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Millennial men lagging in workforce participation

In today’s low-unemployment environment, which demographic group is below all others in labor force participation? A recent article in Bloomberg reports the surprising answer:

Ten years after the Great Recession, 25- to 34-year-old men are lagging in the workforce more than any other age and gender demographic. About 500,000 more would be punching the clock today had their employment rate returned to pre-downturn levels.

Many…say they’re in training. Others report disability. All are missing out on a hot labor market and crucial years on the job, ones traditionally filled with the promotions and raises that build the foundation for a career.

In 2016, about 14 percent of 25- to 34-year old men weren’t in the labor force, up from 6.4 percent in 1996, according to economist Didem Tuzemen of the Federal Reserve Bank of Kansas City. Young male participation in October 2018 was below October 2007 levels. Significantly, “Millennial males remain less likely to hold down a job than the generation before them, even as women their age work at higher rates,” Bloomberg reports.

Young men’s absence from the working world

has wider economic consequences. It marks a loss of human talent that dents potential growth. Young people who get a rocky start in the job market face a lasting pay penalty. And economists partly blame the decline in employed, marriageable men for the recent slide in nuptials and increase in out-of-wedlock births. Those trends foster economic insecurity among families, which could worsen outcomes for the next generation.

“At some point, you can have a bit of an effect of a lost generation,” according to David Dorn, an economist at the University of Zurich. “If you get to the point where you’re turning 30, you’ve never held a real job and you don’t have a college education, then it is very hard to recover at that point.”

Economists suggest that a number of factors contribute to Millennial men’s low labor-force participation rate:

Young men have been reporting higher rates of school and training as a reason for their non-employment in a Labor Department survey, and a large share say that disability and illness are keeping them from work. Those factors explain much of the wider post-2007 participation gap between 25- to 34-year-olds and their older counterparts, according to an analysis by Evercore ISI economist Ernie Tedeschi.

Higher incarceration rates also play a role. And there are other reasons:

Better video games might make leisure time more attractive, some economists hypothesize, and opioid use might make many less employable. Young adults increasingly live with their parents, and cohabitation might be providing a “different form of insurance,” said Erik Hurst, an economist at the University of Chicago.

That’s the case with Nathan Butcher, a 25-year-old high school graduate profiled in the article:

Weary of long days earning minimum wage, he quit his job in a pizzeria in June. He wants new employment but won’t take a gig he’ll hate. So for now, the Pittsburgh native and father to young children is living with his mother and training to become an emergency medical technician, hoping to get on the ladder toward a better life.

Butcher acknowledges that his attitude toward work differs from that of his parents’ generation:

“I’m very quick to get frustrated when people refuse to pay me what I’m worth,” he said. His choosiness could be a generational trait, he allows. His mother worked to support her three kids, whether she liked her job or not.

“That was the template for that generation: you were either working and unhappy, or you were a mooch,” he said. “People feel that they have choice nowadays, and they do.”

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