Why are so many men not working?
Photo: Arielle Jay. Source: Morguefile
Over the past 40 years the rate at which prime-aged men participate in the labor force has fallen from 94% to 88%. That may not seem like a lot, but it’s over 7 million men who could be working, but aren’t. They’re not retired – it takes a lot of money to pay for retirement that early. Some of them are in school, but not enough to explain why the US has fewer men working than any other country, except Italy.
It could be because wages are so low and disability payments are so high. That means there’s less incentive to work. It could be that a lot of these labor force dropouts have criminal records. There are over 20 million current and former felons among the population. It’s a lot harder for convicts to find a job, so they get discouraged and drop out. But drug abuse is a major issue. Nearly half of all non-working prime-aged men take opioids daily, either because they’re sick or because they’re addicted. A recent study in Ohio found that over 10% of the population had been prescribed pain-killers over a three-month period.
Labor Force Participation Rate for Men Aged 24-54. Source: Bureau of Labor Statistics
This is a vicious cycle. There are millions of open positions that companies want to fill. Many of these jobs come with training, good wages, and health insurance. But firms need sober workers – monitoring precision machinery or interacting with customers. You can’t do that very well when you’re high, and firms have zero-tolerance drug policies, for good reason.
Yellow line is job openings. Source: Calculated Risk, BLS
The latest employment report shows our economy continues to create jobs faster than people are entering the labor force. Unemployment is going down and wages are going up. The Fed is gradually raising interest rates. Companies are expanding, but job openings are going unfilled. The workers needed to fill them are staying home, stoned, watching TV.
Douglas R. Tengdin, CFA