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Comment by cbhl | Hacker News Reader

If you do not have a job and are not actively looking for work, you are not part of the "labor force". The "labor force" is defined as (working + actively looking). Also, the denominator of the unemployment rate is the size of the labor force, not the size of the working-age population.

In particular if someone gives up on looking for a job because they're too discouraged, or if someone decides to become a stay-at-home parent, this causes the size of the labor force to go down by one person.

Search for: "labor force participation rate".

Also some definitions here (US-specific): https://www.bls.gov/cps/definitions.htm

Here's also the transcript of the Planet Money podcast from March 2023 which talks about reasons folks left the workforce at that time: https://www.npr.org/transcripts/1162753771

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> In particular if someone gives up on looking for a job because they're too discouraged,

I've never understood that either; do other people just not have to pay rent or buy groceries? How do you "give up looking for a job"? I understand becoming a stay at home parent, but what else would make it so you "give up" looking for paid work?

This isn't a rhetorical question, I am actually asking because I feel like I'm missing something.

They rely on the incomes of family members, savings, or governmental transfer payments (social security, welfare, disability, etc).

Not sure the percentages of each, but those categories probably about cover it.

That's fair, I guess if you're already around retirement age, being unable to find a job might be an impetus to quit looking.

I think there's also nuance in what "actively looking" means. Someone might decide to stop actively looking but not permanently retire and instead wait until conditions are different; maybe someone in their 20s or 30s might move back in with their parents for a bit, or maybe someone just decides that living more modestly for a year and then trying again either when more jobs are available or when they're less burnt out. Even less common things, like having to go on disability to to an injury or illness might add up to a decent number when aggregating across an entire country. I think the main point is that the single statistic alone doesn't describe "why" or "for how long", only "how many"; there's (almost literally) a world of potential reasons that aren't necessarily going to be related to any others.

To put a positive spin on it, within a certain age and savings range, someone might choose not to be underemployed or just say screw it if they weren't finding anything they were looking for. Admittedly that's basically a fairly high earner story so a fairly small part of the mix. But I can absolutely see someone checking out a few years before they might have chosen to if they're not finding what they're looking for and don't want or need to be a Starbucks barista.

The devs that I've known who've dropped out of the market have lived on their savings and investments.

I've see this happen to a number of friends. Most of them have enough saving that they can 'retire', but none of them wanted to retire yet. It often means moving away from friends to implement a lower cost-of-living. Once you are >40, it can be hard to find a job. You are too experienced for mid-level roles, but your core skillset may no longer be relevant. e.g. There are far fewer Win32 developers than 10 years ago, but retraining to be a web developer can be a big challenge. I've also seen people get promoted to a managment level, based on a targetted skillset, where it can be hard to find find a new role.

Its worth noting that the “working age population” has a starting age but no ending age; once you cross 16, you are in the denominator for the labor force participation rate until you die. 106? Still in the “working age population”.

There's also a “prime age labor force participation rate” which has both a start (25) and end (54) age for the denominator population, and the prime age LFPR has been strong [0] as the full LFPR has dropped [1] because of the Boomer demographic bulge making age-related exits from the labor force.

People who like to sell unemployment as underrated by the official statistic in recent years like to point at the drop in the full LFPR and insinuate its because of prime-age population being pushed out of the labor force, when looking at the prime age LFPR reveals that that is not at all true.

[0] https://fred.stlouisfed.org/series/LNS11300060

[1] https://fred.stlouisfed.org/series/CIVPART

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