The nation's unemployment rate fell slightly in March, to 8.8 percent. More than 200,000 jobs were added to the payroll.

But as NPR's Zoe Chace reports, there are a lot of people who weren't counted in the unemployment picture, and they're being shut out of the economic recovery.

ZOE CHACE: Economist Bill Rodgers has a name for this recovery, and it's not a very nice one.

Professor BILL RODGERS (Chief Economist, Heldrich Center for Workforce Development, Rutgers University): The horrible recession, combined with this weak recovery, has lead to this bifurcated set of outcomes.

CHACE: The bifurcated recovery. That's what this story is about - where people who do have college degrees get hired, and people who don't are sitting on the sidelines.

DR. HEIDI SHIERHOLZ (Economist, Economic Policy Institute): And when in doubt, let's just plot this.

CHACE: I'm looking at a graph labor economist Heidi Shierholz just pulled up in her office at the Economic Policy Institute; it's a Washington think tank. She's not a big fan of the media hype around the release of the unemployment rate every month, because she feels like it doesn't tell the whole story.

Dr. SHIERHOLZ: If the unemployment rate is improving, that's really only good news if we see a bigger share of the labor force that's working

CHACE: The unemployment rate leaves out a lot of people - people who have stopped looking for jobs. In economist-speak, they've dropped out of the labor force.

DR. SHIERHOLZ: So when people who may have otherwise been unemployed drop out of the labor force, that makes the unemployment rate look better.

CHACE: People out there like Valerie Young.

Ms. VALERIE YOUNG: It's been almost three years now, and I haven't found anything.

CHACE: So she's stopped looking. Young has four kids, and a husband who's on disability. They live just outside Salt Lake City. Young left college early to get married and raise a family. When her husband got sick, she had to jump into the workforce - quick. Except...

Ms. YOUNG: Even though I have put in hundreds of applications, and dozens and dozens of resumes, I've been told by a lot of employers in interviews that they are looking for someone with more education, with a college degree.

CHACE: So she's taken out a loan to go back to college. She starts next week.

People like Young who don't have college degrees have dropped out of the labor force in a larger proportion than people who do have college degrees.

Shawn Smith wants to go back to college, too. He's moved to three states in as many years, looking for work. Nothing stuck. In the '90s, he was making such good money doing landscaping, he dropped out of school to work full time. Now, he lives with his parents in Largo, Florida.

Mr. SHAWN SMITH: Being 31 years old, wanting to go back to school, you know, just because you want to stop and do that, doesn't mean that life is going to stop. You know, your bills are still going to come in, so it would have to be something...

(Soundbite of clock)

Mr. SMITH: Ugh, clocks.

(Soundbite of laughter)

CHACE: Is that like, one of your parents' old clocks or something?

Mr. SMITH: My mom got it for 25 years with her company and so that - she hung it up.

CHACE: Do you think you'll ever get a clock like that?

Mr. SMITH: I would like to think I could. But I don't think that's something that will happen.

CHACE: Before the recession in 2007, people who had some college but didn't have a bachelor's -about 70 percent of them were working. When the recession hit, that number dropped to about 65 percent. And it keeps dropping.

Economist Heidi Shierholz picks it up from here.

Dr. SHIERHOLZ: And when jobs do become available, when there are - literally -millions of very desperate people out there, workers with higher education credentials can sort of go down the ladder. They can take jobs that are below their skills and experience. And workers with lower education credentials can fall off the bottom.

CHACE: If you can't even get on the ladder, how will you start to climb it?

Zoe Chace, NPR News.

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