Understanding Unemployment

“Unemployed” probably doesn’t mean what you think it means…

Here is who is actually unemployed and how the workforce system can help.

Everything I am about to write is cited straight from the US Federal Bureau of Labor Market Statistics.

We see a lot about unemployment rates. Different states and different rates. But do you know what they’re actually measuring?

And why does it even matter?

Are we doing the best we can in Florida? Or just settling for “good enough” because we’re out front?

There are a lot of biases and opinions out there about those who are unemployed, why they are unemployed, and what we can do to help them join the workforce. 

Hopefully this article sheds some clarity on this issue and starts a conversation towards moving the needle in a positive direction.

To start, this conversation revolves around the civilian noninstitutional population age 16 and older. So not including active duty, people confined to prisons, jails, and other correctional and detention centers, and those in residential care facilities such as nursing homes.

 Of those people there are two options:

1. They are working (employed)

2. They are not working (unemployed)

These two categories make up what is called the Labor Force. (Employed + Unemployed = Labor Force)

Obviously if they are working, they are employed. So that takes care of that subset.

Things get interesting when you start looking at the “not working” population.

The “not working” population can fall into 1 of 3 categories:

1. Absent from job (vacation, sick, etc)

   1. These people are still considered “employed” because they are still working, just currently away from their job.

2. On layoff awaiting recall

   1. These people are considered “unemployed”. They have been temporarily laid off but will be rehired in the very near future. When they are rehired, they’ll be considered employed again.

3. Have made at least one specific, active effort to find a job within the last 4 weeks

   1. These people are considered “unemployed”.

If someone doesn’t fall into any of these categories, they’re considered “not in the labor force”.

Quick Recap:

Employed: Those currently working, including those currently sick or on vacation.

Unemployed: 

1. Those temporarily laid off with promise of rehire in near future. 

2. Those currently without a job but have looked for one within the last 4 weeks.

Groundwork set.

Now I want to focus on the “not in the labor force” population. 

Again, this is everyone who is not either employed or unemployed. 

So what are they?

People “not in the labor force” fall into 1 of 2 categories:

1. They do not want a job now

2. They do want a job now

People who do not want a job could be retired, family caretakers, homemakers, independently wealthy, personal decision, any number of reasons. The fact remains they do not want a job.

Consequently they are “not in the labor force”. Important to note, they are NOT considered unemployed persons.

People “not in the labor force” who do want a job either:

1. Have not searched for a job in the last 12 months, or

2. Are not available to take a job right now. Again, any number of reasons for this.

These two subsets of people are also considered “not in the labor force”, but they are NOT considered unemployed persons.

Let’s continue to dig.

Those people who DO want a job, and HAVE searched within the last 12 months (but not the last 4 weeks), and are AVAILABLE for work are considered “marginally attached to the labor force”.

Those marginally attached to the labor force can fall into 2 categories:

1. Discouraged workers: Their reasons vary, but often include a belief:

   1.  There are no jobs available, or none for which they would qualify.

   2. They have been unable to find work in the past.

   3. They lack the education, training, or experience needed for available jobs.

   4. Employers think that they are too young or too old, or they are subject to some other type of discrimination.

2. Other marginally attached: Their reasons vary but often include:

   1. family responsibilities

   2. in school or training

   3. ill health or disability

   4. childcare problems

“Marginally attached to the labor force” individuals are NOT considered unemployed persons.

So, to bring this home, by definition…

• If you don’t want a job, you are NOT UNEMPLOYED.

• If you want a job but haven’t actively looked for one in 4 weeks, you are NOT UNEMPLOYED.

• If you lack education, training, or experience for available jobs, you are NOT UNEMPLOYED.

You can draw your own conclusions about who you think is “unemployed” but the reality is most people’s idea of “unemployed” actually falls into the marginally attached category and as such shouldn’t count towards the unemployment rate.

So why does this matter?

Well, it gives us a lens as a workforce system to see through bias and identify:

• Exactly who is unemployed. 

• What that means. 

• Start thinking about how to reach them. 

• And how to get them the training, skills, and support they need to join the workforce.

For someone to be truly unemployed, they have to be actually looking for work and willing to take a job.

Now many of these people will have significant barriers to employment, but in this current economic environment where we have 1.2 jobs for every job-seeker, that is literally the workforce systems job to help these individuals overcome those barriers and rejoin the workforce.