94,044,000 Americans
Not in the Labor Force

Labor force non-participation jumped by more than 500,000 in one month

Job fair /
Job fair / AP
May 6, 2016

There were 94,044,000 Americans not participating in the labor force in April, an increase of 562,000 individuals from the previous month, according to data from the Bureau of Labor Statistics released Friday. Those not in the labor force represent individuals who do not have a job and did not actively seek one in the past four weeks.

Overall, the labor force participation rate, which is the percentage of the population who has a job or actively looked for one in the past month, declined from 63.0 percent in March to 62.8 percent in April.

Similarly for women 16 years and over, the number of those not active in the labor force increased. There were 56,472,000 women not in the labor force in April, an increase of 337,000 from the previous month. Their participation rate declined from 57.0 percent in March to 56.8 percent in April.

There were 5,962,000 Americans working part-time in April, but not by choice. According to the bureau, involuntary part-time workers are "persons who indicated that they would like to work full time but were working part time (1 to 34 hours) because of an economic reason, such as their hours were cut back or they were unable to find full-time jobs."

The unemployment rate for all Americans remained steady at 5.0 percent in April. This measure does not account for those individuals who have dropped out of the labor force. The unemployment rate simply measures the percent of those who did not have a job but actively sought one over the month.

The "real" unemployment rate, otherwise known as the U-6 measure, was 9.7 percent, which declined from 9.8 percent from the previous month. Some Democrats such as Sen. Bernie Sanders (I., Vt.) and Federal Reserve Chair Janet Yellen have said that this measure is more representative of the labor market because it accounts for discouraged workers and those working part time instead of full time for economic reasons.

The Job Creators Network, a nonpartisan organization, uses the bureau’s data to calculate a measure that would take into account those who have dropped out of the labor force altogether since the Great Recession. They say the real unemployment rate is 9.6 percent, which controls for the historic post-recession drop in the labor force participation rate. Before the recession began, in December of 2007, the labor force participation rate was 66 percent, and today it has dropped to 62.8 percent.

"Today’s unemployment rate of 5.0 percent overlooks the millions of Americans who have dropped out of the labor force altogether during the so-called economic recovery," said Alfredo Ortiz, president and CEO of the Job Creators Network. "To truly get the labor market going again, we must bring small businesses back by reducing the taxation, regulation, and barriers to credit that reduce their ability to expand and hire."

Published under: Economy , Unemployment