Glossary of Human Resources Management and Employee Benefit Terms
The labor force, or workforce, is the total number of people who are currently employed plus the number of people who are unemployed and seeking employment. This number does not include people who are unemployed and not seeking employment, such as students and retirees. People who would like a job but are not currently looking for one are also not considered part of the labor force. In short, the workforce includes those who either have a job or are actively seeking one.
The labor force shrinks during times of economic downturn because people tend to have a more negative outlook on their chances of getting a job during these periods. Layoffs and downsizing can discourage candidates from applying at all, so even though they may be willing to work, some stop looking for a job and effectively remove themselves from the labor force. Specifically in the U.S., the labor force is projected to grow over the next several years, though slowly. With an aging population, lower labor-force participation rates, and decreased population growth rates, the labor force will grow more slowly than it has in past decades.
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