Labour Force, Labor Force

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The labor force of a country includes all the people who are capable of working or being employed. They may be actively employed or looking for work. This group generally comprises of people who are above the age of 16 and below the age of retirement. The labour force excludes those who are serving in the military forces. The worldwide labor force in 2008 was estimated at over 3 billion. According to the statistics recorded by the CIA (Central Intelligence Agency), the country having the largest labor force is China – more than 800 million.

Labor force: Importance

The labor force of a country, by manufacturing products or providing services, adds to its GDP. Knowledge of the labor market helps to develop, manage and evaluate policies on the labour market.

Measuring the Labor Force

Labour force is calculated by using the simple formula given below:

LF = E + U, where

LF is Labor Force,

E is number of employed people and

U is number of unemployed people (who are capable of working).

The labor force participation rate can be calculated by dividing the labor force by the total population.

Labor Force: Changing Trends

The US Bureau of Labor Statistics predicted several variations pertaining to the labour force for the decade 2006-2016. These are:

  • Overall estimate: There will be an overall increase of 8.5% in the size of labor force over this period.

  • Age: The number of workers aged 55 plus will increase 5.5 times more than the overall rate. A minor decline is expected among workers who belong to the age group of 16 to 24. The prime-age workers (25-54 years) will increase by 2.4 percent and constitute 64.6% of the total labor pool.

  • Ethnic groups: While Asians will continue to be the fastest growing race, the whites will still be the largest race comprising 79.6 percent of the labor force by 2016.

Also, there has been a tremendous increase in the participation of women in the labor force, from 40% in the 1960s to 66% in 2005. Factors such as rise in enrollments for higher education, late marriages, lower birth rates and increase in the wages set for them have led to this change.

 

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