What is the labor force?

The labor force, or workforce, is the total number of people currently employed in a given population, plus the number of people who are unemployed and actively looking for work. This group of people is measured by the labor force participation rate, which is a   key metric used by experts to evaluate employment data and assess current labor market conditions.

Who is included in the labor force?

The U.S. Bureau of Labor Statistics' (BLS) Current  Population Survey  collects data on this subcategory of the total working-age population. While it counts employees and unemployed, active job seekers as part of the labor force, it specifically evaluates civilian, working-age adults (16 years and older). This data does not include the following groups:

• Active members of the US military
• people living in skilled nursing homes and other care facilities
• Correctional facility and detention center population

Who is considered employed in the workforce?

An employed person is generally anyone age 16 or older who works for pay or benefits. This includes full-time, part-time, and temporary work, as well as self-employment. During any given BLS survey reference week, you are considered an employed part of the labor force if the following apply:

• You completed one hour or more of paid work for an employer or your own business.
• You have worked at least 15 hours without pay at a family member's business.
• You were temporarily absent from work (  due to  PTO  ,  parental leave , or a strike, etc. ), but are still on the job.

Basically, you are considered employed only if you have a job or will be returning to a job in the near future.

Who would be considered unemployed in the workforce?

If you do not have a job, but you are available for work and are actively looking for a job, you are classified as the unemployed part of the labor force. This survey data includes individuals who have been laid off and are waiting to be called back.

To be “actively looking” for work, you must do one of the following within four weeks of the survey reference time frame:

• Contact employers, friends or employment agencies for work-related inquiries
• Submit resume or job application
• Post or respond to job postings
• a job interview
• Use another method of active job searching

Passive job search activities  , such as simply reading job listings or attending job training sessions, don't count. To qualify, you must have done something that directly leads to a potential job offer.

Who is not included  in the labour force  ?

The labor force does not include the part of the population that does not have a job and is not currently looking for a job. For the survey, you may not be considered part of the labor force if you:

• are under the age of 16
• Currently attending school and not looking for a job
• have family responsibilities that prevent you from working (such as being a stay-at-home parent)
• Are you retired from your career?
• are not interested in getting a job for any other reason

To determine if people are not interested in seeking employment, government agencies collect labor force data on the following:

• Current willingness or availability for work
• Reasons for not working
• Job search activity during the past year

Why is labor force data important?

Measuring and monitoring the labor pool is important because it reflects the number of resources available in the job market and the overall health of the economy. This way, if an industry is experiencing a labor shortage, employers can have a rough idea of ​​how many workers are available.

Labor force trends can change over time, so be sure to keep track of the most recent statistics. By leveraging current data and trends in the labor market, HR professionals and business leaders can make informed hiring decisions,  create targeted recruiting strategies  , and more.

Analysis of labor market trends

It is normal for the labor force participation rate to fluctuate slightly each month. However, several factors can significantly affect the labor pool, causing large changes. Examples of behaviors that commonly affect labor force data include:

• The number of students graduating from high school and entering the workforce is greater than the number of students going on to college
• There are fewer people able to replace retiring workers
• social expectations that influence who is more likely to enter the workforce (such as one parent or carer compared to another)

The labor pool also shrinks during economic recessions and at times when people feel they are less likely to find a job. For example,  the Great Recession of 2008   led to a steady decline in  the U.S. labor force participation rate . It fell from above 66% in 2007 to around 63% in 2013, where it remained stable for the next seven years. In 2020, it fell to just above 60%, likely due to the effects of the COVID-19 pandemic on businesses.

Layoffs, corporate cutbacks, and highly competitive job markets can discourage candidates from applying. So, even if they are willing and able to work, some people stop looking for a job and effectively remove themselves from the labor force.