Courtesy of Mish.
Reader Denise wants to know precise definition of who is not in the labor force. That’s easy enough. The answer is found straight from the list of BLS frequently asked questions.
Who is not in the labor force?
Labor force measures are based on the civilian noninstitutional population 16 years old and over. (Excluded are persons under 16 years of age, all persons confined to institutions such as nursing homes and prisons, and persons on active duty in the Armed Forces.) The labor force is made up of the employed and the unemployed.
The remainder — those who have no job and are not looking for one — are counted as “not in the labor force.” Many who are not in the labor force are going to school or are retired. Family responsibilities keep others out of the labor force.
“Looking for a Job” is Key to Understanding Reported Unemployment Number
The BLS description seems logical enough except it ignores those who want a job but did not look in the past four weeks.
BLS questions (shown below) will root those people right out of the labor force.
That raises another question about what constitutes looking for a job. Reading the want-ads in the newspaper or even doing online searches does not qualify as “looking for a job”.
Applying for a job online constitutes looking for a job, so does going on an interview, and so does sending out a resume.
Who is Counted as Unemployed?
Here is the BLS description of Who is Counted as Unemployed?
Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. Actively looking for work may consist of any of the following activities:
- Contacting:
- An employer directly or having a job interview
- A public or private employment agency
- Friends or relatives
- A school or university employment center
Sending out resumes or filling out applications Placing or answering advertisements Checking union or professional registers Some other means of active job search Passive methods of job search do not have the potential to result in a job offer and therefore do not qualify as active job search methods. Examples of passive methods include attending a job training program or course, or merely reading about job openings that are posted in newspapers or on the Internet.
Workers expecting to be recalled from temporary layoff are counted as unemployed, whether or not they have engaged in a specific jobseeking activity. In all other cases, the individual must have been engaged in at least one active job search activity in the 4 weeks preceding the interview and be available for work (except for temporary illness). …
