Why Men Are Leaving The Workforce

Summary

The script discusses the decline in workforce participation among prime-age men (25-54), which has become a growing concern for the U.S. economy and society. The trend is attributed to factors like obsolete skills, lower wages, and mental health issues. Education and geographic location also play key roles, with non-college-educated men and those from areas with manufacturing declines leaving the workforce at higher rates. The impact includes slower economic growth, increased wealth gaps, and potential political consequences. Solutions include better training, education, and social support programs.

Takeaways

• 📉 Men aged 25 to 54 have been steadily dropping out of the workforce, with 13.7% not working as of August 2024 compared to 7.2% in 1954.
• ❓ About 10.5% of prime-age men, or roughly 6.8 million, are neither working nor looking for a job, a sharp rise from 2.5% in 1954.
• 🛑 The decline is not due to COVID-19 or economic recessions; it reflects long-term issues like obsolete skills, lack of education, and changing job markets.
• 📚 Education is a significant predictor, with non-college-educated men dropping out of the workforce at higher rates than their college-educated peers.
• 🏭 Manufacturing declines in certain regions have left fewer stable, well-paying jobs for men without college degrees, contributing to their withdrawal from the workforce.
• 💸 Wages for men with only a high school diploma have fallen significantly since 1973, contributing to higher workforce exit rates.
• 💔 Men without children are less likely to work compared to those with children, and there has been a significant decline in marriage and family formation among prime-age men.
• 🤕 Health and mental health issues, including opioid use and disability, have been major factors in men's exit from the workforce, with 57% citing these as reasons.
• 🔧 There's a growing shortage in sectors like construction, where older men are retiring, and fewer younger men are entering these fields.
• 🏗️ The lack of workforce participation among men could have long-term consequences on the US economy, productivity, and even sociopolitical stability.

Q & A

What is the current trend in labor force participation among prime-age men in the US?

There has been a steady decline in labor force participation among prime-age men (aged 25-54). As of August 2024, 13.7% of prime-age men were not working, compared to 7.2% in 1954.

Why is the declining participation of prime-age men in the workforce a concern for the economy?

The declining participation of prime-age men is a concern because it contributes to slower economic growth, larger wealth gaps, reduced productivity, and labor shortages in crucial sectors like construction and manufacturing.

What factors are causing prime-age men to leave the workforce?

Key factors include obsolete skills, lack of education and training, poor work records, declining wages for non-college-educated men, and health or mental health issues.

How has education impacted the labor force participation of men?

Men without a college education are more likely to leave the workforce. The trend is particularly pronounced in regions with manufacturing declines, where non-college-educated men used to have stable, well-paying jobs.

How have wages for non-college-educated men changed over time?

Median annual wages for men with a high school diploma fell from $57,600 in 1973 to $45,000 in 2023 (adjusted for inflation). In contrast, wages for those with a bachelor's degree or more increased by about $6,300 over the same period.

What role does mental health play in men dropping out of the workforce?

Mental health issues are a significant factor, with 57% of men out of the workforce citing physical or mental health as their main reason for not working. A distressing number also report using pain medications daily, contributing to this trend.

How has the opioid crisis contributed to the decline in male labor force participation?

A 2017 research paper estimated that the increase in opioid prescriptions between 1999 and 2015 contributed to about 43% of the decline in men's labor force participation during that period.

What impact does marriage and family status have on male labor force participation?

Men who are married and have children are more likely to stay in the workforce. There has been a rise in prime-age men who have never been married, which correlates with declining male labor force participation.

How do government assistance programs affect the workforce participation of prime-age men?

About 64% of prime-age men who aren't working receive some form of government assistance, with disability insurance being a common source. This can create a perverse incentive for long-term dependence and reduced workforce participation.

What are some potential solutions to increase male labor force participation?

Solutions include better education and training programs, incentivizing stable career pathways, encouraging post-high school education, improving mental health support, and fostering community activities for isolated individuals.

Outlines

00:00

📉 Declining Workforce Participation Among Prime-Age Men

This paragraph discusses the steady decline in the participation of prime-age men (ages 25-54) in the workforce. As of August 2024, 13.7% of these men were not working, compared to 7.2% in 1954. The issue isn't due to COVID-19 or recession, and while the unemployment rate was 3.4%, a larger portion of men are not even looking for work. Factors like obsolete skills, lack of education, and regional manufacturing declines contribute to this trend, which has significant social and economic implications.

05:02

💼 The Role of Health and Mental Well-being in Workforce Decline

This paragraph explores the impact of physical and mental health on labor force participation among men. Many prime-age men who are out of work cite health issues or disability, with opioid use and mental health challenges being common. The scarring effect of long-term unemployment on well-being is highlighted, as well as the complex relationship between depression and dropping out of the workforce. These issues could have serious economic repercussions, including labor shortages and a decline in overall productivity.

10:02

🏗️ Labor Shortages and Economic Impact of Declining Workforce

This paragraph covers the broader economic and sociopolitical consequences of declining male workforce participation, especially in sectors like construction and infrastructure, which are facing severe labor shortages. The U.S. economy could have been significantly stronger in 2023 if job vacancies were filled. The trend is leading to slower economic growth, wealth gaps, and risks of increased radicalization among men feeling left behind. Government policies, such as wage increases and training programs, are suggested as potential solutions.

⚖️ The Controversial Role of Social Welfare in Workforce Trends

This paragraph focuses on the role of social programs, like disability benefits, in shaping workforce participation. While government assistance is necessary for those who are physically or mentally unable to work, some argue that these programs unintentionally foster long-term dependence. Despite this, some experts believe that deeper health issues must be addressed before altering benefits will have any meaningful impact. The importance of community and individual responsibility in addressing the invisible problem of male workforce disengagement is also emphasized.

Keywords

💡Labor Force Participation

Labor force participation refers to the percentage of people who are either working or actively seeking work. The video highlights a significant drop in labor force participation among prime-age men (25-54 years), a key demographic, with 13.7% of them not working as of August 2024. This trend is a central concern in the video, as it represents a broader social and economic issue.

💡Prime-Age Men

Prime-age men are typically defined as those between the ages of 25 and 54, considered to be in their peak working years. The video emphasizes that the declining workforce participation among these men, particularly those without a college education, is a critical issue affecting the economy and society. The percentage of prime-age men not working has more than doubled since 1954.

💡Obsolete Skills

Obsolete skills refer to skills that are no longer in demand due to technological advancement or shifts in the economy. The video points out that nearly half of prime-age men out of the workforce cite obsolete skills as a reason for not working, particularly in areas affected by the decline of manufacturing jobs.

💡Manufacturing Decline

Manufacturing decline refers to the reduction in manufacturing jobs, often due to automation and global competition. The video explains that many men without college education used to work in stable manufacturing jobs, but the decline in these sectors has contributed to their exit from the workforce. This decline has also affected communities that once depended on manufacturing industries.

💡Wage Decline

Wage decline is the reduction in real wages over time, adjusted for inflation. The video discusses how median annual wages for men with only a high school diploma have fallen from $57,600 in 1973 to $45,000 in 2023. This decline in wages is linked to the growing exit of men from the workforce, especially those without higher education.

💡Educational Attainment

Educational attainment refers to the highest level of education an individual has completed. The video highlights how men without a college education are more likely to drop out of the workforce, and fewer young men are enrolling in college. This trend plays a crucial role in the declining labor force participation of prime-age men.

💡Mental Health

Mental health in the video is linked to the emotional and psychological well-being of men who have dropped out of the workforce. The video notes that many men cite poor mental health and depression as factors in their unemployment. It also explores how unemployment can lead to worsening mental health and the role of opioid use in this context.

💡Opioid Crisis

The opioid crisis refers to the widespread misuse of opioid medications, which has contributed to various social issues, including labor force decline. The video references a study showing that opioid prescriptions between 1999 and 2015 accounted for 43% of the decline in men's labor force participation. Opioid addiction is linked to both physical and metaphysical pain experienced by men out of the workforce.

💡Disability Benefits

Disability benefits are government-provided financial assistance to individuals who are unable to work due to disability or health issues. The video discusses how many prime-age men not working rely on these benefits, with 64% receiving some form of government assistance. However, there is concern that the system may unintentionally subsidize long-term dependence and inactivity.

💡Economic Growth

Economic growth refers to the increase in a country's production of goods and services over time. The video argues that the declining workforce participation of prime-age men negatively impacts economic growth, leading to slower GDP growth and larger wealth gaps. It also notes that filling job vacancies could have added billions to the U.S. economy in 2023.

Highlights

13.7% of prime age men (25-54) were not working as of August 2024, compared to 7.2% in 1954.

The long-term decline in male labor force participation is a major concern for the economy and political system.

10.5% of prime age men, roughly 6.8 million, are neither working nor looking for work.

This trend is not due to COVID-19 or economic recessions, but a structural problem in the labor market.

Nearly half of prime age men cited obsolete skills, lack of education, or poor work history as reasons for not working.

Education is a key predictor: non-college-educated men leave the workforce at higher rates than their college-educated counterparts.

Men in areas with significant manufacturing decline are more likely to be out of the workforce.

Wages for men with only a high school diploma have fallen by $12,600 (inflation-adjusted) from 1973 to 2023.

A 44% growth in the workforce exit rate among non-college-educated men occurred between 1980 and 2019.

Men without children are less likely to participate in the workforce, especially those with lower education.

57% of men not looking for work cited physical or mental health issues as a primary reason.

The rise in opioid use is linked to 43% of the decline in labor force participation between 1999 and 2015.

Long-term unemployment has a 'scarring effect' on well-being, especially for men, whose identity is often tied to their role as workers.

The US GDP could have been $296 to $442 billion higher in 2023 if the labor shortage had been addressed.

Only 0.03% of US GDP was spent on job training in 2022, compared to the OECD average of 0.1%.

64% of prime age men not working receive some form of government assistance, with many relying on disability benefits.

Transcripts

Men have been steadily dropping out of the workforce,

especially men aged 25 to 54 who are often considered

to be in their prime working years.

As of August 2024, 13.7% of prime age men were not

working, compared to just 7.2% in 1954.

The long term decline in labor force participation by

so-called prime age men is a tremendous worry for our

society, for our economy, and probably also for our

political system.

There's a surplus of prime age workers who could be

working and aren't. And that's this puzzling problem.

The unemployment rate for prime age working men set at

3.4% in August 2024.

This number primarily includes those who are

unemployed and looking for a job, but about 10.5% of

men in their prime working years, or roughly 6.8

million men nationwide, are neither working nor

looking for employment, compared to just 2.5% in 1954.

What's surprising is it's not a Covid phenomenon.

It's not a recession phenomenon.

And for every prime age man who is unemployed and

looking for a job, there are more than three in some

years four who are neither working nor looking for

work.

So what's driving men out of the workforce?

And if left unchecked, what impact will it have on the

US economy?

Nearly half of prime age men out of the workforce

cited obsolete skills, lack of education and training,

poor work record or security issues as a reason

preventing them from work.

Education is a very important predictor of a prime age

man's odds of being out of the labor force.

The big impacts are on the non-college educated groups

on their ability to enter and stay in the labor

market.

Men who are not college educated, leave the workforce

at higher rates than men who are.

At the same time, fewer younger men have been

enrolling in college over the past decade.

If you look at the geography of where the most prime

age men out of the labor force are, in particular,

they tend to be in places that have experienced

manufacturing declines.

They used to graduate with a high school education and

have good, stable jobs.

They weren't glamorous jobs.

They were, you know, automobile factories, sometimes

mines, other manufacturing jobs.

But they were respected.

They were stable, and they could support a family.

Since then, due to technology driven growth, a little

bit due to Chinese competition, you've had a lot of

manufacturing firms and the places where they were

located that you know that were one.

Horse towns become ghost lands, right?

Wages could also be a contributing factor.

Median annual wages for men with a high school diploma

have fallen from just over $57,600 in 1973 to $45,000

in 2023.

Adjusted for inflation.

At the same time, wages for those with a bachelor's

degree or more have increased by about $6,300 during

the same period. This decline in earnings led to a 44%

growth in the exit rate of men without a college

degree from the workforce between 1980 and 2019.

I think honestly, status plays more of a role than

wages. As I said before, you had a manufacturing job.

It was respected.

You were part of a community breadwinner for your

family. You had organizations like unions or rotary

clubs that surrounded your job, and that's gone.

In general, men without children are also less likely

to participate in the workforce compared to men with

children, especially men without education or training

after high school.

What we have seen is a huge rise in the proportion of

prime age men who've never been married and a very,

very significant decline in the proportion who are

currently married and have kids at home.

And those two trends track closely with the big

changes that we've seen about male attachment in the

labor force.

Correlation isn't always causation, but looking at

that correspondence is real important, I think.

Meanwhile, 57% of the roughly 10% of men not looking

for work said their physical or mental health was the

main reason for not being employed, with 55% citing a

disability, serious illness and or receiving

disability benefits.

The whole question about the health and the mental

health of male workforce dropouts is an extremely

important, and I think concerning one distressing

proportion of the men who are out of the workforce say

they're using pain medications every day.

A 2017 research paper estimates that an increase in

opioid prescription between 1999 to 2015 led to about

43% of the decline in men's labor force participation

rate during that period.

So then you have to ask, what sort of pain are we

talking about? Are we talking about physical pain?

Are we talking about metaphysical pain?

There's an enormous amount of depression, mental

health challenges that men in this grouping face.

Some of this is a chicken and egg question.

Did you drop out because you were feeling sad, or are

you sad because you dropped out and you're living on

the couch?

Unemployment is really terrible for people's

well-being. Often people adapt to all kinds of

negative shocks losing a kid, being widowed, whatever,

and eventually kind of come back.

But long term unemployment is one of the worst things

in terms of that.

So what you have is a kind of scarring effect.

And it's worse for men because their identity is much

more wrapped up in their role as a worker.

Men's declining workforce participation can potentially

leave a lasting impact on the American economy.

It means slower growth of the economy.

Obviously, it means bigger wealth gaps within our

society.

It certainly will have an impact on our productivity

and probably already is.

The US has been experiencing a severe shortage in

labor, still missing 1.7 million Americans from the

workforce compared to February 2020.

The McKinsey Global Institute estimates that US GDP

could have been $296 to $442 billion higher in 2023,

if the country had been able to fill its job

vacancies. However, some experts suggest the impacts

of men leaving or never entering the workforce could

be more sector specific.

You need young men coming in wanting to replace those

people going out.

And so if men have primarily been in more manual

labor, more skilled and skilled trades.

If they're older and they're leaving in their

retirement, and there's not as many young men coming

in, both because of declining cohort sizes, but moving

into a different direction type of careers, we're

going to be losing that sector of productivity.

Despite a steep rise in federal funding, the

infrastructure sector hasn't been able to find enough

workers. With the construction workforce shortage

surpassing half a million in 2024.

We are a little concerned about the impact and

inflation is going to have and has had on the movement

of infrastructure dollars into the actual productive

activity. Having a shortage of men in construction is

going to raise a problem.

The trend could have a dire sociopolitical impact as

well.

It'll get worse in ways that we would not like.

I mean, I think it would lead to more premature

deaths but it will also likely lead to radicalization

and polarization because this is a frustrated, left

behind group with no options.

There are problems that government can address and

problems that government can't address.

One of the first functions that beats out policy is

economic growth.

You have a strong economy.

You're going to have increased wage structure, and

it's going to bring people back into the market.

More than a quarter of prime age men not looking for

work cited insufficient pay as a reason preventing

them from work, and nearly half said competitive pay,

salary compensation and or bonuses was a very

important factor when considering whether to enter or

return to the workforce for the young.

Better training skills training.

Better post some form of post-high school education,

encouraging that, maybe even subsidizing that.

I think part of the mental youth mental health crisis

has to do with what's next.

What's I going to do?

What am I going to do? Are there any stable jobs I

can't afford college.

All those questions all come together.

And so models that help them kind of give them a jump

start can be really effective ways of intervening.

There are actually now really promising programs in

high schools which teach kids financial literacy.

They teach them about equitable entrepreneurship.

They teach them about how do you foster better mental

health as part of the workplace.

And it seems to inspire kids to go on to college,

right, because they sort of see a pathway where they

didn't see it before.

29% of men out of the labor force said that training

and educational programs was another important factor

in considering a return to the workforce.

Having the type of commitment from the employer to

train and retain and offer upward mobility for

workers, I think will be very important.

Trying to figure out more about career pathways in the

labor market and not just the education side.

So how is it that someone moves from first job, next

job to best job.

How do we help people understand and navigate?

Nearly a quarter of working Americans said they weren't

satisfied with their growth opportunities in the

workplace compared to other OECD countries that, on

average, spend 0.1% of their GDP on training their

workers, the US spent only 0.03% of their GDP on job

training in 2022.

Older age groups, it's tougher.

You know, you're probably not going to get these guys

to retrain, but you can get there are a lot of

programs that have largely been pioneered in the UK

much more than here, but we're starting to pick up on

them that literally just try and reboot community

activities. They get these isolated people and despair

out of their houses.

It can make a difference.

Social programs like disability benefits spark

contentious debate.

It's very controversial.

People have very strong opinions about this.

While we don't know why it is happening, we can be

pretty clear that the social welfare programs are

helping and the disability programs are helping to

finance this, situation in a way that was never

originally intended.

A 2018 analysis by the Joint Economic Committee found

that 64% of prime aged men who aren't working were

receiving some sort of government assistance.

So the one benefit that they rely heavily on is

disability insurance.

One, because they often are unable to work if they

have a physical injury or high levels of addiction or

whatever. But it also provides health insurance, which

is huge.

Very much against the initial intentions of the

founders of the program.

They've ended up with a perverse situation that too

often subsidizes or even incentivizes helplessness and

long term dependance.

If we thought about a system in which we had a work

first principle where the incentives were for getting

the training and then showing up at the job and then

staying at the job.

I think we'd be in a lot better place than we are

today.

However, some experts remain doubtful about whether

altering the benefits program will lead to meaningful

results.

I think until we deal with the deeper problem of ill

health, ill mental health, these guys aren't going to

respond to incentives.

Everybody is responsible for their, you know, for their

brothers. Everybody's responsible for their neighbors

and their friends.

And we ourselves as citizens can help to shine a

spotlight on this.

It shouldn't be America's invisible problem.

And the more that we talk about it, the more that we

pay attention to it, the closer we get to turning this

around.