Labor supply can be defined as the number of persons who would potentially apply for work if a job becomes available. Potential workers can be categorized into two groups, those with jobs and those without jobs.

The labor supply of workers with jobs is often determined by the willingness of these workers to change jobs. Most of the time the decision to change jobs is related to wages, fringe benefits, hours and working conditions. Generally, workers are more inclined to change jobs when the wages and benefits for a new job are better and/or when they are optimistic about the economy. Sometimes, workers in this group are called underemployed if they meet specific criteria.

The supply of people without jobs is influenced by the unemployment rate, labor force participation and migration. To be classified as unemployed, residents must have been actively looking for work in the last four weeks, unless they belong in one of the following two categories: expecting recall from layoff, or waiting to start a job within 30 days. The unemployed excludes job seekers that are under 16 years of age and nonresidents.

Some people without jobs are classified as not in the labor force. These individuals are not participating in the labor force, as employed workers or job seekers, for a variety of reasons. Perhaps they cannot work because of school or family responsibilities or because they are sick. Retired persons and homemakers are also classified as not in the labor force. Despite the fact the not-in-the-labor-force group includes people who cannot work or choose not to work, there are many people in this category who would take a job if one becomes available.

Migration is a third factor affecting the labor supply of potential workers who are not jobholders. Persons without jobs are the most likely to migrate from or to a different area or state.

Another method of determining labor supply is to use an economic model based on historical hiring trends. The Labor Market Information Center uses this approach because it provides basic information in a cost-effective manner.
 

For many employers, labor supply is the bottom line issue in determining which area they will expand or locate in. There are several different ways to determine the potential labor supply in an area. Conducting a labor survey is one method that is commonly used. Some labor surveys are statistically sound and effectively implemented. Other surveys are of the straw poll variety. Labor surveys are most useful if they determine potential labor supply for a specific type of employer or industry. Many labor surveys use a "labor shed" approach that includes workers within commuting distance. These labor surveys attempt to determine the level of willingness to take a new job. The downside to surveys is that they can be expensive and time consuming and yield only point-in-time results.

Past hiring trends provide a good measure of future available workers, unless significant economic changes have recently taken place. Counts of new hires would include people who had been working for someone else, been out of the labor force and previously been unemployed. New hires would include residents of other states who are commuting to work in another county area. In addition, the economic model has to include the unemployed (who did not find jobs) and those who are not actively seeking work because they believe that jobs are not available. Combining the number of workers who will change employers to take new jobs, the number of people previously not in the labor force who will take new jobs, and the unemployed provides an estimate of the total labor supply. Since an economic model uses the same methodology for all areas in the state, it provides a consistent, comparable labor supply estimate.

The table below summarizes the labor supply for the selected labor area.

Table 1