Solving the Mystery of the Disappearing Workers

We might be able to solve a mystery today.

During January, we said that millions of workers were “missing” from the labor force.

Limited to people who are 16 or older and have a job or are looking for one, the labor force numbers approximately 156 million. But the civilian population includes another 94 million individuals who are also older than 16 who could be in the labor force but are not.

So where are they?

Finding the Missing Workers

Let’s start with a chart of the working status of the civilian population that is 16 or older. If we combined the five green rectangles under “Don’t Want a Job” and the single red box labeled “Not in labor force but wants a job,” we would get a total of 94 million workers.

From: The Atlanta Fed

Next, looking at the (above) rectangles as a (below) graph, we can picture some of the numbers. The retired group is a whopping 41 million people. Add to that 15 million individuals who are in school, 20 million who care for the aged and children and then those who are disabled and you get a total of 76 million. I suspect that with “other” and “want a job but not in the labor force,” we have found many of our missing workers.

Our Bottom Line: the Participation Rate

In our January post, we said we had a mystery. If we divide the size of the labor force by the potential labor force (which includes everyone who could be and is in the labor force) and then multiply by 100, we get a September 2015 labor force participation rate of 62.4 percent. That 38.6 percent–the “non-participation” rate- is the 94 million people we thought were missing.

And yes, that is a lot of people for the employed population to support. But we can save that for another day.