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And finance Allah Shmoop what is outside the labor force

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Well how do you know if you're in the labor

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force That might feel like you're working hard But well

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that's not the real test Working hard at homework for

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school doesn't get you paid At least not right now

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Taking care of your kids Well it doesn't get you

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paid Actually Probably cost you money taking care of your

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own lawn We'll know that doesn't get you paid either

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So what's the standard Well first let's define the term

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What is the labor force Oh uh different type of

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labor force The economic labor force is made up of

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all the people in the economy who are looking to

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sell their labour in the open market Seems straightforward enough

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right There are people who are employed like people working

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in factories or in offices or all sorts of other

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places All right well then there are people who aren't

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employed like these people This guy you know them well

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then there's the gray area This guy not so sure

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He's got a definite task He's working for an organization

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He's gotta trudge through the snow all day but well

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he's not collecting wages As far as we know If

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you get up every morning and do something that gets

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you paid then you're counted as being employed in the

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labor force The key part is that you're getting paid

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your trading your labor on the open market for cash

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Ola if you spend all day sitting in the basement

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drinking Mountain Dew and watching reruns of Law and Order

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s V U You know collecting unemployment checks and you

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are officially unemployed Yeah Shocking So all of this is

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true but it's a bit more complicated in real life

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There are actually three categories of people when it comes

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to the labor market the employed the unemployed and those

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outside of the labor force Yeah right Wait What does

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that look like Pronounced poodle If this is the big

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term that confuses million's or at least one hundred thirty

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four people who report economic data and follow it and

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actually know what they're reading right Well this group represents

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the invisible part of the labor market The lives people

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don't talk about them all that much almost like they

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don't want to admit that they exist a lot like

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you know these guys you don't want to run into

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them in a dark alley But the outside the labor

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force people actually represent now a sizable portion of the

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US population and it's an important concept Keep in mind

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if you're really gonna understand Ky e con stats especially

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the unemployment rate and what it actually means that any

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you know depth because the data's pants are on fire

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so often well the unemployment rate is royalty In the

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world of economic statistics you could say it's the king

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of stats With GDP being the queen all other staffs

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bow before it Politicians love to quote the unemployment rate

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Ah high rate means the economy stinks and everyone in

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Washington should be fired and get replaced A low rate

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means everything is going great and the bureaucrats and politicians

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get keep living off our tax dollars But there's a

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missing piece The outside the labor force peace It has

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to do with how the word unemployed is defined to

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be officially unemployed that is included in the unemployment rate

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number You need to be looking for a job actively

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So if this guy's happy living off his parents playing

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a fortnight all day not bothering to look for a

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job Well he wouldn't qualify He wouldn't count in the

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numbers He'd be ignored The unemployment rate isn't calculated by

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dividing the number of people without jobs by the total

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number of people in the country that be the denominator

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there Instead the number gets divided by the number of

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people who want a job Not all the people just

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the people who want a job But there are plenty

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of people who are perfectly content with not having a

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job at all And and not just this guy There

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are children and college students There are housewives and house

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husbands too You don't forget them Well there are retirees

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There are lottery winners There are jet setting Harris is

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There are grifters There are beach bums drug dealers and

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busking street mimes and someone so back to our three

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groups Well first we've got people who have jobs and

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people without jobs who want to get a job These

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folks are actively looking for work but haven't found anything

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yet And yes our new favorite people people outside the

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labor force loves the government defines this third group as

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persons who are neither employed nor unemployed like not a

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and not be Sounds like the answer to a Zen

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riddle right Or maybe an ancient prophecy about the type

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of hero who will eventually ride a mystical dragon But

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luckily the Labor Department also includes with slightly more concrete

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definition They say that this group includes people who are

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neither working nor seeking work Yes a final recap employed 00:04:34.539 --> [endTime] unemployed but life Yeah winter is definitely coming

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