Labor Market Overview

Some Definitions

• Market is an institution where buyers and sellers interact to determine the price and quantity transacted.

• The labor market summarizes the interaction of over 140 million workers and over 7 million employers. The are various ways to categorize labor markets– National market – overall employment/unemployment– Local market – Seattle vs. Ellensburg– Occupational market – medical doctors vs. metal workers– Industry market – automobile vs. railroad (SIC codes)– Internal labor market – rules constraining the employment

relationship within a firm.

www.bls.gov

Employment Statistics

• The Bureau of Labor and Statistics is the federal governmental unit in charge of collecting and reporting employment data. The BLS website is: http://www.bls.gov .

• The Economic Report of the President is also a good source of data on the US economy http://www.gpoaccess.gov/eop/download.html

• Employment data are collected in the Current Population Survey (CPS) is a monthly survey of 60,000 households across the U.S. conducted by the Bureau of Census for the Bureau of Labor Statistics. It provides a comprehensive body of data on the labor force, employment, unemployment, and persons not in the labor force.

www.bls.gov

Who is counted as employed?

• Employed persons consist of:

– All persons who did any work for pay or profit during the survey reference week.

– All persons who did at least 15 hours of unpaid work in a family-operated enterprise.

– All persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons.

www.bls.gov

Who is counted as unemployed?

• Unemployed persons are:– All persons who were not classified as

employed during the survey reference week, made specific active efforts to find a job during the prior 4 weeks, and were available for work.

– All persons who were not working and were waiting to be called back to a job from which they had been temporarily laid off.

Figure 2.1 Labor Force Status of the U.S. Adult Civilian

Population, June 2000

www.bls.gov

Not seasonally adjusted Seasonally adjusted

Mar. Feb. Mar. Mar. Feb. Mar.

Employment status, sex, and age 2003 2004 2004 2003 2004 2004

TOTAL

Civilian noninstitutional population.............. 220,317 222,357 222,550 220,317 222,357 222,550Civilian labor force............................ 145,801 146,154 146,525 145,818 146,471 146,650Participation rate........................ 66.2 65.7 65.8 66.2 65.9 65.9Employed...................................... 136,783 137,384 137,691 137,300 138,301 138,298Employment-population ratio............... 62.1 61.8 61.9 62.3 62.2 62.1Unemployed.................................... 9,018 8,770 8,834 8,519 8,170 8,352Unemployment rate......................... 6.2 6.0 6.0 5.8 5.6 5.7Not in labor force.............................. 74,516 76,203 76,025 74,499 75,886 75,900Persons who currently want a job.............. 4,763 4,622 4,667 4,974 4,746 4,843

Flows in Labor Data

• Employed to Unemployed: Quits (voluntary) or layoffs (involuntary)

• Unemployment to Employed: Newly hired or Recalled

• Labor force to Not in the Labor Force: Retiring or Dropping Out

• Not in Labor Force to Labor Force: Newly Entering or Rentering

Figure 3 Labor Force Participation Rates for Men and Women Since 1950

Copyright©2003 Southwestern/Thomson Learning

100

80

60

40

20

01950 1955 1960 1965 1970 1975 1980 1985 1990 2000

Labor-ForceParticipation

Rate (in percent)

Women

Men

1995

Figure 2.2 Unemployment Rates for the Civilian Labor Force, 1900–2000

Figure 2.3 Employment Distribution by Major Industrial Sector, 1900–2000

Real Earning in Non-ag 1959-2003

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p

Earnings

Yea

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Figure 2.4 Relationship between Wages,

Earnings, Compensation, and Income

Total Compensation, Wages and Salaries and Benefits 1982-2003

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Wages and Salaries

Benefits

Figure 2.5 The Markets in Which Firms

Must Operate