People excluded from the Labor Participation Rate Analysis

There are over 99,998,000 individuals excluded from the labor force and the unemployment statistics

People not in the Labor Force are defined by the BLS. Among the over 99 million plus individuals excluded from the labor force in July 2020, there were 701,000 discouraged workers - an increase of 333,000 from the prior year and 684,000 last month. Covid-19 was a major driver.

The first effects of the Covid-19 shutdown are reflected in this data.

There are 90,995,000 who just do not want work at all. That is an increase of 2 million individuals from the same month last year.

Labor Participation Rate - People not in labor force
Analaysis of BLS data by Janco Associates - data is as of August 2020

Projected Labor Participation Rate

Baby boomers retiring is one of the factors in the continued fall in the Labor Participation rate.

What does all of that mean. It just means there are a significant number of individuals who just do not want to work. The categories for classification are:

  • Total not in the labor force - individuals not included in the total labor force and excluded completely from the total unemployment rat
  • Do not want a job now - individuals who if given a job opportunity now would not take it
  • Want a job - individuals who if given a job would take it
  • Did not search for work in previous year - individuals who have just stopped looking for work over 12 months ago.
  • Searched for work in previous year - individuals who have actively looked for work in the past 12 months
  • Not available to work now - have other commitments and can not accept or do not want to accept a job now.
  • Marginally attached (available to work now) - working part time
    Discouraged over job prospects - Are discouraged about the opportunity to find a job
    • Reasons other than discouragement
      • Family responsibilities
      • In school or training
      • Ill health or disability
      • Other

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NOTE: As the economy improves typically more are encouraged to look for work. That will cause the participation rate to increase and the unemployment rate to also increase. That is the one of the systemic factors in the general unemployment rate. A true unemployment rate would include all eligible individuals not just those who are looking for work. One other factor are the number of people who are retired. They may or many not be included in the core number included in this statistic.