Labor Force Participation: An Analysis of Discouraged Workers and the Marginally Attached, Schemes and Mind Maps of Statistics

Download Labor Force Participation: An Analysis of Discouraged Workers and the Marginally Attached and more Schemes and Mind Maps Statistics in PDF only on Docsity! U.S. Department of Labor • U.S. Bureau of Labor Statistics Summary 09-04 / April 2009 six alternative measures of la- bor underutilization published monthly by BLS and referred to as U-1 through U-6.5 Dis- couraged workers are included in U-4. The U-5 and U-6 mea- sures, which are broader still, include all persons marginally attached to the labor force; U-6 also includes involuntary part-time workers. All of these data come from the Current Population Survey (CPS), a monthly survey of some 60,000 households that is the source of the national unemployment rate and many other labor market indicators. Information on persons mar- ginally attached to the labor force has been collected since 1994. This Issues paper was pre- pared by Sharon Cohany, an economist in the Division of Labor Force Statistics, Office of Employment and Unem- ployment Statistics. E-mail: CPSInfo@bls.gov; Telephone: (202) 691-6378. Information in this sum- mary will be made available to sensory-impaired individu- als upon request. Voice phone: (202) 691-5200. Federal Re- lay Service: 1-800-877-8399. This report is in the public do- main and may be reproduced without permission. □ Ranks of Discouraged Workers and Others Marginally Attached to the Labor Force Rise During Recession When economic condi- tions deteriorate, great- er attention is paid to persons who are without work and seeking jobs—the unem- ployed. At such times, there is also greater interest in a group of persons who do not meet the official definition of unemployment but who have shown interest in labor force participation. These individu- als—referred to as “marginally attached to the labor force”— wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not actively searched for work in the past 4 weeks. The number of persons who were marginally attached to the labor force increased sharply during the current recession, rising to 2.1 million in the first quarter of 2009.1 (See table 1 and charts 1 and 2.) Their num- ber increased by 541,000, or 35 percent, from the first quarter of 2008.2 By comparison, dur- ing that same 1-year period, the number of unemployed rose to 13.5 million, an increase of 5.5 million, or 68 percent. Among the marginally at- tached, the number of discour- aged workers rose to 717,000 in the first quarter of 2009, a 70-percent increase from the first quarter of 2008. Discour- aged workers are persons who are not currently looking for work because they believe that there are no jobs available for them. Relative to their share of the labor force, young people, blacks, and, to a lesser extent, Hispanics and men were over- represented among discouraged workers in the first quarter of 2009. (See table 2.) 3 The remaining 1.4 million persons who were margin- ally attached to the labor force wanted a job but had not looked for work in the past 4 weeks for reasons such as family respon- sibilities or transportation prob- lems. The number of persons in this group also expanded dur- ing 2008, although to a lesser extent (22 percent) than dis- couraged workers. Compared with the labor force, other mar- ginally attached persons were more likely to be female, black, and under the age of 25. The marginally attached— including discouraged work- ers—account for a small pro- portion of the total number of persons not in the labor force: 2.6 percent of the 81.3 million persons not in the labor force in the first quarter of 2009 were classified as marginally at- tached. More typically, persons who are not in the labor force do not currently want a job, of- ten because they are retired, at- tending to family responsibili- ties, going to school, or too ill or disabled to work.4 Because the marginally at- tached are sometimes considered to be at the edge of labor force participation, they are included, in part or in whole, in three of the 1 All of the data presented in this report are not seasonally adjusted. 2 The current recession began in December 2007 (as designated by the National Bureau of Economic Research). Because data on the mar- ginally attached are not available on a seasonally adjusted basis, this report uses over-the-year compari- sons. Quarterly averages rather than monthly estimates are used to im- prove the reliability of the estimates presented. 3 The five specific reasons for dis- couragement are 1) thinks no work available, 2) could not find work, 3) lacks schooling or training, 4) em- ployer thinks too young or old, and 5) other types of discrimination. 4 About 3.6 million persons want- ed a job in the first quarter of 2009 but did not meet the criteria to be margin- ally attached, primarily because they had not looked for work in the past 12 months. 5 See The Unemployment Rate and Beyond: Alternative Measures of Labor Underutilization, Summary 08-06, June 2008, available on the Internet at http://www.bls.gov/opub/ ils/pdf/opbils67.pdf.  Table 2. Distribution of persons in the labor force or marginally attached to the labor force by selected characteristics, first quarter 2009, not seasonally adjusted (Percent distribution) Marginally attached to the labor force2 Total Discouraged workers3 Other4 Total (in thousands) ......................................................................... 153,659 2,096 717 1,379 Percent ............................................................................................. 100.0 100.0 100.0 100.0 Men................................................................................................... 53.3 52.7 62.6 47.5 Women ............................................................................................ 46.7 47.3 37.4 52.5 White ............................................................................................... 81.6 69.2 66.9 70.4 Black or African American................................................................. 11.4 22.2 23.6 21.5 Asian................................................................................................. 4.6 4.4 4.7 4.2 Hispanic or Latino ethnicity............................................................... 14.3 16.8 17.7 16.3 16 to 24 years ................................................................................... 13.6 29.7 24.4 32.6 25 to 54 years ................................................................................... 67.7 51.4 54.8 49.7 55 years and older ........................................................................... 18.7 18.8 20.8 17.8 NOTE: Estimates for the above race groups (white, black or African American, and Asian) do not sum to totals because data are not presented for all races. Persons whose ethnicity is identified as Hispanic or Latino may be of any race. 1 The sum of the employed plus the unemployed. 2 Refers to persons who have searched for work during the prior 12 months (but not the prior 4 weeks) and were available to take a job during the reference week. Persons marginally attached to the labor force are a subset of not in the labor force. 3 Includes the following reasons for not actively looking for work in the prior 4 weeks: Thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination. 4 Includes those who did not actively look for work in the prior 4 weeks for such reasons as school or family responsibilities, ill health, and trans- portation problems, as well as those for which reason for nonparticipation was not determined. Table 1. Persons not in the labor force, selected quarters, not seasonally adjusted (Numbers in thousands) First quarter 2008 First quarter 2009 Total Percent Total Percent Total not in the labor force ............................................................... 79,985 100.0 81,253 100.0 Persons who currently want a job .................................................. 4,719 5.9 5,663 7.0 Marginally attached to the labor force, total1 ............................... 1,555 1.9 2,096 2.6 Reason not currently looking: Discouragement over job prospects2 ......................................... 421 .5 717 .9 Reasons other than discouragement3 ........................................ 1,134 1.4 1,379 1.7 1 Refers to persons who have searched for work during the prior 12 months (but not the prior 4 weeks) and were available to take a job during the reference week. Persons marginally attached to the labor force are a subset of not in the labor force. 2 Includes the following reasons for not actively looking for work in the prior 4 weeks: Thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination. 3 Includes those who did not actively look for work in the prior 4 weeks for such reasons as school or family responsibilities, ill health, and trans- portation problems, as well as those for whom reason for nonparticipation was not determined. Category Characteristic Labor force1