Labor - Statistics & Facts

Labor - Statistics & Facts

Statistics and facts on Labor

775 Labor (or labour) is a term that describes the human effort (intellectual or physical) that is put into the creation of goods and services. Labor is commonly used in terms of wage labor, which describes the arrangement under which an individual offers his or her labor to an employer in exchange for a certain wage. In economics, labor is one of the three primary production factors next to capital and land.

The size of a country’s labor force is determined by the size of its working-age population and the so-called labor force participation rate. By definition of the U.S. Bureau of Labor Statistics, the labor force comprises of those eligible to work that are either currently employed or actively looking for a job.

In 2013, the U.S. labor force was 155 million people strong. The labor force participation rate in the United States was 62.8 percent in August 2014, which represents the lowest value since the early 1980s when the labor force participation of women was significantly lower than today. In 2013, the labor force participation rate among females in the U.S. was 57.2 percent compared to 69.7 percent among U.S. males.

By definition, the labor force participation rate is only suited to describing the supply of labor to an economy, which is why the employment to population ratio is often used as a secondary indicator to describe the labor market. It describes the share of the working-age population that is actually employed.

In 2013, the employment rate in the United States was 58.6 percent. The labor force participation rate, however, was 63.2 percent. Therefore, some of those 63.2 percent who were willing to work could not find a job. When supply exceeds demand on the labor market the result is unemployment.

The demand for labor is closely tied to the business cycle. When economies are booming, production is high and labor is in demand, resulting in low unemployment rates. When growth stagnates however, companies start cutting costs and job opportunities become scarce. The American job market is currently still suffering from the consequences of the financial crisis. The unemployment rate in the United States is currently at 7.4 percent, up from a pre-recession level of 4.6 percent in 2007.

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