Labor Market

Go to the grocery market and you can buy groceries. The meats and produce and loaves of bread are out, ready for you to buy them.

The labor market works the same way, only with people’s skills and time. Hire someone to clean your chimney? You’re dipping into the labor market. Need 1,000 workers for your hemp-based shoe factory? Head to the labor market.

Generally speaking, the labor market isn’t a physical place, at least not in the same way as a grocery store. However, there can be some physical (or at least digital) manifestations: workers lined up in front of Home Depot waiting for construction work; online gig sites, like Upwork; even job search sites like Indeed or Monster.

For the most part, though, when people refer to the “labor market,” they generally talking about a more abstract concept. Think of all the people in the U.S. who are looking for work or are currently employed. That’s the labor market.

Economists use a few stats to measure the strength of the labor market. The most famous figure is the unemployment rate. This stat shows the percentage of the population that would like a job, but does not currently have one. The smaller the unemployment rate, the stronger the labor market.