For workforce practitioners and decisionmakers interested in exploring more in-depth questions regarding Kentucky’s labor force participation, it may be pertinent to consider the experiences of individuals at the margins of the labor force and the factors preventing them from participating and/or maximizing the labor they're performing. For example, how many individuals don't participate in the labor force because they're somehow discouraged? How many workers in the labor force are prevented from working full-time by broader economic conditions? These questions, among others, can be answered with a set of data products that the U.S. Bureau of Labor Statistics (BLS) derives from the U.S. Census Bureau’s Current Population Survey (CPS) called “alternative measures of labor underutilization.”

What is underutilized labor and how much of it exists in Kentucky?

Alternative measures of labor underutilization provide different views of the extent to which the economy is not fully utilizing its labor resources, beyond what is captured by official state unemployment estimates. Average volumes of different groups of underutilized labor are estimated using responses to the CPS². Groups of underutilized labor include:

• Persons unemployed for 15 weeks or longer. Note that these individuals still belong to the civilian labor force.
• Job losers. This category includes people who completed temporary work, people whose employment otherwise ended involuntarily, and people on temporary layoff (who have been given a date to return to work or who expect to return to work within six months). Note that these individuals still belong to the civilian labor force.
• Discouraged workers. This category, a subset of marginally attached, includes people who are not in the labor force, and who indicate that they have not sought employment in the prior four weeks due to discouragement of some sort. Reasons for discouragement vary, but the BLS indicates that the following responses are common:
• There are no jobs available, or none for which they would qualify.
• They have been unable to find work in the past.
• They lack the education, training, or experience needed for available jobs.
• Employers think that they are too young or too old, or they are subject to some other type of discrimination.
• Marginally attached to the labor force. This category includes discouraged workers, as well as people who say they want a job, but have recently stopped looking for work for reasons other than discouragement. The BLS indicates that the following are commonly cited reasons:
• Family responsibilities.
• In school or training.
• Ill health or disability.
• Childcare problems.
• Involuntary part-time workers. This category includes people who worked 34 hours or less during the survey period, who indicated that they wanted and were available for full time work. Additionally, these people cited an economic reason- such as slack work, unfavorable business conditions, inability to find full-time work, or seasonal declines in demand- when asked why they were not at work full-time.

Kentucky's Volume of Underutilized Labor by Group, 2003 - 2022

Source: U.S. Bureau of Labor Statistics, State Alternative Measures of Labor Underutilization, 4-Quarter Moving Average Series. Data accessed 7/13/2023.

By raw volume, all of these groups of underutilized labor were at historical annual lows as of 2022. The height of the COVID pandemic (2020) saw a substantial increase in the number of job losers (+56,000 individuals from 2019), as well as smaller increases in the number of workers unemployed 15 weeks or longer (+15,600) and involuntary part-time workers (+7,400). Meanwhile, marginally attached workers and the subset of those who were discouraged workers both decreased in 2020 (-6,000 and -900, respectively). As of 2022, these groups of underutilized labor each amounted to fewer than 40,000 individuals for the first time in the history of these statistics’ publication.

1Unemployed persons are also generally included as a type of underutilized labor in the context of the statistics discussed here, but estimates of unemployed persons (specifically when 
published by the BLS in the context of labor underutilization measures) are solely derived from CPS responses. In contrast, the more reliable estimates of state unemployment published by 
the BLS’ Local Area Unemployment Statistics (LAUS) program are modeled using inputs from a variety of data sources in addition to CPS responses, and are recognized as the official state unemployment estimates. Due to the perceived discontinuity between these two statistical products, unemployed persons are not discussed as an underutilized labor group in this article.

2In addition to the volume of underutilized labor, BLS also publishes six rates of underutilized labor, designated U-1 through U-6. More information about (and links to download) these 
measures can be found at https://www.bls.gov/lau/stalt.htm.