Labor participation rate and the future

[rogpodge]

https://www.msn.com/en-us/money/general/job-seekers-giving-up-labor-force-participation-rate-falls-to-lowest-in-50-years-outside-of-covid-era/ar-AA2750kA

Labor force participation, especially among prime earning 18-54 year olds, remains low relative to historic levels. I suspect the rates among some of the younger cohorts may be shockingly low.

An interesting theory here:

https://thehill.com/opinion/congress-blog/labor/5972127-crisis-american-men-employment/

[Mick]

I think there is a perfect storm of social trends leading to males withdrawing from the labor force.

1. The problem is less “no jobs exist” than “the available job no longer clears the man’s reservation threshold”
2. Recessions “scar” men—and some never fully return
3. Poor health is both a cause and a consequence of nonparticipation
4. America eliminated a great many jobs that once converted average male physical ability into middle-class status
5. Society has been on a very successful drive to push, promote and drive the success of women at the expense of men. It’s a zero-sum game.
6. The education system is increasingly poorly aligned with boys and with noncollege male employment
7. Criminal records and incarceration create a long employment shadow
8. Marriage and work once reinforced one another; both feedback mechanisms have weakened
9. Modern life has made withdrawal more survivable—and less visibly miserable.
10. Men may be particularly vulnerable to losing institutions that confer role and status

[rogpodge]

https://x.com/i/status/2085932973480620112

I would be interested in Mike Rowe’s take on this.

[rogpodge]

https://x.com/Kazanjy/status/2090087364186239278

I agree with this. Increases G component of GDP. Can’t cut it (“you’re literally targeting seniors and the terminally ill”) and there’s little accountability for services delivered or time spent.

[Mick]

GDP  = G + C + B + E/I.

Gross Domestic Product is equal to government expenditures plus consumer expenditures plus business expenditures plus the net of exports – imports, which has been a negative since 1975.

Businesses have been doing more with less for decades. Consumer spending and debt are tapped. That leaves government expenditures.

Incidentally, between 2019 and 2023 (the last time you could really do an apples to apples comparison), both California and Texas received more fed money than they paid in federal income taxes. In the last year before COVID, Texas was in a very slight deficit, California was in a very slight surplus. But during COVID (2020 and 2021), both states ran giant deficits, which narrowed again in 2022 and 2023.

[Mick]

I learned a new term today “Functional Unemployment Rate.” It is also known as the “True Unemployment Rate.” It combines the traditional unemployment rate (quite low right now, dropping last month to 4.1% from 4.2%), with the part-time employment rate (but among people seeking full-time employment), with those earning a poverty wage (wage below the poverty level).

This measure, developed by the Ludwig Institute for Shared Economic Prosperity, had its fourth consecutive increase in July, now at 24.9% overall.

Even more interesting to me is that their measure of the working-age population NOT functionally employed (including those who have dropped out of the labor force) hit 53.8%, up 0.8% since January.

For black workers, the functional unemployment rate is 27.3%. For Hispanic workers, it is 26.7%.

For men, the rate dropped 0.9% to 19.5%; but for women, it jumped 1.6% to 31%, marking the highest level women have seen since March, 2021.

LISER states that the AI boom has sparked a massive demand for construction workers, extraction workers, and other workers in skilled trades. Secondly, there’s been a crisis in family care service and AI is causing companies to reduce white collar employment, so women are pulling out of the labor market.

[Author]

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