The labor force participation rate is calculated by dividing the labor force by the population of workers over the age of 16 in a given area. Someone is considered “in the labor force” if they are either employed or looking for a job.
In Arkansas, while the unemployment rate is at historic lows, the labor force participation rate is also going down. This means that the unemployment rate is not necessarily going down because people are finding jobs, but instead are not looking for jobs and leaving the labor force altogether.
From September 2017 to September 2018 over 12,000 fewer Arkansans were in the labor force. For September 2018, Arkansas’s labor force participation rate was just 57.4%, down 1 percent a year ago and down 6 percent from a decade ago. This makes Arkansas’s labor force participation rate 4th lowest in the country.
Dr. Michael Pakko, an Arkansas economist, joined Paul Harrell on Conduit News Radio this week to discuss the Arkansas economy and the differences in the unemployment rate and the labor force participation rate. You can watch that interview below.