I understand the need to exclude the young, old, disabled, and homemakers but why do unemployment statistics not include those who are simply living off of welfare and not intending to work (or on the opposite end of the spectrum, those living off of a trust fund)? Is this subset of the population just not big enough to be worth including in the statistics?
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Because those people are, in terms of employment, irrelevant. Someone who is not employed and doesn’t want to be employed has no role to play in the employment “market” or statistics.
The point of the unemployment statistic is to get a sense of how “tight” the labor market is. The higher the unemployment, the more that employers can pick and choose among the many, many applicants for candidates; the market is in the employers’ favor. The lower the unemployment, the more that employers might struggle to fill positions because there might be very few or even zero qualified applicants for those openings; the market is in the employees’ favor.
People who aren’t actively looking for jobs don’t factor into unemployment because they will never affect that balance. If they decide to start looking, they will then be counted, but if they aren’t and don’t intend to look for work, then they might as well not exist, in the eyes of employees and employers.
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