The Great Male Reset

by on March 8, 2014 at 7:09 am in Current Affairs, Data Source, Economics | Permalink

Men between the ages of 25 and 54 are in their prime working years. Generally speaking, they’re too old for college and too young for retirement.

In February 2008, 87.4 percent of men in that demographic had jobs.

Six years later, only 83.2 percent of men in that bracket are working.

That is from Binyamin Appelbaum.

Claudia March 8, 2014 at 7:44 am

Zachary Goldfarb’s “The decline of working men, in one chart” https://twitter.com/Goldfarb/status/441957607558098944/photo/1 gives more context … aka this ‘reset’ has been going on a while

“Generally speaking, they’re too old for college and too young for retirement.”

Also I understand that an important part of the rise in college enrollments in the downturn was among ‘non-traditional’ aka older students. So I am not sure the ‘generally too old for college’ holds. Also just because 50s are a bit young for retirement, some people do retire then. And if population again means that these older workers get more weight in the ‘prime worker’ pool they can depress the participation rate a bit even in among prime workers as whole. Those are minor quibbles on Appelbaum’s point on an “incomplete recovery” though.

Still I think you have to be more careful about trend versus cycle here.

It’s not clear even in this prime worker group to say the pre-recession peak is the point of “recovered.” That might seem like handwaving but if you look at the longer employment to population ratios for men and women … trends are undeniable. And cycles can ‘disguise’ trends on both the upside (in the boom) and on the downside (in the recession). This is not the first reset.

Brian Donohue March 8, 2014 at 9:42 am

One interpretation is that something was going on in the 1950s that was motivating men to get off their asses but has gradually weakened since then.

Larry Siegel March 9, 2014 at 7:51 pm

The lack of a welfare state and the inability of men to live off the earnings of their spouses are a start.

Brian Donohue March 8, 2014 at 9:44 am

Or rather, some combination of things, with different Narratives emphasizing their chosen factors.

Great graph, BTW.

Slocum March 8, 2014 at 10:13 am

But Goldfarb’s chart isn’t 24-54 only, is it? If not, most of the decline in that chart might be explained by increases in post-secondary education and earlier retirement. That’s not what we’re talking about in the 25-54 changes since 2007.

Claudia March 8, 2014 at 11:56 am

Slocum, here’s an employment rate for men 25-54: http://research.stlouisfed.org/fred2/series/LREM25MAUSQ156N Note it’s not seasonally adjusted so it more bumpy but the long downward trend is clear. Of course the two things (and other factors) you mentioned may still help explain this longer trend in prime age men.

vacuum this March 8, 2014 at 1:52 pm

No doubt women work harder. Compare Zachary Goldfarb to Sara Goldfarb.

chris s March 9, 2014 at 9:26 am

As a married man with three children, I can confirm women do indeed work much harder.

ummm March 8, 2014 at 8:06 am

4% doesn’t seem like a big deal

the economy seems to do a pretty good job at absorbing the extra slack from ppl not working

john personna March 8, 2014 at 8:52 am

Amusing phrasing, “the economy” absorbing “from people.”

Brian Donohue March 8, 2014 at 9:45 am

Heh. Ted Kaczynski is nodding his head.

john personna March 8, 2014 at 10:20 am

A pretty good Planet Money says “If you asked someone on the street 100 years ago, ‘How’s the economy doing?’ They wouldn’t have had any idea what you were talking about.” It is about the invention of “national income” (and then GDP). If “ummm” means that GDP has grown while fewer people work … see also The Second Machine Age and etc.

Max Factor March 8, 2014 at 10:42 am

Player Piano is $3.99 this month if you get it on the Kindle. I’m loving it – it’s amazing how much Vonnegut got right such a long time ago. Complaining about automated train service one former conductor mentioned that he once delivered a baby on a train. It’s that kind of experience that is being automated away without an afterthought. Helping someone with their bags, keeping an eye on an unaccompanied minor or senior citizen. Are the driverless busses of the 2020s going to do that?

Brian Donohue March 8, 2014 at 11:06 am

I love Vonnegut, but it’s not obvious to me he got it right. Perhaps he fell for the same “What will we do with all these people?” illusion that so many have over the past couple centuries. People’s apprehension about the present and pessimism about the future often go hand-in-glove with rose-colored historical goggles.

Jamie_NYC March 8, 2014 at 11:33 am

@Max Factor: I think these types of arguments are hilarious. I invent them myself in my spare time, just for fun. Tell me Max: how can a cold, heartless machine – an ‘automobile,’ they call it, ever substitute for warmth, personality and companionship of a horse?

Max Factor March 8, 2014 at 12:05 pm

When 4 million Americans lose their jobs driving busses, trucks and cabs you can ask them your smug questions.

good point March 8, 2014 at 1:56 pm

re: those 4 million. Probably we’ll have to ship them all off to the same island that we sent the lepers and buggy-whip makers.

Stephen Humphrey March 9, 2014 at 12:06 am

So Max Factor, wouldn’t it be better if I purchased the paperback version of Player Piano, instead of the Kindle version you recommended? Of course, I’d be paying over 250% of the Kindle price (before shipping!), but it sure would feel great to know I was helping a master printer somewhere to afford his lifestyle.

Max Factor March 9, 2014 at 9:39 am

23000 people recently submitted applications for 600 WalMart jobs. The acceptance rate rivals Harvard. The jobs are disappearing and will continue to disappear. Maybe if we make enough jokes about technological unemployment it will go away but I doubt it.

Stephen Humphrey March 9, 2014 at 9:31 pm

I’m not absolutely certain I am the target of Max Factor’s response (or non-response, really), but I’m going to assume I am. And I ask, what about my comment seemed like a joke to you?

I am an unemployed (or perhaps underemployed) tech worker. I’d like a serious answer why you recommended the cheapest option for acquiring Player Piano, instead of an option which might employ more people (printers, fulfillment clerks, UPS drivers, among others), but less efficiently than might the electronic-delivery option you recommended.

Do I, as a poorly-employed person have a duty to pay more to keep others employed? Or rather, should I be denied the product at a price-point I can afford because that price-point is somehow unfair to these other workers?

I’d like a serious answer, please. What’s best for me? What’s best for society?

Stephen Humphrey March 11, 2014 at 11:34 pm

Well, besides crickets, apparently none of us is owed anything. Not answers. And not jobs. Without substantive answers to my questions, I guess I’m left to conclude that creative destruction works as well for employers and employees as it does for monopolies and conglomerates. Either that or I’m needing to go find that island filled with displaced blacksmiths and ice salesmen.

Age Of Doubt March 8, 2014 at 8:40 am

What we’re not seeing is the effect of 54+ workers retiring later and keeping labor demand low. Many boomers are working longer for various reasons.

Brian Donohue March 8, 2014 at 9:40 am

The 62 year old down the hall from me was “this close” to retiring in 2000.

Peak Jobs March 8, 2014 at 9:51 am

The sooner we get more people out of work the better. Most people who do have jobs have BS jobs. Enough celebrating the useless victories.

chris s March 9, 2014 at 9:29 am

So over fifty percent of the labor force is in zero marginal product or negative MP jobs? That seems a tad high to me.

Peak Jobs March 9, 2014 at 12:18 pm

BS jobs arent necessarily ZMP. BS jobs are jobs that are not necessary and sometimes they are even harmful. BS jobs are also jobs that should be autonated. Spokespeople, marketers, spammers, hackers, stock pickers, cigarette manufacturers, people who try to get others to click on ads, most salespeople, auditors, compliance personnel, inspectors, ticket punchers, etc. So many people have BS jobs.

Larry Siegel March 9, 2014 at 8:07 pm

Jobs that are “not necessary and even harmful” are ZMP/NMP by definition. A good example that was posted here a while back is the zillions of HR jobs that require someone to say “you have to fax me your W-9 before I can fax you your 1099″ or vice versa, all day. The government has to collect taxes but there has to be a more efficient way.

Z March 8, 2014 at 10:06 am

It has been a while since I looked at the numbers, but the 54+ cohort has made up the lion’s share of new jobs. College graduates pick up some, but the prime age cohort has seen a net loss of jobs since the crash. Maybe that has changed in the last two years, but the numbers for men suggest it has not.

One possible explanation is the population getting older. Another possibility is the change in the labor markets away from low and moderately skilled labor. Another is employers can now get experienced workers cheap so they are not hiring 30-somethings who sit around all day playing on the Internet.

Max Factor March 8, 2014 at 10:17 am

The Z Man seems to do a lot of playing around on the Internet himself. Regardless – he is correct. When you break down the 150k jobs that are created each month the lions share go to older workers. And the majority of the jobs are low paying but nobody ever wants to talk about the quality of the monthly jobs just the BS quantity. Zero Hedge had a chart recently that pointed out how many jobs the older Americans are hoovering up. The labor markets are incredibly fubarred no matter what CNBC and Cowen say.

ummm March 8, 2014 at 10:30 am

“In February 2008, 87.4 percent of men in that demographic had jobs.

Six years later, only 83.2 percent of men in that bracket are working.”

what is the difference between demographic and bracket or working vs ‘had jobs’. Why use different words if the meaning is the same, unless it isn’t?

Max Factor March 8, 2014 at 10:36 am

Lol – you’re never supposed to repeat words when you write. That’s why the syntax is different. The robot journalists may have a different take on the matter but I haven’t seen their style handbook yet.

prior_approval March 8, 2014 at 12:23 pm

‘you’re never supposed to repeat words when you write*

A good technical writer knows this is not true, and anyone who does technical translation hates the people who think using different terms to refer to the precisely same things using the lazy ‘I was taught that is good writing style.’

JWatts March 8, 2014 at 12:29 pm

+1, “A good technical writer knows this is not true”

Max Factor March 8, 2014 at 12:42 pm

My first reprimand from PA! I’m so happy!

Ignatius March 8, 2014 at 2:02 pm

It’s a wonder no one reads technical writing for pleasure.

chris s March 9, 2014 at 9:31 am

…says the non nerd.

farmer March 8, 2014 at 11:39 am

another extremely frustrating thing keeping men in the younger brackets of those ages out of work is the ever-increasing credentialization that has occuerred. It used to be the entry level degree in physical therapy was a 4 year degree. then it became a masters. now you need a phd to realistically work in physical therapy. I just mention that specific subfield b/c i am very familiar with it, but there are no doubt many just like it. So MANY more 25, 26, and 27 year olds are in schooling, totally against their ishes, because it is now required of them

Max Factor March 8, 2014 at 12:09 pm

Great points re: PT. They keep piling on requirements in order to bolster the schools and protect current practitioners. Same thing is going on in accounting. The employers are demanding applicants have CPAs – meanwhile the standards for getting a CPA keep rising.

Slocum March 8, 2014 at 1:48 pm

You’re right — the trend is clear (and this credential inflation is seen in a number of medical specialties), but these doctorates aren’t PhDs (in the case of Physical Therapy, it is a ‘DPT’) — they’re really slightly longer (and more expensive) masters programs. No research is required, just more seat time in the the classroom and/or internships.

There is one thing to say in their defense, however — they do provide these specialists some ammunition in the recurring ‘scope of practice’ skirmishes with physician organizations. The credential inflation may raise the cost of therapists but it could conceivably save money by allowing them to gain greater latitude to operate more independently of much more expensive physicians (fighting one rent-seeking guild with other cheaper rent-seeking guilds — pathetic, but it might actually work)

chris s March 9, 2014 at 9:35 am

Funny, in tech they are moving away from degree requirements. Ten years ago I had a contractor on my team who was excellent. I wanted to hire him full time but he had dropped out of college. By the time I got s waiver for him from hr he was hired away by Microsoft.

LargeCapTrader March 8, 2014 at 11:56 am

It might be a proxy for overall “risk tolerance” of an economy as this cohort seems to embrace riskier careers. I certainly see this in finance and amongst my peers.

Max Factor March 8, 2014 at 12:12 pm

Finance isn’t risky. If you do well you get paid. If you do poorly you don’t get a bonus and you go on to work for a different firm. Unlimited upside and no real downside.

Larry Siegel March 9, 2014 at 8:05 pm

I work in finance. Everyone gets fired, multiple times. The people who leave the field don’t write NYTImes op-ed pieces about it, they move on with their lives and become teachers, marketing executives, software developers, whatever.

Max Factor March 8, 2014 at 12:22 pm

I work with a programmer who was a HFT for three years. He made a lot of money in years one and two but he lost a lot of money in year three. Overall, he lost more money for the firm than he made but he got two large bonuses in years one and two and a good salary all three years. So he destroyed value for his firm but walked away with about 1 mil in cash and benefits for his three years of work. And he got a great job with my organization because he has a great background in HFT and string programming chops. He’s a good guy and much more valuable than me but it’s not fair to say finance is a risky profession.

JWatts March 8, 2014 at 12:31 pm

So, he was fired after 3 years, and that doesn’t strike you as a “risky profession”.

Max Factor March 8, 2014 at 12:36 pm

Fuck no!!! Finance guys go from firm to firm to firm to firm to firm. They’re like football coaches – they get recycled. And nobody checks up on them – they just see shiny names on the resume and a bunch of half truths that sound good. It is not even close to a risky profession. Risk involves putting your own money on the line – not playing with OPM.

Max Factor March 8, 2014 at 12:37 pm

Plus, it’s still very much a who knows who business. You can blow a firm completely to bits and still get a job somewhere else if you have a decent enough reason for your colossal losses.

Max Factor March 8, 2014 at 12:45 pm

My cousin’s friend is “good at math” and was offered one mil (guaranteed) to do something for a hedge fund – my cousin didn’t know the specifics. Maybe he generates 1 mil of value and maybe he doesn’t. But to say what he is doing is “risky” is absurd. At the end of the day all these finance d-bags are as risk averse as their grandmothers.

lurker March 9, 2014 at 3:28 pm

Individuals may be able to game the system with short-term upside and no personal downside, but that’s a similar story to Detroit auto workers in the seventies.

LargeCapTrader March 8, 2014 at 1:06 pm

Max Factor,

Your friend is but one person who luckily, or smartly, learned how to program and your applying it to the whole industry. Ask an equity salesman or a FID trader how easy it is to find a job and you will find a very different answer from someone in risk management or compliance.

Max Factor March 8, 2014 at 1:20 pm

The industry is very good at taking advantage of technology to the detriment of several classes of worker. But my sympathies go to the back office folks who lost their jobs to Mumbai – not to the salesmen. Although if we’re talking about risk the salesman does have a riskier job than those on the investment side. But salesmen made millions when they were valued – it’s their fault for living as if the good times would never end.

Gerry FitzGerald March 8, 2014 at 1:59 pm

This chart is of some interest, but it doesn’t show why the Americans of working age are not working. Has anyone done a survey (poll) of working age Americans who are not now participating in the labor force? Any attempts to increase the participation should would benefit from subcategories, such as: 1) I lost a job and I’m still actively looking for a job. 2) I recently left school and I’m looking for my first fulltime job. 2) My spouse’s income is adequate for us, so I’m not looking for a job, or 3) I retired early because I’m already eligible for a pension or have will have enough money saved to live on until I’m eligible for a pension and/or Social Security . Data on gender, marital status and number of dependent children would also be revealing.

Peter March 9, 2014 at 9:20 am

A person in category 1 (lost a job but actively looking) would be counted as a labor force participant.
An observation regarding category 3: in my work as a service provider in supermarkets, I often see working-age men in the stores with their small children during the day. I used to figure that most of them were out of work and would drop the Mr. Mom role like a hot potato as soon as they found jobs. Or maybe some of them work nonstandard hours. But then again, it’s not impossible that some of them have wives who earn decent money and that they prefer to stay home with the children, especially given the high cost of day care.

Another factor that might depress labor force participation among working-age men is working off the books.

JT March 8, 2014 at 2:06 pm

Do these numbers include self-employed? I’m 61 and happily self-employed since 50, so am I in there somewhere? If not then the gap might not be as large as it appears.

The credential thing is very true – and curious – I work in a (slightly) specialised accounting field and have done most of my working my life, with no qualifications whatsoever other than experience and a degree in history. These days I probably wouldn’t be able to get here from there, yet here I am and earning $200k+ annually.

I’m apparently worth it, since my clients don’t have to use me – so it seems odd that in all likelihood I’d have a hard time even getting started nowadays.

Phil March 8, 2014 at 3:56 pm

“Too old for college”? What does that mean? “Reset” occurs at the individual level. I returned to college twice during this age range. Once for a Masters and later for a J.D. Expanding one’s skill set and desirability to employers does not end at age 22 with just a Bachelors degree.

Kevin Erdmann March 8, 2014 at 6:08 pm

Using the 25-54 age group causes problems. The fact is that the 25-30 and 45-54 age groups have lower participation than 30-44, so a lot of this is simply a function of where the high points and low points on the population pyramid are right now.

R Richard Schweitzer March 8, 2014 at 8:37 pm

A “job” exists where there is “work” to be done. If the work to be done requires less human effort or no human at all there are less jobs, or no job at all.

These issues of “jobs” are really issues about the work required to be done and its requirements of human involvement.

Someone whose name is at the masthead of this blog has written about that.

DK March 9, 2014 at 12:13 pm

Tyler and Alex, what is your position on mandatory retirement age for GMU faculty? (There surely isn’t one currently – right?)

TMC March 9, 2014 at 3:52 pm

Couple more interesting charts H/T Instapundit

http://www.zerohedge.com/news/2014-03-08/demise-american-dream-2-charts

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