The work ethic is such a central part of the American character that it’s hard to imagine it fading. But that’s what seems to be happening in one important part of the labor force. One in eight men 25-to-54 — so-called prime-age male workers — are dropouts. They don’t have a job and, unlike the officially unemployed, aren’t looking for one. They number about 7 million.
Just what role, if any, these nonworking men played in Donald Trump’s election is unclear. What’s not unclear is that these dropouts, after being ignored for years, have suddenly become a hot topic of scholarly study and political debate. There’s been a sea change. In the mid-1960s, only one in 29 prime-age male workers was a dropout. The explosion of dropouts strikes many as dire.
It is also a social crisis — and ... a moral crisis. The growing incapability of grown men to function as breadwinners cannot help but undermine the American family.
The “detachment of so many adult American men from the reality and routines of regular paid labor … can only result in lower living standards, greater economic disparities and slower economic growth,” writes Nicholas Eberstadt of the conservative American Enterprise Institute. “It is also a social crisis — and … a moral crisis. The growing incapability of grown men to function as breadwinners cannot help but undermine the American family.”
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A recent report from Barack Obama’s Council of Economic Advisers echoes similar concerns. The erosion of prime-age male workers “is particularly troubling since workers at this age are at their most productive,” says the council. Greater joblessness is linked to “lower overall well-being and happiness and higher mortality.”
Why are men abandoning the labor market? One obvious reason is the impact of the Great Recession, but this effect has diminished as the recovery has continued. Besides, the rise in male dropouts dates to the mid-1960s.
Nor can it be blamed on two other trends: more men going to college and an increase in early retirement. True, both keep men out of the labor force. Still, focusing on the 25-to-54 age group should minimize these problems.
The most important cause of dropping out is declining wages for low-skilled workers, concluded the Council of Economic Advisers study. The demand for low-skilled workers is falling faster than the supply, causing wages to drop. From 1975 to 2014, the council reported, wages for high-school graduates fell from about 80 percent of wages of college graduates to 60 percent.
As this happens, “more prime-age men choose not to participate in the labor force,” said the council. Put plainly: They decide that working isn’t worth the effort. As for shrinking low-wage employment, the council blames “technology, automation and globalization.”
But dropping out also has other causes. One is the large number of incarcerated men. Although prisoners aren’t counted in the labor force, once they get out of prison, their criminal records make it harder for them to find work.
What’s more controversial — and unsettled — is how much, if at all, government welfare programs encourage labor force dropouts by providing an alternate income source. Eberstadt believes this is crucial, citing studies that roughly two-thirds of households with male dropouts receive disability benefits or other government aid, such as Medicaid. By contrast, the Council of Economic Advisers argues that benefits haven’t increased fast enough to explain the surge in dropouts.
What can be done to minimize dropouts? Should the Federal Reserve and the Trump administration “run the economy hot” — the present fashionable phrase — in the hope that faster economic growth will draw some of the 7 million into newly created jobs? Should disability standards be tightened to force dropouts back into the labor force?
Any debate may turn on whether dropouts are “shirkers” (able-bodied men avoiding work) or “victims” (workers left behind by disability or bad luck). There’s evidence of both. Eberstadt cites surveys that only 15 percent of dropouts “stated they were unemployed because they could not find work.” Other surveys indicate that dropouts spend about eight hours a day “socializing, relaxing and leisure” — watching TV, playing video games or just hanging out.
But nearly half of male dropouts report taking pain pills every day, according to a study by Princeton University economist Alan Krueger. Two-fifths of respondents said their disabilities prevented them “from working on a full-time job for which (they were) qualified.” Male dropouts report they are “less happy, more sad and more stressed” than workers or the unemployed. In a society that worships the work ethic, being a labor force dropout is often a ticket to misery.
Mr. Samuelson has written about business and economic issues since 1977.