Why Men Are Leaving The Workforce
Summary
TLDRThe 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
📉 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.
💼 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.
🏗️ 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.
Mindmap
Keywords
💡Labor Force Participation
💡Prime-Age Men
💡Obsolete Skills
💡Manufacturing Decline
💡Wage Decline
💡Educational Attainment
💡Mental Health
💡Opioid Crisis
💡Disability Benefits
💡Economic Growth
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.
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