Job market losing working-age men
Their withdrawal carries significant social, economic costs.
Millions of workers who dropped out of the job market during the last economic slump were supposed to jump back in once things turned around. But more than six years after the recession ended, the missing millions are increasingly looking like they’re gone for good.
The nation’s labor participation rate — defined as the share of the working-age population that is either working or looking for work — hasn’t budged from a 38-year-low of 62.6 percent this summer. And most experts don’t see an upswing on the way.
The reasons include the nation’s aging population, swelling ranks of people on disability and the changing nature of jobs. But one of the biggest factors has to do with men in the prime of their work lives, particularly those with less education.
Labor participation for men ages 25 to 54 has been declining for decades — but the decline sped up during the recession with large-scale layoffs in construction and manufacturing. Their growing withdrawal from the job market is especially worrisome because it carries significant social and economic costs.
Collectively, these trends indicate that the U.S.’s potential workforce — and thus productive capacity — might be considerably smaller than previously thought. Some economists have long pointed out that the true unemployment figure is higher than the government-reported rate, currently 5.1 percent, because officials don’t count people as unemployed if they’re not actively looking for work.
But more experts are concluding that the great flight of
workers in recent years isn’t going to reverse.
Unemployment varies widely across the country, from 4 percent or lower in many towns in Iowa and Minnesota to double digits in some places in Central California. Still, the overall improvement has been impressive. This summer, there were about 63 job openings for every 100 officia-ly unemployed people. A few years ago it was just 16 openings for every 100.
In the past, a recovering economy usually meant rising labor participation as more people gained confidence and got off the sidelines and into the job market. But not this time. The share of the population 16 years and over in the workforce was 66 percent in December 2007 when the economy fell into recession, and it has ticked down every year since then to 62.6 percent the last three months.
If the U.S. had the same labor participation rate today as in late 2007, the nation’s workforce would be roughly 8 million higher more than the July fifigure of about 157 million.
Labor participation rates are lower for workers as they get closer to retirement age. And the economic downturn forced even more older workers to drop out of the labor force; anecdotal reports abound of laid- off workers taking early retirement.
At the same time, young adults have delayed their entr y into the job market, further depressing labor participation. College enrollment rates were rising before the recession, and the weak recovery has pushed more people to stay in school longer while others who were laid off went back for training.
Many people not in the labor force are working of the books or at temporary jobs or as freelancers, making it difficult to track their employment status. Moreover, decades-old structural problems, including access to public transportation and affordable child care, continue to keep some workers, both male and female, from the workforce.
Labor participation for women 25 to 54, which had risen steadily from the 1960s through 2000, fell back to 73.7 percent this summer from 75.5 percent in late 2007.
The drop has been sharper for men in that age group — to 88 percent from 90.9 percent at the end of 2007. At its peak in the mid-1950s, labor participation for men in their prime working age was nearly 98 percent.
The drop-off of men from the workforce continues to dismay policy experts and economists.
“Those are the ones I find most surprising,” said Sophia Koropeckyj, a labor economist at Moody’s Analytics.
The aging of baby boomers, the youngest of whom are 51 this year, will be a big drag on labor participation rates for years to come. And there’s little indication yet that the decline of men in the work world has stopped.
In a paper in 2013 titled “Wayward Sons,” MIT economist David Autor said that the U.S. economic landscape was undergoing a “tectonic shift.” While women over the decades have gained ground in education and economic measures, including labor participation, men have fallen behind.
That’s particularly worrisome in an economy driven by global competition and rapid changes in technology. “A male high school graduate in America has almost nothing an employer is going to value,” said Harry Holzer, a Georgetown University professor and former chief economist at the Labor Department.
He noted that many men and the U.S. econo - my at large would benefit from stronger vocational and technical programs at schools, with apprenticeships and other career paths.
“On average, low-income, at-risk young men don’t do as well just sitting in a classroom,” Holzer said. “I think a lot of these men would do better if we offered them high-quality work-based education.”