the number of laid-off workers seeking retraining. Butler’s enrollment has fallen each of the last three years.

But there are some who are bucking that trend.

Christina Saville worked at Corporate Lodging Consultants’ call center until 10 days ago. She liked her job, but last week started a 10-week sheet metal assembly training program at Wichita Area Technical College.

She said she has been promised an interview at Spirit AeroSystems upon completion and hopes for the best. Her mother already works at Spirit.

A single mother with three children, Saville went through an acrimonious divorce and doesn’t get child support, she said.

It’s been hard to make ends meet, even with help from family and public assistance. Saville, 32, said she drives the same car she’s had since high school.

She’s paying for the training at WATC herself, she said, although she may get Pell Grant money to pay for it.

Still, interviewed last week, she sounded upbeat – excited about the possibility of a higher paying job and moving upward in life.

“You’ve got to be positive for positive things to happen,” she said. “With all the crap I’ve dealt with, you have to keep your head up and realize that life doesn’t always suck.”