The percentage of men in the labor force has fallen faster and further in the U.S. in recent decades than in almost any rich country, a trend White House economists have termed “troubling” and pinned on a lack of employer interest in low-skilled work.
The share of men between the ages of 25 and 54 in the job market has been falling for more than six decades, a phenomenon spotlighted in a 48-page paper released by President Obama’s Council of Economic Advisers Monday.
At 88 percent, the U.S. has the third-lowest participation rate for prime-age men among developed nations, beating out only Italy and Israel. Since 1990, participation for that group has fallen the second-fastest of any country.
The specific problem, the White House economics detail, is that workforce participation used to be nearly universal among men with and without college degress, with labor force participation rates above 97 percent for both categories in the mid-1960s. But over time, labor force participation for men whose education ended at high school has dropped to 83 percent even as it’s only slipped slightly for college graduates. The problem is particularly acute for black men.
Obama’s advisers attribute the dropoff to a lack of demand for low-educated workers. As evidence for that view, they point out that wages have been falling for men with only a high-school education. If supply for low-skilled workers were high, they reason, wages would be going up, not down.
The paper doesn’t supply any detailed reasons for why demand for low-skilled labor is falling, instead gesturing at the “broader evolution of technology, automation and globalization in the U.S. economy” as an explanation.
To lift workforce participation for men, the economic advisers recommend a list of Obama economic proposals, such as boosting demand through public infrastructure spending, raising the minimum wage and boosting collective bargaining. They also would aim to improve what they term the “connective tissue” of the jobs market that may be failing men without college degrees, such as job training programs, unemployment insurance and wage insurance.
The report downplays the role that disability insurance may have played in driving down labor force participation, despite recent suggestions that men may be turning to disability benefits as an alternative to work. Increased Social Security disability insurance use can explain only a half a percentage point of the decline in participation, they find.
More emphasis, however, is given to the high levels of incarceration in the U.S. Although the 1 million-plus men behind bars in the U.S. are excluded from the calculation of the labor force participation rate, they can face struggles finding work once they get out of prison and back into the labor force.
