Today is Labor Day; a time that we typically celebrate the end of summer and the beginning of fall and back to school. In the Love house, it means that all the kids are in college classes and my wife is working on her doctorate. I am the only one not attending class. But Labor Day is typically a time when we honor work.
An article by Nicholas Eberstadt in the Wall Street Journal entitled The Idle Army: America’s Unworking Men was published last week. It is very appropriate as we ponder the value of work today. Eberstadt speaks of a quiet catastrophe—a collapse of work for American men. Over the past fifty years, the work rates of U.S. men have dropped substantially. We are now the home of around seven million men between the ages of 25 to 54, in the traditional prime of their working life, who are not working and are no longer looking for work.
Now this issue is rarely discussed in the public square. In fact, common wisdom holds that a sub 5% unemployment rate in the U.S. is considered to be at full-employment. This was touted in a speech by the vice chairman of the Federal Reserve last week as he praised the accomplishments of that body.
But near full term employment? The current labor force participation rate is at 62.8% with 94,391,000 American’s out of the labor force. This is the lowest percentage level since the Carter Administration. This paltry statistic also goes hand in hand with the anemic economic growth as Obama will be the first president since the Great Depression to not have one year when he was in office with economic growth that was above 3%.
In 2015, the ratio of employment to the population of American males ages 25 to 54 was 84.4%. This is slightly lower than the 86.4% rate that it was at the end of the Great Depression in 1940. When compared to the last time we were at genuine full employment in 1965, the male job deficit in 2015 would be nearly ten million, even after taking account of an older population and more adults in college. When looking at this, it is hard to tout our current time as outstandingly robust in terms of economic growth.
Another transformation over the past fifty years is how we measure unemployment. It used to be there were two classes of workers: those who held a job and those who were unemployed. Now there is a third way, those who are not working and are not seeking a job at all. These people are considered outside the labor force altogether and fall into those not participation in the labor force.
Eberstadt cites a key difference now than in the past is that the U.S. is now rich enough to carry the non-working men. In many cases, the non-working life does not consign a man to complete destitution as it would have decades ago. An interesting paradox is American workers are among the rich world’s hardest working people. No other developed society puts in such long hours of work, while supporting a large share of working age men who do not have a job, are not seeking a job, or are not building skills to have a career.
So what do these idle men do with all their free time? About a tenth are students who are trying to improve their lives. The overwhelming majority fall into a category the British call NEET: “neither employed nor in education or training.” For the NEET, activities such as socializing, relaxing and leisure are full time pursuits. This accounts for 3,000 hours a year with much in front of a TV or computer screen. If you have ever commented that your cousin or friend who seems to have too much time on their hands and is always on some form of social media, they may well be a NEET. My parent’s generation would just label these folks as “lazy.”
There are big changes in the U.S. economy that do play a role here. Manufacturing is in a state of requiring less workers with the rise of robotics and computers. This will cause a major shift in jobs in the future as many positions we know of now will simply go away to automation. It is also unclear if, or what, the new jobs in the future will be for those who are displaced by technological advances.
There has been a general slowing of the economy since the last crash. There is uncertainty where investors are unsure of putting money into a new business venture or expansion. Increasing employee costs are also driving firms to use more technology and less employees. But there is a male flight from work that has been linear over the past two generations in spite of any economic cycle.
Another evidence of this is the rise in disability. In the 1990s, 1 in 40 workers in the U.S. were on Social Security Disability. Today that is closer to 1 in 20. Nearly 1/3 of the total drop in the labor force participation from 2007 to 2015 can be traced to more people going on disability. Today over a third of all disability claims come from back pain or other musculoskeletal issue.
So regardless of these causes, this paradigm shift in working is very important to America’s national interests. Declining labor force participation and falling work rates lead to slower economic growth and wider gaps in income and wealth. Slower growth means less tax revenues and more government expenditures, producing higher deficits and a larger national debt. Unworking men increase the poverty in the U.S., especially among children whose fathers are without a job.
The social effects are great as well. We are all designed to work and create great things. Take that away, begins to take away part of the human soul. This male retreat from the workforce has also accelerated family breakdown, promoted welfare dependence, and recast disability into a viable lifestyle. That lifestyle also comes with a drop in civic engagement and community participation. Skills and talents that could be used to benefit the whole of our country are kept to one’s self or are never developed in a meaningful manner.
Yet, today this tragedy is overlooked by the media, politicians, and business leaders. I believe, as Eberstadt does, that it is time this issue come out of the shadows and begin to be dealt with as part of our national interest. Imagine what our country would look like if an additional ten million men held paying jobs. We would see more economic growth. There would be more involvement in communities. Families would benefit by being supported economically and also socially better. There also would be more satisfaction individually, as work is one of the highest callings that we ever will undertake in life.