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October 11 2016

Young Men Not at Work

Rachel DiCarlo Currie

As Charlotte noted on Friday, AEI scholar Nick Eberstadt has published a new book on the decline of work among prime-age American men, a genuine social crisis that deserves far more attention from our political and journalistic elites.

“Benchmarked against 1965, when American men were at genuine full employment, the ‘male jobs deficit’ in 2015 would be nearly 10 million, even after taking into account an older population and more adults in college,” Eberstadt wrote recently in the Wall Street Journal. According to a White House Council of Economic Advisers report, America has a lower labor-force-participation rate among prime-age men than every other OECD country save for Italy and Israel — and only Italy has experienced a sharper decline since 1990.

The decline of work has been heavily concentrated among lower-skilled men — and especially among lower-skilled young men. In an essay adapted from his June 2016 commencement speech at the University of Chicago’s Booth School of Business, economist Erik Hurst lists some truly remarkable figures:
 

Between 2000 and 2015, the employment rate for lower-skilled men and women between the ages of 21 and 55 fell by 7.5 percentage points. (I’m going to refer to “lower skilled” as anyone with less than a bachelor’s degree.) To be concrete, just over 84 percent of lower-skilled men aged 21–55 had a job in 2000. That number was under 77 percent in 2015. A 7.5 percentage point decline in employment rates is a massive change relative to historical levels. What I also want to stress is that the decline has been persistent. It was falling prior to the recession, fell sharply during the recession, and has barely rebounded after the recession. . . .

As much as we have talked about the decline in employment rates for lower-skilled individuals aged 21–55, it’s even larger for younger, low-skilled men. For low-skilled men in their 20s, employment rates have fallen by about 10 percentage points over the last 15 years — from 82 percent in 2000 to only 72 percent in 2015. This decline is staggering. You might think it’s matched by a rise in school attendance for this age group. That is not the case.
 

The following may be the most shocking number I give you today: in 2015, 22 percent of lower-skilled men aged 21–30 had not worked at all during the prior 12 months. Think about that for a second. Every time I see it, that number blows my mind. In 2000, the fraction of young, lower-skilled men that didn’t work at all during the prior year was a little under 10 percent. Men in their 20s historically are a group with a strong attachment to the labor force. The decline in employment rates for low-skilled men in their 20s was larger than it was for all other sex, age, and skill groups during this same time period.
 

How do we explain all this? Hurst notes that technology has played a big role in reducing the demand for low-skilled labor, with machines increasingly displacing blue-collar workers. He also believes that technology has reduced the supply of low-skilled labor, because it has “increased the value of leisure time.” In other words, things like video games, digital devices, and social media have made it more fun to sit on the couch all day — and, as a result, they’ve made low-wage jobs relatively less appealing.

Hurst points out that, based on Labor Department data, lower-skilled young men appear to spend a particularly large amount of time playing video games. He also observes that “lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s,” despite a significant drop in their employment rate over that same period. Yet Hurst cautions that the pleasures of idleness don’t last forever:

There is some evidence that these young, lower-skilled men who are happy in their 20s become much less happy in their 30s and 40s. They haven’t accumulated on-the-job skills because they spent their 20s idle. Many eventually get married and have kids. When this happens, living in their parents’ basements is no longer a viable option. Playing video games does not put food on their tables. It’s a bad combination: low labor demand plus the accumulated effects of low labor supply makes economic conditions for these aging workers pretty bleak.

These labor-market outcomes affect many facets of society. They affect the take-up rates of government transfer programs. They may explain voting patterns for certain candidates in recent periods. There is rising evidence that lower-skilled workers in their 30s and 40s are increasing their drug use. We have also seen increased suicide rates for lower-skilled workers in middle age. The effects of changing technology on the labor markets of lower-skilled workers will likely have repercussions within the U.S. economy for years to come.
 

Eberstadt rightly calls the decline of work among prime-age men “a quiet catastrophe.” There is no simple solution. But the issue certainly warrants a more prominent place in our national political debate.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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