Question

Who is considered part of the labor force in the USA? How are the groups that make up the labor defined for statistical purposes?

Answer 1

Labor force of any country is meant to imply all those persons in the working age group who are willing to work. In other words, labor force does not include the people who are unwilling to work by their own choice. Labor force is the sum of employed persons plus unemployed persons in an economy who are involuntarily left out, that is they want to work at the prevailing wage rate but are unable to find work.

Thus, Labor force includes all those in the working population who are willing to work.

For statistical purposes, labor force is considered as being the target of all policy making. This attaches value to involuntary unemployment rather than voluntary unemployment since a person who is not willing to work by his own choice is not a matter of concern for the government and hence policy making. What is important is the density of involuntary unemployment.