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Unemployment Rate Low, But Number of Americans ‘Not in Labor Force’ Near All-Time High

Unemployment Not in Labor ForceThe October 2014 Employment Situation Summary released by the U.S. Bureau of Labor Statistics (BLS) on November 7 reported a nationwide unemployment rate of 5.8 percent, the lowest level in more than six years.

That unemployment rate might be somewhat misleading, however. A report released recently by the Pew Research Center indicates that while the U.S. unemployment rate is low, the number of people who are "not in the labor force," meaning they are not counted among the unemployed in the BLS survey, is near an all-time high.

BLS reported that about 37 percent of America's civilian population, or about 92 million people, currently belong in the "not in the labor force" category because they are not employed and have not searched for work recently, therefore they are not considered unemployed by the BLS even though they don't have a job. About 93 percent of those not in the labor force, or 85.9 million, were not in the labor force simply because they did not want a job, the BLS reported.

While some have speculated that large numbers of retiring Baby Boomers are responsible for the spike among individuals not in the labor force, the BLS found that an increase in the percentage of young adults between the ages of 16 and 24 who don't want a job is largely responsible for the increasing numbers of those not in the labor force. The percentage of individuals in that category has risen to 39.4 percent for the first 10 months of 2014, whereas it was 29.5 percent as recently as 2000. The BLS reported a much smaller increase in that category among adults ages 25 to 54 (16.9 percent) and a decline in that category for adults ages 55 and older (58.2 percent).

BLS disclosed in the October 2014 employment report that the number of people "marginally attached" to the labor force had slightly declined from September down to 2.2 million. Someone who is marginally attached to the labor force is currently not employed but available for work and has searched for a job in the previous year, but not in the previous four weeks, according to the BLS. Marginally attached workers are not considered unemployed by the BLS.

While some may believe that feelings of discouragement about job prospects account for a large number of those marginally attached to the labor force, the BLS found that only 35 percent of the 2.2 million (about 770,000) had not recently searched for a job because they were discouraged. The biggest reason was the "other reasons" category that included child care issues, transportation problems, and other difficulties, with 37.1 percent (about 816,000). Other reasons for being marginally attached to the labor force included family responsibilities (11.3 percent) school or training (10.4 percent), and ill health or disability (6.0 percent).

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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