This article breaks down the statistics in the change in the labor force participation rate (who's actually working or seeking work). Short summary: the most significant parts of the change are an aging population and young folk spending more time in school before going onto (or back into) the job market. The latter, at least, doesn't seem necessarily like a bad thing.
The economy isn't doing great, but there have been some systemic changes since before the Great Recession, and if the mantra that we simply need to "cut taxes so that job creators can create jobs" and trickle-down economics weren't convincing then, they're even less so now.
If nearly 40% of Americans aren’t working, what are they doing?
Going, going, gone.
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Although in reality I'm part of the unemployed – looking for work and not finding it – I think I might be tracked in this scenario as out of the workforce, because I've been unemployed and looking for so long that I'm not being tracked by the unemployment agency anymore.
Yes, if you are no longer collecting unemployment, you are no longer counted as part of the unemployment number.
Thank you St. Ronnie of the Raygun.
+Doyce Testerman , actually, no, you're still considered unemployed by the BLS. From their website:
"Some people think that to get these figures on unemployment, the government uses the number of people collecting unemployment insurance (UI) benefits under state or federal government programs. But some people are still jobless when their benefits run out, and many more are not eligible at all or delay or never apply for benefits. So, quite clearly, UI information cannot be used as a source for complete information on the number of unemployed.
Other people think that the government counts every unemployed person each month. To do this, every home in the country would have to be contacted—just as in the population census every 10 years. This procedure would cost way too much and take far too long to produce the data. In addition, people would soon grow tired of having a census taker contact them every month, year after year, to ask about job-related activities.
Because unemployment insurance records relate only to people who have applied for such benefits, and since it is impractical to count every unemployed person each month, the government conducts a monthly survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration program. In 1942, the U.S. Census Bureau took over responsibility for the CPS…"
(http://www.bls.gov/cps/cps_htgm.htm)
Thanks, Bruce!