Consider this piece at the Wall Street Journal by Nicholas Eberstadt:
Since Labor Day 2021, unfilled nonfarm positions have averaged over 11 million a month. For every unemployed person in the U.S. today, there are nearly two open jobs, and the labor shortage affects every region of the country. Major sectors are now wide open to applicants without any great skills, apart from the ability to show up to work, regularly and on time, drug-free.
Why the bizarre imbalance between the demand for work and the supply of it? One critical piece of the puzzle was the policy response to the pandemic.
In 2020-21, Washington pulled out all the monetary and fiscal stops to avoid an economic collapse. Those extraordinary interventions may have forestalled world-wide depression. But they also created disincentives for work as never before.
Padded by transfer payments, disposable income in America spiked in 2020 and 2021, reaching previously unattained heights despite the economic crisis. And after the initial steep but temporary plunge in consumer spending from the Covid shock, the stimulus-funded rebound pushed consumer demand well above its pre-Covid trend line.
Americans actually had more money in their pockets during pandemic emergency years than they cared to spend—so their savings rates doubled. In 2020 and 2021, a windfall of more than $2.5 trillion in extra savings was bestowed by Washington on private households through borrowed public funds. That nest egg could supplement earnings—or substitute for them.
Before the pandemic, as my study “Men Without Work†details, work rates for men of prime working age (25 to 54) had already collapsed to late-Depression-era levels, driven down mainly by a half-century-long “flight from work.†For each jobless prime-age man looking for work, another four were neither working nor looking by 2019.
But the current manpower shortage highlights the new face of the flight from work in modern America. With pre-Covid rates of workforce participation, almost three million more men and women would be in our labor force today. Prime-age men account for only a small share of this shortfall: Half or more of the gap is owing to men and women 55 and older no longer working. Strangely, workforce participation rates for the 55-plus group remain lower now than in summer 2020, before the advent of Covid mRNA vaccines. Why?
That can’t be explained by continuing in higher education. Young men are simply dropping out of the economy. It can’t entirely be explained by early retirement since the numbers are too large.
IMO this change is aligned with the increase in suicides:
I’m open to explanations as to why this should be. Something we’re doing isn’t working.
LFPR has been a bit of mystery for quite a while. As noted the numbers have been down for a while. Lots of explanations but none seem completely correct. For sure, I think there are a lot of people working off the books. We also have other numbers that are puzzling. If we are in a recession, as claimed by many, how do we explain the strong jobs report which also saw a lot of people rejoin the workforce? Why haven’t wages joined the inflationary numbers, especially if job market is tight?
Steve
Anomie? What used to the center is fracturing, birth rates are dropping perhaps showing a pessimism about the future, drug abuse is up, and an increasing social isolation.
You commented on young men, 25 to 54?, whereas Eberstadt features men (and women) older than 55.
I don’t think the covid transfer payments had much to do with lack of employment. How much did individuals actually get? $2,000? The average wage is about $30,000 per year. The covid payments didn’t cover anywhere near that. So what are people living on?
It is possible that the over 55 crowd has reverted to one income households. The kids, if any, are gone; the mortgage, if any, is paid off or refinanced at historically low rates.
I don’t know how suicide rates factor in. Except I think White men have always had an elevated suicide rate.
However, the key statistic, the one that overrides everything else is our below replacement fertility. This is happening everywhere except in sub-Saharan Africa, so it is not an American, or Western, or Christian, or White phenomenon. Villages in rural Germany, Spain, Italy, etc are abandoned. Japan’s population has been falling for a number of years. World population will maximize around 2030 to 2050 (likely 2030), and then decline.
So we, White, brown, black, yellow, red, are failing the basic Darwinian test. There is something anti-human in all modern societies.
One theory is that we are keeping women is school throughout their prime reproductive ages (15 to 25), and then we shunt them into professions where child-bearing is an obstacle to professional success. Colleges, in particular, are called IQ-shredders, because the high-IQ women they educate have very few children. Women with Ph. D.’s typically have no children.