DEMERIT GOOD: A good that society, usually government, deems is overvalued by consumers in normal market exchanges. As such, governments typically restrict the consumption of demerit goods through policies such as taxes or direct government control. Demerit goods are often have characteristics of quasi-public goods or externality by-products. Examples include tobacco and narcotic drugs. The counter type of good is a merit good.
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CIVILIAN LABOR FORCE:
Everyone in the economy, 16 years of age or older, who is neither institutionalized nor in the military, and is either employed or unemployed but actively seeking employment. The civilian labor force is the "official" specification for the national economy's labor supply. It is used for such calculations as the unemployment rate and the labor force participation rate. In particular, the unemployment rate is technically specified as the "percent of the civilian labor force that is unemployed." The size of the civilian labor force (along with the wildly popular unemployment rate) is estimated monthly by the Bureau of Labor Statistics (BLS) from data generated by the Current Population Survey (CPS).
The civilian labor force is currently in the range of 140-150 million people, roughly half of the total population of the nation. As the accompanying chart illustrates, changes in the civilian labor force keep pace with changes in the overall population. If the population increases by 1 percent, the civilian labor force is also likely to increase by about 1 percent. The most notable exception to this is during major wars when a large segment of the population leaves civilian life for the military.
|Civilian Labor Force
Who is IN The Civilian Labor ForceThe civilian labor force includes two broad categories: (1) employed persons and (2) unemployed persons who are actively seeking employment.
Who is NOT IN The Civilian Labor ForceWith only about half of the nation's overall population included in the civilian labor force, identifying who is NOT included in the civilian labor force is perhaps more informative that who is in. The "out" half is excluded for a variety of reasons:
- Employed: In principle, an employed person is one who is actively engaged in production. In practice, a person can show up in the employed category in several different ways.
- One is by working as a paid employee for someone else, which is what captures most people.
- Two is by working without explicit pay as the owner of a business (that is, a proprietorship or a partnership).
- Three is by working at least 15 hours as an unpaid worker in a family operated business.
- Four is by being temporarily absent from a job due to illness, vacation, labor dispute, etc., with or without pay.
- Unemployed: In principle, an unemployed person is one who is willing to work but is not actively engaged in production. In practice, a person can show up in the unemployed category in several different ways. too.
- One is by being a "job loser" who is permanently and involuntarily fired or terminated from a job and who has begun searching for other employment.
- Two is by being a "job loser" who is temporarily laid off from a job, but expects to return within six months and has not searched for other employment.
- Three is by being a "job leaver" who has voluntarily left a job and has begun searching for other employment.
- Four is by being a "re-entrant" who is seeking employment, but who has not been employed nor looked for work for an extended time period.
- Five is by being a "new entrant" who is seeking employment for the first time and has never before been employed.
- Young: The civilian labor force excludes anyone under 16 years of age. The general reasoning is that these young folks do not work, so why bother. More specifically, child labor laws legally restrict the employment of anyone under 16 years old from working, except in special cases (child actors and farm labor are two). In addition, laws also require anyone under 16 years old to attend school, so these youngsters are not generally available for work. There are also social customs that frown on the employment of anyone under 16 years of age. The segment of the population under 16 years of age is just not a critical component of the economy's productive activity.
- Military: As the term "civilian" implies, the civilian labor force excludes military personnel. This segment of the population is excluded because military personnel cannot be considered as resources available for productive activity. Moreover, the military operates under its own set of "employment" rules, apart from resource and labor markets that exist in the rest of the economy. The logic for excluding this segment is perhaps most obvious during periods of rising and declining military activity (that is, during and immediately after wars). If military personnel are included in the labor force, then a major movement of civilians into the military has no apparent affect on the labor resources available for productive activity, when in fact, the quantity of labor that can be used for domestic production is declining.
- Institutionalized: The civilian labor force excludes institutionalized members of the population, including people in correctional facilities (prisons and jails), mental or psychiatric hospitals, and nursing homes. This segment of society, much like those under 16 years of age, is excluded because these folks are generally unavailable for productive activity. Once again, they basically do not work, so why bother. There is, however, an interesting issue surrounding prison inmates. While prisoners "generally" do not work and are "officially" excluded from the civilian labor force, some do undertake productive activities that compete directly with goods produced by private firms that employ workers from the civilian labor force.
- Unwilling: The civilian labor force excludes members of the population who are ABLE to work, but choose not to. A major contingent of this segment is homemakers, housewives, househusbands, and others who attend to family or household responsibilities. Another major contingent is students 16 years of age or older who pursue education full-time (both high school and college). A third contingent is retirees who attend to recreational activities in their golden years.
- Discouraged Workers: The civilian labor force excludes members of society who are willing and able to work, but are unemployed, and due to their lack of success, have decided to stop seeking employment. This segment of society is officially termed discouraged workers. These folks believe that there are no jobs available, and even if jobs were available, they would not be hired because they lack the needed training or education, are too young or too old, or might be discriminated against. Many discouraged workers would be classified as structurally unemployed if they were actively seeking employment.
A Few ExamplesTaking a stroll through the streets of Shady Valley, U.S.A., provides a few examples to illustrate who is in and out of the civilian labor force.
- The first example is provided by 13 year old Penelope Pumpernickel, who is busily engaged in her early morning task of delivering the Shady Valley Gazette-Tribune-Journal newspaper to information-hungry residents. Penelope would seem to be an ideal candidate for inclusion in the civilian labor force. She is paid to engage in a productive activity delivering newspapers. This would not only seem to place her in the civilian labor force, but also the employed category. Unfortunately, Penelope is in neither. Being under 16 years of age, Penelope is excluded from the official civilian labor force and the employed categories tabulated by the BLS.
- After completing her "unofficial" newspaper delivery job, Penelope is greeted by her mother Pollyanna Pumpernickel, who is on the way to her "job" as an air traffic controller. Pollyanna would seem to be another candidate for the civilian labor force. But she too is excluded. The reason is that Pollyanna is "employed" as an air traffic controller at the Major General Air Force Base, holding the rank of sergeant. Even though Pollyanna is performing productive work, comparable to that found in the private sector, as military personnel, Pollyanna is excluded from the civilian labor force.
- Ironically, Pollyanna was motivated to join the Air Force after her husband, Paul Pumpernickel, embezzled $236,689.23 from his employer, OmniBank Financial Corp., and fled to Taiti with a younger women. However, justice caught up with Paul Pumpernickel, who is serving a 15-year prison sentence in the Shady Valley Correctional Facility. While Paul spends 8-hours a day learning a useful trade by making cork bulletin boards that are sold throughout the world, he is not officially in the civilian labor force. The reason, of course, is that he is an institutionalized prisoner.
- Fortunately Paul's twin brother, Preston Pumpernickel, has managed to keep his life on the straight and narrow. Preston is gainfully employed as a computer programmer at the Quadra DG Computer Works. Preston is over 16 years old (he is actually 37) and is paid for productive work by a private business. He is neither institutionalized, nor in the military. This makes Preston officially employed and in the civilian labor force.
- Too bad, the same cannot be said for Preston's former technical assistant, Phoebe Pankovic. Phoebe was also employed at the Quadra DG Computer Works, but she was not a very good worker. Preston was forced to fire Phoebe. She has been actively pursuing other employment opportunities for several weeks, but without success. Phoebe is also over 16 years old (she is 23), is neither institutionalized, nor in the military. This makes her officially unemployed and also a part of the civilian labor force.
- Phoebe's newfound status in the ranks of the unemployed is not only bad for her, it is also bad for her older brother Peter Pankovic. Peter has not been employed since the HyFy Electronics Company (a leading record-player manufacturer) went bankrupt. During his first six months of unemployment, Peter actively searched for other jobs. But none were found. So he simply gave up. Over the past year, Peter has resigned himself to sleeping on his sister's sofa and eating left over pizza crust. He would like to work. And someday he will once again seek employment. But for now, he does nothing. This places Peter in the category of discouraged worker, which excludes him from the civilian labor force.
CIVILIAN LABOR FORCE, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: February 27, 2024].
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