Where have America’s working men gone?

A smaller percentage of American men are working now than at the end of the Great Depression. This is a “quiet catastrophe” for those men and the country. Simon Wilson reports.

What happened?

As of September 2016, some 11.4% of American men of “prime working age” (25-54) were defined as outside the labour force. That’s seven million men who are either unemployed or not seeking a job. The proportion has been growing steadily for decades, from around 3% in the mid-1960s, but the trend has accelerated markedly over the past 20 years.

Of all the economies in the OECD, a club of developed countries, only Israel and Italy have more men outside the labour market. Strikingly, a smaller percentage of US men are working now than in 1940, near the end of the Great Depression. Against a backdrop of steady economic recovery from the financial crisis, the case of the country’s “missing men” is a “quiet catastrophe”, reckons economist Nicholas Eberstadt. The collapse of work for men is a “grave ill”.

What’s causing this?

A range of sociological explanations have been proposed. A few more men are in full-time education. A very few more are stay-at-home dads. Some are former prisoners who find it hard to get a job after release from prison. By some estimates, 12% of adult US men have been convicted of a felony, not including current prisoners; some 34% of non-participating men have criminal records.

Others posit that the opportunity cost of not working has fallen. It is easier to get disability benefits; more men remain unmarried and don’t have families to support; and technological advances (the internet, video gaming) have arguably made unemployment less lonely and socially debilitating. No doubt all of these explanations play some part in the trend. But the underlying cause is economic.

What is the root cause?

The broader story is about demand for labour, and in particular the decline of sectors dominated by male workers. In 1954, the year when the rate of male participation in the workforce was at its highest, the manufacturing and construction sectors accounted for almost two-fifths of all jobs. Now, following the long-term decline of manufacturing and the fall-out from the bursting of the housing bubble, those jobs make up just 13% of the total.

At the same time, some key areas where employment has expanded – such as education, health services and public-sector administration – are those that have traditionally been popular with women. According to figures cited by The Atlantic, there are four occupations expected to add more than 100,000 jobs over the next decade: personal care aides, home health aides, medical secretaries and marketing specialists. All are jobs where there are currently more women than men.

Why does all this matter?

It matters desperately to the people concerned and to the next generations: a body of academic research has found that the children of those affected are in turn much less likely to prosper. Shrinking job opportunities for men entrench poverty, break up families and threaten the social fabric.

In the US, pay for men with only a high-school diploma fell by 21% in real terms between 1979 and 2013 (and a fifth are unemployed). For women with similar qualifications, it rose by 3%. Unless that trend changes, and more men can be reintegrated into the workforce, the US is likely to face massive social dislocation, as well as a giant hit to economic output and productivity.

What can be done?

A new construction boom could certainly help. Conor Sen, a portfolio manager and Bloomberg columnist, wrote a widely shared essay last summer predicting that construction is once again set to become the dominant driver of the US economy, given (a) the size and hence housing needs of the “millennial” generation in years to come; (b) the lack of construction, especially of single family dwellings, since the financial crisis; and (c) the potential for a big boost to infrastructure spending under the new US president.

Sen estimates that in the next few years the sector will require an extra 550,000 to 600,000 workers. The biggest demand for housing is in America’s richest and most populous urban areas, while the worst is the rust belt. So one bold solution would be to subsidise non-working men from poorer areas (in the former industrial heartlands of the northern rust belt, or the Deep South, where non-participation rates can be as high as 40%) to move to the areas in urgent need of more affordable housing.

What else?

Changing attitudes could play a part: plenty of men still appear to think that jobs such as nursing, medical admin or hairdressing are or should be the exclusive preserve of women. And policymakers can help too. America does itself no favours by locking up millions of young men for non-violent offences, thus making it far harder for them to find work when they leave prison.

Equally, better training, retraining, and apprenticeship opportunities would help enormously. Budgets for retraining deskilled US workers are negligible these days – as a share of national income, they are worth only a sixth of the OECD average.

Who are these working men?

They are more likely than working (or jobless-but-looking) men to be young, black and from the south of the US. They’re likely to be less well educated. There used to be very little difference between college graduates and high school drop outs in terms of labour-force participation; now there is a marked divergence. Some 85% of prime-age men without jobs do not have first degrees.

And they are far more likely to be physically unwell (though whether this is cause or symptom of being out of the labour market is moot). Surveys between 2010 and 2016 show that 44% report taking painkillers daily and two-thirds are on prescription medicines. By contrast, only 20% of employed men and 19% of unemployed-but-still-looking men reported taking any painkillers.

 

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