What Is the Civilian Labor Force?

The civilian labor force is a term used by the Bureau of Labor Statistics to refer to Americans whom it considers either employed or unemployed; military personnel, federal government employees, retirees, handicapped or discouraged workers, and agricultural workers are not part of the civilian labor force.

Key Takeaways

  • The civilian labor force term is used to refer to employed or unemployed individuals, who are not active-duty military personnel, institutionalized individuals, agricultural workers, and federal government employees.
  • The definition is considered misleading by some experts because it excludes discouraged and handicapped workers.

Understanding Civilian Labor Force

According to the Bureau of Labor Statistics (BLS), the civilian labor force is made up of two components. The first is civilian workers, a category that includes all private sector, state and local government workers.

Workers—or "employed persons," in the language of the Current Population Survey—are defined as people who are 16 years old or older and did at least one hour of paid work (or unpaid work in their own business) in the survey's reference week, or who did at least 15 hours of unpaid work in a family business. Active-duty military personnel, institutionalized individuals, agricultural workers, and federal government employees are excluded.

The second component of the labor force is unemployed people. This category does not simply include anyone who lacks a job: an unemployed person must have been available for work during the survey's reference week (discounting temporary illness) and made "specific efforts" to find a job during the previous four weeks. People who would like to work but have given up due to lack of opportunities, an injury or illness are considered to be outside the labor force.

Unemployment Rate and Participation Rate

This definition of the labor force is often at odds with colloquial usage, leading non-experts to feel misled when they realize that millions of discouraged and handicapped workers are excluded from the unemployment rate (defined as the unemployed population divided by the civilian labor force). The BLS offers other indicators of joblessness, the most comprehensive of which is U6: this includes people who are employed part-time but would prefer full-time work, as well as discouraged and other "marginally attached" workers who have looked for a job within the past 12 months, but not the past four weeks. Critics of the standard (U3) measure of unemployment call U6 the "real unemployment rate."

The BLS also calculates the civilian labor force as a share of the entire civilian population (everyone 16 or older who is not institutionalized or on active duty). This measure, called the civilian labor force participation rate, rose consistently from 58.6% at the beginning of 1965 to a peak of 67.3% in the beginning of 2000, but has fallen to 62.7% as of October 2017. Experts attribute the rise in labor force participation to the entry of women and the baby boomer generation entering the workforce. Retirements have a negative effect on labor force participation rates. In recent times, the baby boomer generation, which fueled America's productivity during much of the 1970s and 1980s, has begun retiring, causing a drop in the labor force participation rate. Automation of jobs and recessions also have a negative effect on labor force participation rate.