05 January 2016

The New American Work Force

[I]n 1954, about 96 percent of American men between the ages of 25 and 54 worked. Today that number is around 80 percent. One-fifth of all men in their prime working ages are not getting up and going to work. According to figures from the Organization for Economic Cooperation and Development, the United States has a smaller share of prime age men in the work force than any other G-7 nation. The number of Americans on the permanent disability rolls, meanwhile, has steadily increased. Ten years ago, 5 million Americans collected a federal disability benefit. Now 8.2 million do.…There are probably more idle men now than at any time since the Great Depression, and this time the problem is mostly structural, not cyclical.
From Tyler Cohen at the Marginal Revolution citing David Brooks at the New York Times.

In parallel with the shift Cohen notes, the percentage of adult women in the work force has almost doubled from about 32% to about 65%.  About one in five American women will never have children, and the vast majority of those who do have children will also work for many years while they have children, sometimes even when the children are infants.  Also, both men and women are entering the work force later because they are more likely to finish high school and attend college, and a much larger number of working age adults are incarcerated now than were in 1954.

Finally, of course, unemployment rates are just under the double digits as we creep out of the recession caused by the financial crisis, and men have taken more of a hit in the current recession than women.  In contrast, 1954 was a point of relatively low unemployment, driven by a manufacturing economy that was serving a world market whose own capacity had not yet recovered from the capital destruction of World War II and the millions of men permanently removed from the work force by that war. The high unemployment rates we are seeing today are present at every level of education.

I'm not ready to jump to the "loser men" interpretation  that Cohen, citing David Brooks, does.  An increased number of permanent disability claims is to be expected as a generation of blue collar baby boomers ages.  Total labor force participation relative to the working aged population as a whole is at all time highs, unrivaled anywhere else in the world, and Americans work longer hours that workers in any other country.

The working aged men who are withdrawing from the labor force, in addition to growing ranks of graduate students and inmates and disabled blue collar workers, are mostly early retirees who have played by the rules, worked hard, saved money, raised children, sent them to college and are retiring early because they are prosperous, not because they are lazy.  Many young retirees use their years of early retirement to give back to the community and their families, contributions that were often slighted during the hectic years when they built up their nest eggs.  Early retirement is the American answer to the fact that we have so much less work-life balance, longer work weeks, and less vacation time than our developed world counterparts.  For my druthers, I'd prefer an economy where the average American works fewer hours per year, unemployment is lower, early retirement is rare because most people love their jobs, and men and women balance work and family in more similar ways to each other than we do today.  But, until we reach that day, I am not going to grudge the time that working age men who toiled intensely for a few decades and accrued a nest eggs take to retire early and smell the roses.

My father was anything but an early retiree, but what he spends his time doing in retirement is typical of retirees in reasonably good health of all ages.  He visits grandchildren and stepgrandchildren.  He helps an urban Cincinnati church reimagine itself and develop a plan for raising funds and turning itself around.  He directs a youth choir, commissioned the composition of one hymn and wrote another hymn himself.  He is civically active, writing letters to the editor and op-ed columns relevant to his professional experience.  He participates in a gourmet group and a community choir.  He keeps his home in good repair.  He keeps a watchful eye on the good health and well being of his neighbors and the neighborhood's esprit de corps.  He takes steps to move forward efforts to convert smelly feedlot manure into a renewable energy source.  He set up a volunteer training program for people in his small town and established a lecture series in his old department.  He stays connected to the people he has spent a lifetime building ties to across the nation and the world.  Of necessity, he spends a lot more time than he once did tending to his own good health, and as a consequence of his age, spends more time reading obituaries and attending funerals than he once did.  He spends more time on vacation travel than he once did, but no more than a typical French or German bureaucrat in the prime of his career does.  Just as we strive to find meaningful work in our lives working for pay, and some of us achieve that, we strive to find meaningful leisure in our lives when we are not working for pay and some of us achieve that as well.

What my father does in his retirement is not the same as work, admittedly.  He no longer has to fight pitched bureaucratic battles with the university facilities department over furniture acquisitions for his department.  He longer spends hours grading papers from students in his classes.  He no longer bears primary responsibility for finding internship opportunities for three dozen graduate students a year.  He doesn't have to deal with office politics or admissions decisions.  His days of pouring over long technical reports and attending endless meetings while serving as an advisor to a federal nuclear waste disposal project have come to an end.  But, like most retirees, early and late, he is not an "idle man."  The kind of person who works hard enough to retire early, even more so than the usual retiree, usually is constitutionally incapable of being idle even if they tried.  Early retirement may leave our nation with more really good golfers than we really need, but if one takes it as a given that economic production is a means to an end, rather than an end in and of itself, something economists sometimes forget, this shouldn't be terribly troubling.

One can argue that an economic system that compensates some of our most skilled physicians, executives, lawyers and engineers so well that a large fraction of them withdraw their valuable skills from the monetary economy early is out of kilter.  Surely, my inlaws, who are both medical doctors and both retired early, would have probably done so a little bit later if medical doctors were paid less than they are in our economy and they needs to work longer to be economically self-sufficient.  In that world, they would have spend a few more years treating patients and a little less time playing golf in their golden years.

But, I can hardly fault them. They were cogs in the machine and did what made sense at the time.  The way that the profession was designed when they were actively participating in it, medical doctors had to work exceedingly long hours and carry pagers where ever they went missing children's birthday parties and family time after school, foregoing extended vacations, and generally giving extremely intensely of themselves to serve large numbers of people in medical need with cutting edge skills and technology that provided great benefit to those patients.  They didn't have the option of living more balanced lives while they were working, and that system had built into it the incentive of an early retirement as a reward for that very intense work using skills so scarce that the United States established an immigration visa to secure people with these skills that it was unable to produce in sufficient numbers at home.  If the hope of early retirement hadn't been available in the long run, lots of doctors in their generation would probably have decided that their toil simply wasn't worth it and would have deprived the health care system of their skills far sooner.

The economy at large is experiencing basically the opposite of what most of academia is experiencing.  While old academics are lingering in their tenure track positions long past the traditional retirement age, leaving little room for the ranks of new professors seeking to fill their shoes, in hot parts of the private sector, the millionaire entrepreneurs and executives and physicians of the last long economic boom are making way for their ambitious, young, tech savvy successors.

Indeed, one of the many reasons that upper middle class managerial and professional workers experience low rates of structural unemployment than less skilled workers is that upper middle class workers can afford to retire early and free up jobs for younger workers.  In contrast, many blue collar workers often can't hope to save enough too retire early and continue to fill jobs that reduce the opportunities available for their younger successors.  Still, many middle class, as opposed to upper middle class retirees are workers who have been laid off from long, physically demanding careers as soldiers, as cops, as firemen, and factory workers whose unions, aware that large numbers of them would experience permanent disabilities anyway if they didn't retire early, worked with management to desire jobs that allow for early retirement.

Getting up and going to a paying job is something that people do because they need to support themselves and their families, and because the economy needs certain jobs to get done.  There is no shame in working and no one wants to be unable to support themselves.  But, it is a mistake to assume that getting up and going to a paying job has intrinsic moral value.  There is nothing morally wrong with an early retiree in his early 50s lingering over the newspaper while having breakfast, and spending the rest of his day doing what he thinks is the most valuable use of his time when money is not an object.

Economists tend to think that rational actors want nothing more than more money.  But, most people simply want to have enough money to allow them to be secure in their ability to meet their comfortable but modest economic needs.  Once that goal is accomplished, increasingly sooner for much of the nation's upper middle class in this more prosperous age, earning more money becomes a much lower priority goal.  Sometimes these activities will produce money anyway, but money is no longer the point.

I'm sure that a reporter with a little gumption could find men who don't fit the narrative that I've outlined and fall into the stereotype that David Brooks is trying to conjure. 

I know of several men with good educations and/or professional experience in Denver who spent time as homemaker husbands and/or returned to school for more education, when their own careers hit bumps during bad job markets and their wives had jobs.  Yet, isn't this something that the feminist revolution has been bracing us for, and encouraging us to welcome, over the last several decades?  And, at any rate, this remains a statistically minor blip that only accentuates a larger trend of more people seeking graduate educations, blue collar boomers wearing their bodies out, more people spending long years in prison, more people retiring early, and a bad economy driving up unemployment rates.

I'm sure that a not insignificant number of working aged men, particularly men with criminal records or substance abuse problems have simply given up after long, fruitless job hunts, are dependent upon family or friends or lovers, and do little but drink too much and watch television.  In earlier days, when our economy needed lots of unskilled labor for mindless jobs because we hadn't yet mastered automation, people like that would have worked at abundant assembly lines all work and gotten drunk and wasted time after hours and on the weekends.  Now, a lot of that work has been offshored or automated.  There are still unskilled mindless jobs in our economy, but there aren't nearly as many as their used to be, while there are almost as many people chasing after them.

But, for the most part, America's meager safety net doesn't afford men who are not financially secure early retirees the option of leaving the labor force whether they want to or not.  More so than any other developed nation in the world, Americans must work or starve and die.  Leaving the work force is a very expensive luxury purchase for most Americans not to be made lightly, and men and women alike do so in our economy at their peril.

Like any other nation, we have "loser men."  We also have "loser women," "loser children" and "loser seniors."  But, for the most part, those loser men are the men who have no choice but to continue working at unfulfilling, dead end, low paying jobs because they have no other choice and didn't manage to save anything for their futures, not the early retirees who have left the work force entirely.

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