Based on the official unemployment rate—which held steady at 4.9 percent last month—America’s labor market has fully recovered from the Great Recession. Indeed, many prominent economists, including Federal Reserve officials, believe we have reached “maximum” employment or something very close to it.
Based on another indicator, however, America’s labor market remains stuck in a long-term crisis—a crisis that has gotten significantly worse since 2008.
Simply put: There are millions of American men in their prime working years who have dropped out of the labor force.
This is more than just a drag on the U.S. economy; in a deeper sense, it represents a tremendous squandering of human potential, and a tragic unraveling of our national ethos. American Enterprise Institute scholar Nicholas Eberstadt, author of the forthcoming book Men Without Work, has called it “a grave social ill” and “a quiet catastrophe.”
To put the catastrophe in perspective: As of August, the labor-force-participation rate (LFPR) among men aged 25 to 54 stood at 88.3 percent—down from 90.5 percent in August 2006, 92 percent in August 1996, 93.8 percent in August 1986, 94.3 percent in August 1976, 96.5 percent in August 1966, and 97.2 percent in August 1956. Before December 2008, the rate had never once fallen below 90 percent. It has now been below 89 percent for more than five years straight.
According to a June 2016 report from the White House Council of Economic Advisers, the only OECD member countries with a lower LFPR among prime-age men are Italy and Israel. And apart from Italy, no OECD country has experienced a larger decline in prime-age-male participation since 1990.
If we look at the total nonemployment rate among this demographic—that is, if we include prime-age men who are unemployed but looking for work—America compares a bit more favorably with its fellow OECD members. Still, as of 2014, the United States had a higher prime-age-male nonemployment rate than countries such as France, Canada, Denmark, Australia, Norway, Austria, the Netherlands, Sweden, the United Kingdom, Germany, New Zealand, Switzerland, and Japan.
“Benchmarked against 1965,” writes Eberstadt, “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.”
Again, this is a long-term, structural problem that will not be solved by an uptick in the business cycle. In fact, the LFPR among prime-age American men was higher during the 1981–82 recession than it was during the Clinton-era tech boom—and it was higher during the Great Recession (2007–09) than it is today.
What explains that? Conservatives often blame the perverse work disincentives baked into America’s social programs and tax policies, along with misguided regulations that make it harder for people to find jobs. Liberals tend to focus on the consequences of deindustrialization, wage stagnation, and “mass incarceration.” Everyone seems to agree that technology and foreign trade have played a role in displacing low-skilled workers, and that better educational outcomes would improve things. How to achieve those better educational outcomes is much less obvious.
Given the duration and magnitude of the crisis, policymakers need to think bigger and bolder than they have in the past.
Apprenticeships deserve particular attention. Both in America and in Western Europe, they have a proven record of developing skilled workers and setting people on a career path at a relatively young age. In fact, writes Urban Institute scholar Robert Lerman, there is compelling evidence that “the rates of return to apprenticeships far exceed alternative training methods for middle-skill jobs.”
This can be seen in countries such as Germany, Austria, and Switzerland, all of which have much larger vocational-training systems than the United States. In today’s Wall Street Journal, economists Edward Lazear of Stanford and Simon Janssen of Germany’s Institute for Employment Research point out that the German system has delivered real benefits to workers without a college degree:
Although Germans are about half as likely [as Americans] to go to college, more than 85% of private-economy workers without college degrees have had vocational training and an apprenticeship. . . . Germans with vocational apprenticeships earn about 92% of the average German wage; American high-school grads earn only 70% of the average American wage. Germans with vocational apprenticeships are considerably better off than their American counterparts. Data show this to be true for nearly 15 years.
Who are America’s nonworking men? As Eberstadt observes, they “tend to be: 1. less educated; 2. never married; 3. native born; and 4. African-American. But those categories intersect in interesting ways.” For example, “Black married men are more likely to be in the workforce than unmarried whites.”
The decline of work is indeed closely related to the decline of marriage among Americans with less education and fewer skills. As University of Pennsylvania law professor Amy Wax has emphasized, “Marriage causes men to become more industrious, law-abiding, and sober.” By the same token, delaying or avoiding marriage makes it easier for men to delay or avoid becoming responsible adults.
At root, work is about pride, dignity, and purpose. It’s about shedding the frivolities of youth and assuming the burdens of maturity. And it’s absolutely critical to family stability, civic engagement, and broad-based prosperity. Eberstadt is correct in describing the labor-force exodus by prime-age men as a quiet catastrophe. Let’s hope more people start noticing it.