Men are abandoning the rat race, & changing American society

Summary:  America is changing in ways not easy to see. One is the exodus of men from the labor force, changing both our economy and society. Today’s post looks at the facts. Tomorrow’s gives a shocking explanation, different than the ideologically pleasing stories given by Left and Right.

“Work is the grand cure of all the maladies and miseries that ever beset mankind — honest work, which you intend getting done.”
— The Inaugural Address of Thomas Carlyle as Lord Rector of the University of Edinburgh (1866). This belief changed the West. It will change again when no longer believed.

 

Nicholas Eberstadt wrote Men Without Work: America’s Invisible Crisis to warn us of a major problem. He gave a summary in the Wall Street Journal: “The Idle Army: America’s Unworking Men” — “Millions of young males have left the workforce and civic life. Full employment? The U.S. isn’t even close.”

“Labor Day is an appropriate moment to reflect on a quiet catastrophe: the collapse, over two generations, of work for American men. During the past half-century, work rates for U.S. males spiraled relentlessly downward. America is now home to a vast army of jobless men who are no longer even looking for work — roughly seven million of them age 25 to 54, the traditional prime of working life.

“…There are also the barriers to work for America’s huge pool of male ex-prisoners and felons not behind bars — a poorly tracked cohort that accounts for one adult male in eight in the civilian population, excluding those in jail now.

“…What do unworking men do with their free time? Sadly, not much that’s constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: ‘neither employed nor in education or training.’ Time-use surveys suggest they are almost entirely idle — helping out around the house less than unemployed men; caring for others less than employed women; volunteering and engaging in religious activities less than working men and women or unemployed men. For the NEETs, ‘socializing, relaxing and leisure’ is a full-time occupation, accounting for 3,000 hours a year, much of this time in front of television or computer screens.

“…Imagine how different America would be today if another roughly 10 million men held paying jobs. It is imperative for the future health of the country to make a determined and sustained effort to bring these detached men back—into the workplace, into their families, into civil society. “

His book got a lot of attention, such as — “Men not at work: America’s hidden unemployment” by Larry Summers in the Financial Times. “America’s Lost Workers” by Jeff Madrick in the New York Review of Books. Also see the follow-up discussion between the author and Madrick. “Enduring mystery of US recovery: men without work” by Simon Montlake in the Christian Science Monitor. The right-wing hack view: “Why Are Millions of Men Choosing Not to Work?” by George Will in the National Review — “American men who choose not to work are choosing lives of quiet self-emasculation.”

Labor force participation: high school graduates

The book and reviews draw on a large foundation of data, which contradicts most of the easy solutions given by pundits. The best summary of this serious and growth problem is this June 2016 report by the Council of Economic Advisors

The long-term decline in prime-age male labor force participation.

“…Participation rates by educational attainment, previously quite similar, have diverged since the 1960s. In 1964, 98% of prime-age men with a college degree or more participated in the workforce, compared to 97% of men with a high school degree or less. In 2015, the rate for college-educated men had fallen slightly to 94% while the rate for men with a high school degree or less had plummeted to 83%. Lower rates of labor force participation have affected all races and ethnicities, although participation has declined most steeply and remains lowest for prime-age black men.

“Participation at nearly every age has fallen for nearly every consecutive cohort of men, meaning that falling participation among prime-age men is largely a function of lower participation at all ages rather than shocks at a particular age or for a particular birth cohort.

“…Less than a quarter of prime-age men who are not in the workforce have a working spouse, and that figure has actually decreased during the last 50 years. The data suggest that public assistance can explain very little of the decline in labor force participation rates for prime-age men.

“Nearly 36% of prime-age men not in the labor force lived in poverty in 2014 — casting doubt on the hypothesis that nonparticipation represents a choice enabled by other personal means or income sources. In contrast, reductions in the demand for labor, especially for lower-skilled men, appear to be an important component of the decline in prime-age male labor force participation. This reduction in demand, as reflected in lower wages, could reflect the broader evolution of technology, automation, and globalization in the U.S. economy.”

“…Conventional economic theory posits that more “flexible” labor markets — where it is easier to hire and fire workers — facilitate matches between employers and individuals who want to work. Yet despite having among the most flexible labor markets in the OECD — with low levels of labor market regulation and employment protections, a low minimum cost of labor, and low rates of collective bargaining coverage — the United States has one of the lowest prime-age male labor force participation rates of OECD member countries.

“U.S. labor markets are much less “supportive” than those in other OECD countries. The United States spends 0.1% of GDP on so-called “active labor market policies” such as job-search assistance and job training that help keep unemployed workers connected to the labor force, much less than the OECD average of 0.6 % of GDP, and less than nearly every other OECD country. The contrast in participation rates reveals a flaw in the standard view about the tradeoffs between flexibility and supportive labor policies.”

Income of prime aged males

From the June 2016 CEA report cited above.

Sources of income for non-working men

Not working does not mean they have no income. These non-working men often worked at some point during the year. Many of them live at home. In 1960 60% of non-college educated were married or cohabitating while 20% lived with parents.  In 2014 only 27% were married/cohabitating and 36% lived with parents. (Source: Pew Research.) Also often ignored is that many of these people work off-the-books (so the right-hand column is understated).

Despite lurid stories often given, these men are seldom supported by spouses. As the White House report says, “fewer than a quarter of prime-age men who are not in the workforce have a working spouse, and that figure has actually decreased during the last 50 years….”

An alternative, and better, explanation

Most explanations look at the demand side (fewer jobs paying a living wage) or supply side (welfare and disability payments substitute for work). While the data shows that these have a role, especially the former. There is a seldom-mentioned additional factor, which — unlike the more popular stories — might explain the lower participation rate of prime age males:  men are not just dropping out of the labor force. They are dropping out of the rat race. They have good reason to do so. See tomorrow’s post for details.

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