Search
Is America working?

Is America working?

Add to Reading List
Add to Reading List

“America Isn’t Working” screams the headline on this piece by David Wessel of the Hutchins Centre. One in six American men between the ages of 24 and 54 is out of work and the majority of these are not looking for work, either. About a fifth of them are receiving disability benefits. Apparently policies are needed to combat what Charles Murray dubs this “epidemic of idleness”.

But it isn’t that simple. As an aside, Wessel mentions that 70% of women aged 24-54 are working. Indeed they are – in fact it is over 70%. This chart has fascinated me for quite a while:

Main article image

The transformation in working patterns for both men and women is striking. Nor is this change restricted to the US. Here is the UK (this is from ONS as FRED’s data only goes back to 2000):

Main article image

And the ECB reports a similar change in working patterns for the Euro area, although their data only goes up to 2008. The pattern across both the US and Europe for nearly half a century has been declining male employment. For the first thirty years, that was accompanied by sharply rising female employment, but female employment has levelled off since about 1990. Wessel says the reasons for this are “unclear” but I think they might have something to do with this:

Main article image

That’s the proportion of the Chinese population that is employed in industrial production. I’m wary of the “lump of labour” fallacy, but it seems to me that stagnating female employment in Western countries is not unrelated to the industrialisation of China.

Leaving aside the effects of the Chinese labour dump, the changes in working patterns tell an interesting story. The fact that 17% of men are inactive certainly doesn’t mean “America isn’t working”. America is working – in fact considerably more than it was in the 1960s when male participation was nearly 100%. It is insulting to women to mention them only in an aside and imply that their work is not important.

Of course, what those charts don’t tell us is the relative output of men and women. It would be easy to assume that women are largely working part-time, so America remains dependent mainly on the output of men. But that’s not what the data say:

Main article image

Yes, part-time employment has increased – but nowhere near as much as full-time employment. It seems that women generally choose to work full-time, not part-time. The drop in full-time employment in 2009 and its partial replacement with part-time work is clear, but full-time employment is now rising again.

The reasons for the rise of female employment are well-documented – improvements in education, in access to jobs and in career expectations. In the 1960s the vast majority of women were married, and the vast majority of married women did not work - indeed it was a stigma for a man to have a working wife because it implied that he could not support his family. Now, many women choose not to marry, married women expect to work, and the crisis is more one of affordable childcare than access to jobs. And America is now nearly as dependent on the work of women as it is on men. I regard this as a very positive development.

But male employment has been falling more-or-less steadily since the 1960s. One in six men are inactive not because of the recent recession, but because of some kind of secular trend that we have not clearly identified. Wessel suggests that disability payments may be part of the problem. The proportion of men with a disability who are working has fallen since 2008:

Main article image

But it is hard to argue that the reason is over-generous disability benefits. It seems more likely that in a slack labour market, men with disabilities simply find it harder to find work.  Sadly FRED could not provide me with data from before 2008 so I am unable to establish whether putting older men “on the sick” as a way of avoiding redundancy payments has increased the proportion of “men with disabilities” who are not working, but this has been an issue in the UK. To his credit, Wessel does not suggest going down the UK route of dismantling disability benefits to force people back to work. On the contrary, he suggests maintaining disability benefits while helping people to find appropriate work. And he also outlines measures to help disabled people to remain in the workforce. This is both more humane and more effective than the UK’s slash-and-burn approach

Wessel argues that a bigger problem is that employers are not paying high enough wages to attract men, so they aren’t bothering to look for work. Therefore, he argues, the minimum wage should be raised and/or in-work benefits should be increased so that men’s incomes are high enough to make them want to work. I do think he is on to something here – but not just for men.  

When women first started to enter the workforce in significant numbers, there was a considerable gender pay gap across all industries. That pay gap has largely closed, especially for women who don’t have children. And feminists have rejoiced at the success of their mission. But suppose it isn’t actually success at all? Suppose, instead of women’s pay rising to meet that of men, men’s pay has actually fallen to the level of women’s – or rather, average pay levels have been DEPRESSED by the presence in the workforce of large numbers of women who have historically had lower pay?

And there is a further disturbing thought, too. One of the primary reasons for the gender pay gap was the assumption that a man’s pay needed to be enough to support a family, whereas a woman’s pay only needed to be enough to support her. He doesn’t say it, but this assumption underpins Wessel’s assertion that low incomes make men unattractive marriage partners. But women now have as much need to support their families as men do. It is no longer appropriate to devise policy on the assumption that men are always the primary breadwinners. Women now make a very significant contribution to household incomes, and a growing number of married and cohabiting women are becoming primary breadwinners. 

If I am right about this, then the incomes of both men and women are lower than men’s incomes would have been if women had not entered the workforce. In which case there is a strong argument for raising the incomes of both sexes, whether by means of a higher minimum wage, increased in-work benefits, or a basic income. I doubt if Wessel’s suggestion of raising the minimum wage and/or increasing EITC would make much difference to marriage rates, but that doesn’t make it a bad idea. If employers pay higher wages, or the state provides greater income support, both men and women will be better able to support their families.  And that would be a good thing. So by all means, increase the minimum wage and raise EITC. Or better still, introduce a basic income. But do it so that EVERYONE is better off – not so that men are better off.  And recognise the important contribution that women make to the economy, both as workers and as mothers.

Increasing incomes might encourage more men to look for work, but that doesn’t necessarily mean they will find what they are looking for. I don’t think wage rates are the primary cause of declining male employment. The real issue is the changing nature of work.  

Western economies are moving from a production-dominated model to a services-dominated model, and employers in service industries often prefer to employ women because they believe that they are better at the “softer” skills that are very important in these industries. Men, too, can be reluctant to do low-paid service jobs, especially if they are dominated by women, because they consider them to be beneath them. Old attitudes about the relative value of “women’s jobs” and “men’s jobs” die hard, and many men remain wedded to the idea that “making stuff” is men’s work and they should not have to do jobs that involve serving or caring for people. Until men change their attitude to service work, and service industry employers change their attitude to men, male employment will continue to decline. 

 

JOIN PIERIA TODAY!

Keep up to date with the latest thinking on some of the day's biggest issues and get instant access to our members-only features, such as the News DashboardReading ListBookshelf & Newsletter. It's completely free.

Comments

Please read our Community Guidelines before posting

Well, I'm not sure about that. I haven't researched this, but from the references I've seen in the literature (in Hay's paper and elsewhere), my understanding was that the statistics are asymmetrical: while prisoners do not increase the unemployment rate, they do in fact decrease the employment rate.

And then the downward curve of the latter (shown above) would in fact be partly due to the increasing use of imprisonment.

Frances Coppola

Norman,

All very true, and quite shocking. But as far as I know those in prison are not included in measures of labor force participation.

A big part of the explanation is the difference between rates of imprisonment between 1) males and females, and 2) the United States and its Western peers. While crime has actually decreased, criminal justice in the US has undergone an orgy of punitiveness over the past generation that is just astonishing from a European perspective. Minor non-violent crimes, such as property crimes and drug crimes, routinely attract long terms of imprisonment whereas they would draw a suspended sentence or a fine in much of the rest of the West.

The US incarceration rate in 2009 was 743 per 100,000 of national population. By comparison, in 2008-2010, the rate was 154 per 100,000 in England and Wales, 133 in Australia, 117 in Canada, 85 in Germany, 78 in Sweden, and 59 in Japan. The US actually has more people in prison per capita than the Soviet Union had at the height of Stalin's Gulag Archipelago. And this is a very recent phenomenon: as late as the 1970s, the US rate was only around 100 per 100,000. It's largely a question of the hardening of social attitudes that Reaganism and its heirs brought along.

And the male incarceration rate is roughly 15 times the female incarceration rate: the male rate in the US is currently well in excess of 1,000 per 100,000.

As the political scientist Colin Hay has noted, if the incarcerated are counted among the ranks of the unemployed, the US male jobless rate rises to a level above the European average for most of the period since the mid-1970s! ("What's Globalisation Got To Do With It? Economic Interdependence and the Future of European Welfare States", Government and Opposition, Vol. 41 [2006], pp. 21-22.) This is just not noticed generally, because for ideological and cultural reasons, the rapid expansion of the penal system has not been regarded as an intervention in the labour market. Although that's exactly what it is.

You have done a wonderful job presenting a fact based overview of anthropic/cultural and inferred technological influences that are a logical progression of change in relatively free economies driven by supply and demand. I suspect you already have a favorite answer for the questions you leave open. I believe the slowdown in consumption that creates excess labor, viewed by some as idleness, is a direct reflection of an instinctual and moral human balancing act required to define a quality of life and provide for the progeny.

If the re-balance is not successful, a logical extension might be more lines on the graph reflecting the percentage of children and the underclass that are "idle".

I won't be drawn into the blind of 'women's worth' as I no longer think gender has much to do with inequality in the West. It's difficult to see how anyone is worth more than another and how we allow amassed money to ruin democracy. Not sure on the soft skills gender difference either. I'd speculate so many men in prime working age are not in work or seeking it might be because they are delicate flowers. I usually found women tougher than men in all but a few departments, and most men weren't much good at the 'heavy lifting' either. Huge numbers of jobs are demeaning and 'scar the soul'. It could be men are particularly susceptible, maybe even to hormone changes, whilst being demeaned by low status or a miserable boss. Monkeys down tools when fed only cucumber whilst others get grapes. Chimps can even get annoyed whilst getting personal grapes whilst another does not. All sorts of chemical-psychological effects take place in group-pack behaviour. I can no loner work, on moral principle (dismal teaching for £54K debt and no social mobility or wage reward) a a university lecturer, but I'd begun to notice feeling nausea when in the same room as management or the textbook teaching crowd. HE could be provided much cheaper and be better and more enjoyable, but this just doesn't suit the faculty. If I was sick of the dire moral state of the academy, what do many feel in much less protected jobs?

What's need is a complex plan to provide income for all with obligation to do necessary work. The plan would have to shift to simplexity in practice. The ideologies of hard work, meritocracy, private property, hierarchy and more are embedded as deeply as the crud that allowed slavery and discrimination against gays, women, the disabled and tolerated slavery ... all perhaps now re-appearing in sublimated form against men with limited money. We have not examined in any detail whether our work systems are fair to anyone.

We also have almost no clue about the real state of unemployment-underemployment or even what work really needs to be done on the planet. If work was so marvellous people winning the lottery would hardly give it up. There are deep questions why work has to be motivated by poverty, a matter standard around the world 'achieved' by subsistence wages or the threat of no job. The Japanese are giving up sex, with their red light districts so short of custom they admit foreigners. Economics can't provide much insight on these matters or the job market. It doesn't do the necessary leg work. Our current 'analysis' would lead us into attempts to force some people to work to disadvantage them when robots can do everything. Even in the 80's we used to talk of 'neurocracy' and we have no idea now how many jobs are necessary. We're so scared of "economics" we don't understand a world with 80% unemployment might be a damn fine thing.

We got by once without women doing paid work, so what is the value of women's work now? Actually, most women always did lots of work, but let's ignore that - what do we actually get from having women working or kids not working and extending childhood to 21 through child-minding universities? How would we find out? I've seen plenty of cultures where men really value women's work, because these men do almost none whilst the women (and kids) labour in the fields.

Strikes me all the current debate has real problems with meaning and getting facts that allow real discussion. I'd guess many men are so depressed they have turned off work much as the Japanese are turning off sex and most the world off intimacy. I don't think we have any of this right and we can't get there because we keep starting in figures that can't be valid. Elizabeth puts forward some of the questions we'd need to answer. There are many more. None of us would be earning a living if agricultural workers just did enough to feed themselves.

You're always a pleasure to read, even when I disagree.

Frances, a basic question keeps coming into my head when I read about American men not working and not looking for work. What do they live on? I doubt if many would be the equivalent of the old-fashioned English "gentleman", who did not work as he lived on his income from property. Are they supported by their friends or families? Are they really self-employed and part of the Black Economy? Does their income come from crime? The last two suggestions are sometimes implied by commentators but is there any hard evidence?

Twitter Feed

RT @Frances_Coppola: New CC post: Krugman, Bowman and the monetary financing of governments http://t.co/qw7HA6RXwV a response to @s8mb @obo…