Who is not counted in the labor force?

People who are neither employed nor unemployed are not part of the workforce. This category includes retired people, students, people who care for children or other family members, and others who are not working or looking for work. Since discouraged workers are no longer seeking employment, they are not considered active in the workforce. This means that the overall unemployment rate, which is based solely on the number of active workers, does not take into account the number of discouraged workers in the country.

Many full-time university students have only a part-time job or have no jobs at all, but it doesn't seem appropriate to consider them as people suffering from the hardships of unemployment. The Census Bureau asks a series of questions to divide the adult population into employed, unemployed, or non-member of the workforce. Therefore, a person who has no work but is currently unavailable for work or who has not actively sought work in the past four weeks is considered excluded from the workforce. Economists refer to this third group of people who do not work and are not looking for work as if they were outside the labor force.

The Bureau of Labor Statistics (BLS) of the Department of Labor defines discouraged workers as “those who are not part of the workforce and who want to work and are available to work, and who have sought work at some point in the previous 12 months, but are not considered unemployed because they had not sought work in the 4 weeks prior to the survey. More specifically, discouraged workers have not actively sought work in the past four weeks; therefore, they are not considered unemployed.

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