The most compelling case for the strength of the American labor market is that U.S. workers are quitting their jobs at a higher rate today than at any point since the months before the dot-com bust. That an increasingly large share of the workforce is voluntarily leaving their jobs reflects the collective understanding on the part of American workers that their skills are in demand. Combined with a 3.9% unemployment rate, one can make a strong case the job market right now is hot.
But anytime we talk of a single labor market we are presenting a distorted picture of reality. In fact, there are always dozens of different labor markets operating throughout the economy, and often it’s not possible for workers to switch between them. And while for most of us the job market is hot, there is a large and growing segment for whom it’s never been worse.
The segment I am referring to are the millions of American men, between the ages of 25 and 54 who have left the workforce, or who have never joined the workforce at all, over the past generation. Nicholas Eberstadt has called this decline in participation in the labor force among working-age men “a quiet catastrophe,” estimating that “America is now home to an ever-growing army of jobless men no longer even looking for work – over 7 million between ages 25 and 55, the traditional prime of working life.”
And unlike many of the ominous winds buffeting the economies of the wealthy world, the shrinking of the prime-age American man’s importance to the economy is a trend somewhat unique to the United States. The only country to shed a higher share of prime-age, male workers is Italy—an economic basket case if there ever was one. Economists have been puzzling over the exact reason for this detachment of so many young men from the workforce, and have come up with varying explanations, from high levels of incarceration to opioids, to the effects of offshoring and automation.
Whatever the reasons for the trend, it does serious damage to the popular argument that what ails the U.S. economy is today is not enough technological change, evidenced by a decades-long decline in productivity growth. While it may be true that the application of new technologies to business is occurring at a slower pace today than it was in generations past, it can also be the case that the cumulative effect of decades of technological change and change to trade flows has helped create a situation where so many American men are no longer gainfully employed.
Economist John Maynard Keynes famously predicted in his essay “The Economic Possibilities of our Grandchildren” that the economy of 2028 would be so wealthy that most people would support themselves working just three hours per day. He made this prediction despite evidence from his own time that human nature would prevent the rational distribution and disposition of this wealth. “There is no country and no people, I think, who can look forward to the age of leisure and of abundance without a dread,” Keynes wrote, arguing that the example wealthy people from his own day provided was “very depressing.” Nevertheless, Keynes wrote, “I feel sure that with a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it today, and will map out for ourselves a plan of life quite otherwise than theirs.” Just ten years removed from Keynes imagined future, we see that his optimism was unwarranted. Instead of devoting most of their waking hours to productive leisure, workers in today’s economy are spending more hours than ever before on the job at the same time that a smaller and smaller share of the population is working at all.
This unequal distribution of work is just another in a series of economic inequalities that threaten social cohesion in America. For it’s not as if these men who have left the labor force are happy about it. They attribute their inability to work largely to physical or mental disabilities, and they report being less happy and socially connected than their peers. You don’t have to be more than a casual student of history to worry about the appearance of a group of 7 million idle and unhappy on the fringes of the American economy and society.
The American labor market is objectively strong, insofar as it’s useful to analyze a single labor market. But a few years of full employment is no reason to set aside concerns about the long-term evolution of an economy which appears oriented toward providing fewer opportunities to a shrinking population of the overworked, who will take home a larger share of the wealth, while, understandably, feeling entitled to it.
Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.