The U.S.' (Not So) Mysterious Case of the Missing Men

The U.S.' (Not So) Mysterious Case of the Missing Men

It’s been some time since the United States was considered to be amid the Great Recession, a period of general economic decline that spanned from the late 2000s until, depending on who you talk to or what source you are using, sometime in 2015. One of the big effects of the Great Recession, was very high unemployment in the US. At the height of the Great Recession, in October of 2009, unemployment peaked at 10%. Way back in January of this year, Timothy Taylor, the Conversable Economist, wrote a post on the unemployment rate falling and falling fast on its way to pre-Great Recession levels, “the unemployment rate in the last three years has fallen by more than even the most optimistic member of the Federal Reserve Open Market Committee believed was likely.”

Fast forward to 2 September, the monthly jobs report was released by the U.S. Bureau of Labor Statistics that found that unemployment was at 4.9% for the third month in a row. So, the number has halved since the Great Recession, which sounds like great news, right? Not so fast. There are concerns that the statistic is masking a greater problem: The mystery of disappearing men from the workforce.

NPR published an article on this very subject recently, which has elicited responses from a number of economic analysts. The issue centers on men in what is called the “prime working age” or “prime working years”. Basically, men between the ages of 25 and 54. According to the NPR report, “millions of men in their prime working years have dropped out of the workforce — meaning they aren't working or even looking for a job."

Apparently, this mystery of the missing men is not a new trend. It has actually puzzled economists going back decades.

“In the 1960s, nearly 100 percent of men between the ages of 25 and 54 worked. That's fallen over the decades,” said NPR.

A recent report released by the U.S. Council of Economic Advisers (CEA) helps to put the statistic into perspective by putting a number to it. The report said that 83% of men in that prime working age of 25-54 that are not in the labor force also did not work the year before, meaning that 10 million men are missing from the workforce.

So, what is really going on here?

Nicholas Eberstadt, an economic and demographic researcher, says that not much is known about the mystery of the missing men, however, he asserts that “there are factors that make men less likely to be in the labor force — a lack of college degree, being single, or being black.”

Eberstadt also believes that having a criminal record plays a factor with 20 million Americans having felony convictions, the majority of whom are, of course, men. There has also been an influx in people collecting disability insurance.

Another view comes from Robert J. Samuelson who wrote in the Washington Post recently on the subject, referencing the gig economy in an article entitled “A New Era of Labor Scarcity.”  

Both Eberstadt, NPR and to some extent Samuelson, seem to be hinting at an issue of a supply nature, rather than a demand one, which brings us to other possible reasons for the mystery of the disappearing men.

NPR does brush over rather quickly that some men have also found it harder to find so-called “blue-collar” jobs as technology and overseas outsourcing, has moved a lot of jobs out of the U.S.

In, On the Economy, a blog by Jared Bernstein, he writes that, “there’s little mystery here: the driving factor is the loss of employment opportunities, or what economists call weak labor demand, particularly for non-college-educated, prime-age (25-54) workers. It’s not the only factor, but it’s the main one. There are various ways to show this, but the one I find most intuitive, as it’s kinda staring us in the face, is the cyclical pattern of the employment rates of prime-aged men.”

He goes on to explain that overlooking the demand-side overstates the supply-side issues: “when you downplay the straightforward demand-side story, you end up emphasizing supply-side stories about disability insurance, the safety net, and other less important explanations which lead you to prescriptions that are ineffective at best and harmful at worst.”

Indeed, a recent report by the U.S. CEA found that “reductions in labor supply—in other words, prime-age men choosing not to work for a given set of labor market conditions—explain relatively little of the long-run trend…In contrast, reductions in the demand for labor, especially for lower-skilled men, appear to be an important component of the decline in prime-age male labor force participation.”

Dean Baker in a post for the CEPR Beat the Press blog commented on the NPR piece, echoing Bernstein’s assertions, however he goes on to say that it’s not just men, it’s women too!

“Actually, (the mystery of the missing men) really is not much of a mystery. While the (NPR) piece wants to attribute it to the peculiar situation men face in the labor market, it is worth noting that there has also been a sharp decline in the percentage of prime-age women in the labor market. (Actually, a better measure is simply looking at the share of people who are employed. Many workers stop saying they are looking for jobs when they are no longer eligible for unemployment benefits. With a sharp reduction in eligibility for benefits over the last three decades, people who are not working are now much less likely to say they are looking for work.)”

He goes on to say emphatically, “the problem is not too many men getting disability or lacking the skills needed in a 21st century economy, but rather just not enough demand … the villains are not lazy men … the lazy welfare cheat story doesn't fit the data at all.”

The data is interesting and both Bernstein and Baker have some very comprehensive posts in which they lay it all out very well, which you can read here and here.

“Bottom line, no mystery, just the need for a lot more labor demand. And given the persistence of this trend and the extent to which the economy leaves these guys behind, I’m not at all sure we can count on the market to do this for us … we may well need to think in terms of direct job creation,” says Bernstein.

While the question of where the men have gone may not be a mystery after all, how to get them back to work, on the other hand, does appear to be something of a mystery. 

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.

Date: September 13, 2016

Twitter @FocusEconomics

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