The Pandemic Depression
The Global Economy Will Never Be the Same
In the United States, the employment rate among prime working-age men (those between the ages of 25 and 54) has been falling for nearly half a century. The political economist Nicholas Eberstadt highlights this trend in a book published last year, Men Without Work: America’s Invisible Crisis, and it is the focus of a recent Foreign Affairs article, “The Dignity Deficit,” by Arthur Brooks. Both Eberstadt and Brooks regard the decline in male employment as a national crisis. Brooks sees it as a “catastrophic failure.” And according to Eberstadt, it is “a problem so urgent, so immense that it should demand immediate attention and action.”
This article is the first of a two-part series. Part Two examines the United States' disappointing employment performance since 2000.
Although Brooks and Eberstadt are right to emphasize the value of paid work, they misdiagnose the nature and severity of the problem.
As Figure 1 shows, the employment rate among prime-age men was about 94 percent in the 1950s and 1960s. Since 1970 it has declined steadily, dropping to 85 percent as of 2016.
A key contributor to the decline in male employment, according to Eberstadt and Brooks, is the creation of new government benefits and expansion of some existing ones—disability benefits, unemployment insurance, food stamps, housing assistance, Medicaid, veterans benefits, and others. Working-age men who receive such benefits, or who live with someone who does, can make do without employment in a way their counterparts in the 1950s and the early 1960s couldn’t.
There are a number of other causes of shrinking male employment. From 1970 to the present, for instance, the employment rate of prime-age women jumped from 48 to 71 percent. Job competition from women has thus played a role in the decline. So has complementarity: today, more men can forgo employment because they have a wife, partner, or ex-partner with a paycheck. Automation, trade, the decline of unions, and changes in corporate governance have also made the labor market more difficult for and less attractive to less-educated Americans, with fewer decent-paying jobs, stagnant wages, and reduced job security. Men without college degrees, and especially those with no college at all, have seen the sharpest reduction in employment.
A smaller manufacturing sector has also contributed to the employment problem. About 16 percent of all (male and female) working-age Americans had manufacturing jobs in the 1950s and 1960s, but since 1970 the share has fallen steadily, down to just 6 percent as of 2016. Men who used to work in manufacturing, or who grew up expecting to, have been less likely than women to accept a service job instead, perhaps because they see service positions as inconsistent with traditional notions of masculinity. Today, the metropolitan areas with the lowest prime-age male employment rates are often former manufacturing hubs.
Twentieth-century changes to the U.S. criminal justice system are a further factor. As a result of rising crime in the 1960s and 1970s and the government’s incarceration-centered response to that rise, a large number of men have been saddled with the labor market obstacle of a prison record. According to one estimate, one-third of nonemployed men aged 25 to 54 have a criminal record.
Employment is not always a good thing. The need for a paycheck can trap people in careers that divert them from more productive or rewarding pursuits. Paid work can be physically or emotionally stressful. It can be monotonous, boring, alienating. Some jobs require a degree of indifference, meanness, or dishonesty toward customers or subordinates that eats away at one’s humanity. And work can interfere with family life.
Yet employment has significant virtues. It imposes regularity and discipline on people’s lives. It can be a source of mental stimulation. It helps to fulfill the widespread desire to contribute to, and be integrated in, the larger society. It shapes identity and can boost self-esteem. With neighborhood and family ties weakening, the office or factory can be a key site of social interaction. Lack of employment tends to be associated with feelings of social exclusion, discouragement, boredom, and unhappiness. Societies also need a significant majority of people in paid work to help fund government programs. For these reasons, many on the political left would likely agree with Eberstadt and Brooks, who are conservatives, that the decline in employment among prime working-age men is a problem.
It isn’t clear that the fall for prime-age men—from 19 in 20 employed to 17 in 20 employed—should be high on the list of economic concerns.
But is it a big problem? It’s not obvious that this is the case. During the period in which the decline has occurred, from 1970 to the present, the overall prime working-age employment rate has risen from 70 to 78 percent (see Figure 1), because the increase in women’s employment has more than compensated for the fall among men. Given these numbers, it isn’t clear that the fall for prime-age men—from 19 in 20 employed to 17 in 20 employed—should be high on the list of economic concerns.
For Eberstadt and Brooks, however, the worry is only partly economic. Declining male employment is, in Brooks’ words, an “acute crisis of dignity.” According to Eberstadt, it is a social and moral crisis:
It casts those who nature designed to be strong into the role of dependents—on their wives or girlfriends, on their aging parents, or on government welfare. Among those who should be most capable of shouldering the burdens of civic responsibilities, it instead encourages sloth, idleness, and vices perhaps more insidious. Whether we choose to recognize it or not, this feature of the American condition—the new “men without work” normal—is inimical to the American tradition of self-reliance; it is subversive of our national ethos and arguably even of our civilization.
Eberstadt and Brooks are pointing out that when able men can live without engaging in paid labor, something is lost. They are right about this. But in lamenting the loss of employment patterns from half a century ago, they imply that we could somehow return to the economy, the norms, and the government policies that made those patterns possible. About this, they are mistaken.
The rise in women’s participation in higher education and the workforce isn’t going to reverse itself. And as traditional gender norms fade, more men will want to spend more time at home caring for children or other family members.
Manufacturing employment isn’t going to revitalize either, even if the United States reduces imports from low-wage countries such as China and Mexico. The share of people in manufacturing jobs has been falling steadily not just in the United States but in all affluent countries, and automation will ensure that this decline continues.
Policymakers can and should take steps to improve pay levels in low-end jobs. They should also do more to help former prisoners get paid work. But as Figure 2 shows, the downward trend in employment among prime working-age men has occurred in other rich nations too, including those with higher wages and lower rates of incarceration than the United States. This suggests limits to how effective policy can be.
A common conservative prescription for government-sponsored social programs such as disability benefits, food stamps, and Medicaid, endorsed by Eberstadt and Brooks, is to reduce the employment disincentives that they bring by lowering benefit levels, imposing time limits, requiring work, or all of the above. This approach, they say, would force more prime-age men to seek employment, in the same way that the 1996 welfare reform forced able but previously nonemployed single mothers into the work force.
Most other rich nations, however, have more generous government supports for nonemployed men and women than does the United States, and in most of them the level and trend in employment among prime-age men has been similar (see Figure 2). This suggests that the key drivers lie elsewhere.
In order to achieve a significant increase in prime-age men’s employment, the United States probably would have to make such programs significantly less generous or do away with them entirely. But that would impose considerable hardship on Americans who need these programs. And it’s unlikely to happen in any case. As countries get richer, their citizens become more willing to pay for security against life’s risks and for equalization of opportunity. This leads to the creation of public insurance programs and ensures that, once established, such programs become quite popular. "Welfare“ in the United States was an exception—likely a unique exception—to this pattern.
A better idea is to improve work supports—training, counseling, rehabilitation, medical assistance, job placement, post-placement monitoring, and more—for working-age benefit recipients. These supports should be personalized and coordinated. This requires tax dollars, but it doesn’t always work, and is viewed by some as excessively paternalistic. But if policymakers believe in the value of employment, for society and for individuals, it is the right approach to take.
The United States should also improve the financial reward from employment, particularly at the low end. It can do so by increasing the federal minimum wage to $10 per hour and indexing it to inflation. The best existing research suggests that modest increases such as this have had little or no employment-reducing impact. And the government should also increase the Earned Income Tax Credit, a refundable tax credit for workers, for people who don’t have children (a strategy Brooks endorses).
The United States, and the developed world more generally, are unlikely to ever return to a prime-age male employment rate of 90 percent or more. But these steps could help to slow or even reverse the downward trend without endangering the well-being of the most vulnerable.
Read Part Two of this series.