The Myth of a “Tight Labor Market”

Man Out

Unemployed men age faster: studyU

EDITOR’S NOTE: The following is an excerpt from Andrew L. Yarrow’s “Man Out: Men on the Sidelines of American Life,” which will be published by the Brookings Institution Press in September.

America’s “tight labor market” is a sham.

Yes, the headlines scream, “near record low unemployment.” But many economists of all political persuasions scratch their heads when they see little of the wage growth associated with a genuinely tight labor market.

President Trump, before he was inaugurated and started crowing about the low official unemployment rate, frequently described the rate as “totally fiction.”Analysts from the right, like the American Enterprise Institute’s Nicholas Eberstadt, and the left, like Princeton University’s Alan Krueger, have pointed to the sharp decline in the numbers of American men working in recent decades.

Take Hank, a white man in his late 50s from the Cotton Belt, who developed an agricultural software program, only to become abusive to his children and (ex-)wives. He stopped working and went off the grid into rural Appalachia.

Or Yates, who quit his job as a partner in a law firm in his 40s. Descending into a world of prescription-drug abuse and prostitutes, his wife divorced him after a decade of not bringing home the bacon.

And then there’s James, a 60-year-old African American man in the Midwest who had spent time in prison, who said, “There is discrimination that means you don’t even get a job interview. I committed a crime long ago. It’s what I did, not who I am.”

These are among hundreds of men of all ages, races, and classes whom I interviewed throughout the country. None are counted in the unemployment rate.

It’s not just men leaving the workforce. After decades of increasing numbers of women working, this trend began to reverse itself in the early 21st century. But, while some can be accounted for by growing numbers of women choosing to stay home with young children, the story of men who don’t work is different.

The United States, supposedly imbued with a Puritan work ethic and long boasting about its job-creating prowess, now is well behind Germany, Japan, Canada, Britain, and other rich countries in terms of its percentage of adults who work, according to the Organization for Economic Cooperation and Development (OECD).

The Bureau of Labor Statistics (BLS), which sorely needs some new terminology to describe the state of the U.S. workforce, counts only those who have looked for a job within the last four weeks as unemployed. Less noticed are its counts of how many Americans are “participating” in the labor force by working or being “unemployed” as a proportion of the entire “working age” population. Unfortunately, BLS seems stuck in a long-ago world where “prime working age” is still defined as between 25 and 54 years old.

The reality is that millions of us older than 54 work or seek jobs, and a fair number of Americans under 25 also work. If one expands the “prime working age” to age 64, about 18  percent of prime working age men are not in the labor force.

There are further problems with this number: 64 doesn’t even bring us up to full Social Security retirement age (and many work longer); it fails to include the nation’s two million incarcerated men, the at least 10–15 million men who work part-time or in the gig economy — often not by choice — and men like a once high-earning 60-year-old New Yorker who said: “I retired after failing to find a suitable opportunity.” Also uncounted are the several million males between 16 and 24 called “NEETS” (not in education, employment, or training).

Cutting these numbers another way, millennial men’s labor force participation rate is about 15 percentage points lower than that of 45-to-54-year-old men. Many, if not most of America’s 17–20 million male ex-felons don’t work. Despite the political focus on the Trumpian white working class, Millennials, those who have done time, and men higher up the socioeconomic ladder are also among what I call “men out.”

We’re left with the reality that the percentage of men not employed today is about three times what it was during the Truman and Eisenhower eras: well over 20 million men. Not the four million officially deemed to be unemployed.

The possible causes, not fully understood, are many: pain, depression, ill health and opioids; mass incarceration; the internet and online gaming; women’s increasing earning power; government benefits like disability insurance; a sense that women now get many of the better jobs, helicopter parents; or just plain laziness in a culture that has “defined deviancy down,” as the late Sen. Daniel Patrick Moynihan so pithily said.

To paraphrase Mark Twain, there are lies, damned lies, and unemployment rates.

Andrew L. Yarrow is a former New York Times reporter, a historian, and a policy analyst.

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