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6.3: Labor Force

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    The first task before examining any labor related statistics is to define the labor force. This makes sense because to assess the dimensions of an unemployment problem, we first need to determine who wants a job. The labor force is very much like a giant pool of potential workers where businesses go when they have positions to fill. This concept of the labor force is rather straightforward. However, determining who should be counted as a member is not so easy.

    To be considered a member of the labor force, individuals must meet the following qualifications:

    16 years of age or older, residing in the 50 states and the District of Columbia, not an inmate of an institution (e.g., penal for mental facility, home for the aged), and not on active duty in the Armed Forces.

    In the civilian non-institutional population classified as either employed* or unemployed**.

    *Employed people consist of:

    • All people who did any work for pay or profit during the survey reference week.
    • All people who did at least 15 hours of unpaid work in a family-operated enterprise.
    • All people who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons.
    • **Unemployed people are:
    • All people who were not classified as employed during the survey reference week made specific active efforts to find a job during the prior 4 weeks and were available for work.
    • All people who were not working and were waiting to be called back to a job from which they had been temporarily laid off.

    Who isn’t a member of the labor force? Many who do not participate in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force. Still others have a physical or mental disability, which prevents them from participating in labor force activities.

    When it comes to the labor force, how do you treat someone who is able to work but has given up looking for work due to, perhaps, a lengthy and fruitless job search? How can we count people as part of the labor force when they have, in essence, taken themselves out of the labor force? We call these able-bodied people discouraged. Identifying and counting discouraged workers is difficult. In June 2002 there where an estimated 337,000 discouraged workers in the U.S. During periods of recession the number of discouraged workers increases and decreases during the recovery and expansion stages of the business cycle. We will explore in greater detail how the government counts discouraged workers later on in this unit when we discuss the unemployment rate.

    The labor force is not a fixed number of people. It increases with the long-term growth of the population. See figure 3.

    Chart 36, Chart element

    Figure 3: U.S. Labor Force and Population 1950-2009*

    Source: Bureau of Labor Statistics

    The labor force also responds to economic forces and social trends and its size changes with the seasons. On average in 2009, there were roughly 135 million employed and 6.7 million unemployed making up a labor force of 141.7 million people. There were about 70 million people out of the labor force. See figure 4. 

    Chart 33, Chart element

    Figure 4: U.S. Labor Force and Population 2009

    Source: Bureau of Labor Statistics

    This page titled 6.3: Labor Force is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Martin Medeiros.