Men are falling behind in the jobs boom

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Bloomberg Opinion — Economic insights can be found in surprising places. In a brothel, for example, how services are priced and who ends up working there can reveal a lot about the state of the business cycle. It also reflects structural changes in our economy and society.

When I spent time at Moonlight Bunny Ranch in Nevada while doing research for a book a few years ago, I was amazed at how many women came from families where the men didn't work. Many had husbands, boyfriends, brothers, and male cousins ​​who were not in the workforce, jobless, and sometimes not even looking.

This pattern has recently emerged in a growing number of American households. During every recession in the last 40 years, a significant number of men, more than women, have left the workforce and never returned. So far, this has been true for the pandemic as well, despite rising wages and the best job market in decades. The working-age male labor force participation rate (the proportion of men ages 25 to 54 who are working or looking for work) has declined over the years from 96% in 1970 to about 89% in 2020 before the pandemic.

And despite abundant opportunities now, the numbers have not recovered to pre-pandemic levels. According to the latest estimate from November 2021, only 88.2% of working-age men are participating in the US workforce, making it clear that we need a new approach to jobs.

Men with less education are more likely to drop out; the rate of working-age male high school graduates in the workforce remains 1.37 percentage points lower than it was before the pandemic, and only 84% of men without college degrees are in the workforce. Some women also dropped out of the workforce, but not as many. The female participation rate fell to 0.62%, even as it bore the brunt of irregular schooling. The numbers look worse in some areas: In November, just 83% of working-age men were in the workforce in West Virginia and Vermont, and just 79% in Mississippi, while 92% of working-age men productively participated in the labor market in Utah.

Economists have offered many reasons why fewer men are working in the prime years of their careers. One is that technology and globalization destroyed the mundane jobs that provided employment for many. The idea is that these jobs are gone and men are not getting the skills they need to thrive in the new economy. Some men live in areas with poor job prospects, and Americans are less likely to move. There is another theory that better leisure options, such as video games, reduce the desire to work.

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In addition, changes to the disability program made it easier to claim benefits and never return to the job market and Americans are generally sicker: 35% of disabled Americans report a mental health disorder and 30% report disabilities that may be related to obesity. Opioids also play a role, but how this plays out is unclear. The burden of an opioid addiction could keep people from working, or some economists speculate that a bleak job market like the one we had at the start of the pandemic could cause more people to turn to drugs.

Regardless of the cause, the results are dire for families and the economy. Time away from work is associated with depression and poor health. Keeping people employed and productive is also important for a growing, vibrant and inclusive economy that offers the possibility of upward mobility. If working-age males continue to drop out of school, we run the risk of forming a permanent underclass that cannot work to get ahead.

So far, public policy has not been very effective in mitigating the trend. Mainly, we have relied on monetary policy in the hope that a tight labor market and higher wages will induce more people to work. But monetary policy is not well prepared to deal with major structural problems. The labor market is very tight right now and we still have a problem of lack of work. The ideas put forward by the Biden administration and some conservatives will also fall short. For example, offering free community colleges to teach skills has a mixed record, largely because they often don't teach the skills people need and dropout rates are high. Guaranteed jobs won't do either, since the problem is not a lack of jobs.

We need to think big and create an economy where people at all levels can thrive and reach their potential. And that starts with better and more rigorous secondary education and reviving vocational high schools. High school dropout rates have been falling. These are the years when it is easiest to reach out to young men, engage them, and teach them the skills they need. The community college solution is simply to try to make up for a mediocre or poor high school education. It would be more effective to make the time spent in high school more valuable and useful.

The pandemic intensified the challenges in our changing economy and pushed even more young people out of work. It also showed that we have to try something new.

This notice does not necessarily reflect the views of the editorial board or of Bloomberg LP and its owners.

This article was translated by Miriam Salazar