Last week, the particular employment news was about how payrolls increased simply by 269, 000 jobs and blew past requirement s. Yet, when we looked at the particular number of employed persons , it turned out that the number of employed people has gone down recently. At 158. 4 million, total employment is still almost 400, 000 workers beneath where it was before the Covid Panic of 2020.
Those who support the everything-is-great narrative have taken care of immediately the unimpressive employed-workers amounts by dismissing them because of workers retiring and other market changes. These details, however , require that we ignore the fact that millions of men age 25-54— that is, men of working age— have eliminated themselves from the workforce. Whenever so many men— men who would have been in the workforce 20 or 30 years ago— aren’t even trying to get a job, this lowers the unemployment rate and makes overall jobs numbers look a lot more impressive.
In fact , as of September of the year, there appears to be almost a six-million-man gap involving the number of men in the prime-age group— age 25-54— as well as the number of prime-age men actually in the workforce. Depending on the reason why they’re out of the workforce, which is potentially some very bad information for both the economy and for community overall.
How Many Men Are Out of the Work Force?
Prime-age man workforce participation rose year-over-year in November, rising in order to 88. 4 percent above last November’s estimate associated with 88. 2 percent. Workforce participation has been climbing out of a hole since the price hit an all-time low of 86. 4 % during April 2020.
The larger trend in workforce participation for prime-age males, however , has been one of decrease for decades. During the 1950s plus into the early 60s, prime-age workforce participation for men had been nearly 98 percent. That began to fall throughout the sixties, and by 1980, it was close to 94 percent. The trend did not end there, however , and also during the construction boom from the housing-bubble years, participation in no way rose above 91. 4 percent. The participation rate never risen above 90 % since 2009.
What does this mean in total numbers of prime-age males? If we look at the difference between complete prime-age men, and the count of them in the work force, we find that the gap as of Nov was about 7, 040, 500 men.
Source: OECD: “ Working Age Human population, Age 25-54”; Agency of Labor Statistics (Current Population Survey).
The workforce calculate is of c ivilian workers, however , when we account for approximately a single million active-duty males, that leaves us with about 6 million men from the work force. But what about stay-at-home dads? Many of these dads possess at least part-time jobs, and are also thus still in the work force. According to Census data, however , the number of stay-at-home dads that are also “ out of the workforce” numbers approximately 200, 000 .
So , if we shrink that gap from the men in the military through the stay-at-home dads exactly who don’t earn wages, we are left with about five. 8 million men that are spending their days doing something other than working for (legal) wages or parenting kids.
So , just how are these men making it through without income? According to research by Ariel Binder and John Certain , most of these men are low-income, but receive income from parents, spouses, and girlfriends. Among men not within the work force, this cohabitants’ income “ accounts for the largest share of income ” in the households where these men reside. A number of these men elect not to work because the opportunity cost of not working is relatively low. As Alan Kreuger has observed , the decline in workforce participation has been specifically steep among those with cheaper earning potential such as those with a high school education or less . Many men in this category also report poor health and that they take pain medication daily. This suggests high incidence of opioid addiction among males not in the work force. Few younger men who have remaining the workforce are eligible for government disability benefits. Among older men, however , disability advantages supplement income from other family members.
Imagine if These Men Rejoined the task Force?
Having a few million guys leave the workforce hard disks down the unemployment rate. Exactly what would the employment image look like if all these guys were to suddenly join the particular workforce by looking for work?
According to the Agency of Labor Statistics, there is a gap of four million between job openings— 10 million— and overall unemployed workers— 6 million. If all the current work openings were magically filled up by current unemployed workers, that would still leave 2 million unemployed workers. At this point, let’s add back into the work force those 5. almost eight million males who are aren’t in the work force at all. We would then have a situation by which all job openings had been filled and we still might have 7. 8 mil unemployed workers. The joblessness rate would increase in order to 4. 7 percent, or maybe the highest rate since Sept 2021.
But that’s not a very possible scenario. While many of the 6 million unemployed workers are just in transition, many others are unemployed because their industries are cutting jobs, or because the workers generally lack the proper skills or education and learning. When it comes to the men that have left the work force completely, the picture is more hopeless. As we’ve seen, a substantial portion of men who have left the work force have most likely done so for reasons which make them something other than ideal job candidates. If they were to begin looking for work, the much more likely scenario is one in which the presently unemployed 6 million workers would balloon up to more than 10 million. This would drive the unemployment rate upward over 6 percent whilst also softening upward stress on wages.
Source: Bureau of Labor Statistics, Household Employment Survey ; JOLTS Survey ; US Census; Bureau of Labor Statistics (Current Population Survey).
Once layoffs start to accelerate— as many indicators suggest will happen in 2023— the problem will only become worse with all the unemployment rate heading upward even higher.
If one were to go only on the head lines we get from the mainstream business press, though, it will seem like there’s nary a potential worker to be found out there anywhere. The truth is less pleasant since millions of prime-age men tend to be not working, looking for work, or caring for children. That phenomenon is very good for making the official unemployment rate seem lower, but it also lowers the economy’s overall productivity while reducing savings. Even worse are the sociological effects of millions of men sitting down at home living off of government disability checks or the work of relatives, girlfriends and spouses.