Myths and Legends

Believe it or not, I frequently seek out articles, editorials, and op-eds that contradict my working hypotheses in the hope of improving or refuting them. More often than not I am disappointed, generally because so many of these pieces are if anything anti-empirical, relying instead on a combination of political posturing and wishful thinking. I went to the article, “The Myth of a ‘Tight Labor Market'”, at RealClearBooks, assuming that it would challenge my assessment that the U. S. needs a tighter labor market by arguing that tight labor markets don’t have that effect. Instead it provided further confirmation of the conclusions I had already drawn:

Cutting these numbers another way, millennial men’s labor force participation rate is about 15 percentage points lower than that of 45-to-54-year-old men. Many, if not most of America’s 17–20 million male ex-felons don’t work. Despite the political focus on the Trumpian white working class, Millennials, those who have done time, and men higher up the socioeconomic ladder are also among what I call “men out.”

We’re left with the reality that the percentage of men not employed today is about three times what it was during the Truman and Eisenhower eras: well over 20 million men. Not the four million officially deemed to be unemployed.

The possible causes, not fully understood, are many: pain, depression, ill health and opioids; mass incarceration; the internet and online gaming; women’s increasing earning power; government benefits like disability insurance; a sense that women now get many of the better jobs, helicopter parents; or just plain laziness in a culture that has “defined deviancy down,” as the late Sen. Daniel Patrick Moynihan so pithily said.

I think there are other reasons as well. Too many businesses, particularly big ones, are convinced with some reason that labor market will always be loose. If surly, lazy, maleducated, drug-abusing, ill-mannered domestic workers won’t take the jobs on offer at the wages the companies are willing to bestow, polite, grateful workers with advanced degrees from India or China can be brought in instead. That particular strategy won’t last forever. They should look at what’s happening to wages in Mexico, India, China, etc. People don’t leave their home countries casually. As the advantages of moving to the U. S. decline, the pool of workers will to travel will decline, too. Managers should also consider the costs of what is almost literally a Tower of Babel, workers unable to understand each other.