Jobs: While the Fed and government policymakers fret over "full employment," a new study by one of America's leading demographers and economists argues that in fact we are in the midst of a full-blown unemployment crisis — one that remains, in his words, "hidden."
The new jobs report is out. It shows the unemployment rate continuing to hover around 5% while nonfarm payrolls grew a pathetic 151,000 for the month. But even that weak performance doesn't tell the whole story.
Nicholas Eberstadt, a fellow at the American Enterprise Institute, argues in a new book called "Men Without Work," due out next week, that we're suffering not from full employment, but massive underemployment — in particular, nearly one out of six working-age men have no job and are no longer looking for one. A release for his book calls this "a hidden time bomb with far-reaching economic, social and political consequences." With 10 million fewer male workers in the labor force than we should have, it's hard to disagree.
Eberstadt, who is highly respected on both sides of the political spectrum for his rigorous use of data, notes a number of shocking statistics that belie the current wisdom of a booming jobs market. To wit:
- Men age 25 to 54 now have a lower labor participation rate than they did in 1940, as the Great Depression was winding down. It's also far lower than in 1948, the year millions of men from World War II were flooding the labor market.
- As noted earlier, one in six men today have no job and most have given up looking. At current trends, one in five will be out of the labor force in a generation.
- African-American men are twice as likely to be in this condition as either whites or Latinos.
- Many of these nonworking men support themselves by government disability benefits.
- Surveys show an alarming increase among men age 25 to 54, the prime working years, engaged in doing such things as "socializing, relaxing and leisure," "attending gambling establishments," "tobacco and drug use," "listening to the radio" and "arts and crafts as a hobby." Many men, it seems, have virtually no work skills at all — and no way to get them.
- Many of these trends in the collapse of male work may be a result of our soaring prison population and the "prevalence of non-institutionalized felons and ex-prisoners," Eberstadt argues.
This portends an entire generation of men with only a tenuous connection to the discipline and rewards of work, and will have an enormous impact on future generations of young men. This is not exclusively a problem of the lower income classes. Today, women make up 57% of all college graduates, meaning that men in the current generation will be enormously underrepresented in the well-paying professions that require a college degree.
In short, men are in danger of becoming a hidden, and combustible, underclass. And Eberstadt isn't the only one who has noticed.
"Over the last three decades the labor-market trajectory of males in the U.S. has turned downward along four dimensions: skills acquisition, employment rates, occupational stature and real wage levels," wrote MIT economists David Autor and Melanie Wasserman in "Wayward Sons: The Emerging Gender Gap in Labor and Education."
In other words, in every important category men are losing ground.
The MIT economists further argue that young men "born into low-income, single-parent-headed households — which, in the vast majority of cases are female-headed households — appear to fare particularly poorly on numerous social and educational outcomes." With more and more males born into single-parent households, the crisis won't end soon.
Eberstadt in 2013 warned that our reliance on the standard unemployment rate "seriously disguises and understates the magnitude of the ongoing jobs crisis."
We agree fully. As we wrote last week in IBD: "We keep hearing we are 'at or near full employment.' ... This, frankly, is nonsense. Since 2006, the U.S. population has grown from 298 million people to 323 million people, a gain of 25 million, or 8.4%. Over that same time, the number of people who have left the labor force jumped from 76.7 million to 94.3 million, a 23% increase. That's not full employment."
This is a long-term trend, but by far most of those who have left the labor force have been men. Eberstadt, in a piece in the Wall Street Journal, called it an "army" of unemployed men. This can be seen in the civilian labor-force participation rate for men, which gives a far broader idea of how many men are working. Official data show a shocking slide starting in 1948, when roughly 87% of men were taking part in the labor force, falling to about 69% currently — an 18-percentage-point decline.
This is indeed a silent time bomb ticking at the heart of our economy. To ignore it will surely lead the U.S. down the path to terminal economic and productivity decline, a lower standard of living and an also-ran status among the global economies.
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