Meet the Unemployable Man

by David Wessel
Saturday, May 1, 2010

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The betting is that the Labor Department's Friday snapshot of the job market will show that employers added workers in April, perhaps even that the unemployment rate fell.

That would be good news, but not good enough. It's hard to exaggerate how bad the job market is. Here's one arresting fact: One of every five men 25 to 54 isn't working.

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Even more alarming, the jobs that many of these men, or those like them, once had in construction, factories and offices aren't coming back. "A good guess…is that when the economy recovers five years from now, one in six men who are 25 to 54 will not be working," Lawrence Summers, the president's economic adviser, said the other day.

This is not one of the many things that can be blamed on subprime lending, inept regulators or Goldman Sachs. "The Great Recession has reinforced prevailing labor market trends that were under way long before the recession," David Autor, a Massachusetts Institute of Technology economist, observed in a recent paper commissioned by two Democratic-leaning think tanks, the Center for American Progress and the Hamilton Project.

Demand for workers who haven't much education -- which includes many men, particularly minority-group men -- is waning. A shrinking fraction of them are working. Some are looking for work; some have given up. Some are collecting disability benefits or an early-retirement pension. Some are just idle. On average, surveys find, the unemployed in the U.S. spend 40 minutes a day looking for work and 3 hours and 20 minutes a day watching TV.

For 50 years, the fraction of men with jobs in what once were prime earning years has been trending down. Over the same decades, the share of women who work has been rising, a significant social change that lately has cushioned the blow of Dad's unemployment for many couples.

Women have suffered less in this recession. They were more likely to be in health care and other jobs that weren't hit as hard as construction and manufacturing. They are increasingly likely to have the education so often required to get or keep a good job these days.

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That's good for their families. But will there be good-paying jobs in the future for prime-age men, particularly the ones who don't go to college?

Americans have worried for decades that the economy won't produce enough jobs. But the economy always provided. As farm jobs were eliminated by mechanization, factories hired more. As factories increased productivity and moved work offshore, more Americans got jobs in health care and other services. And the economists said to all those who had been worried about perennial, persistent unemployment: We told you so!

Yet nothing in the textbooks says that the supply and demand for workers will intersect at a wage that is socially acceptable. At the high end, demand for skilled workers and those who rely on their brains will return when the economy does. At the other end, jobs in restaurants, nursing homes and health clubs -- the jobs that are hard to automate or outsource -- will come back, too.

In the middle, there will be some jobs for workers without much education, for the plumbers, electricians and software technicians. But not enough to go around.

Men who in an earlier era would have been making good money on the assembly line are, and will be, working security or greeting at Wal-Mart, jobs that almost anyone can do and thus jobs that don't pay well.

If they're working at all. Today, 6.5 million workers have been out of work for six months or more, and that includes only those who are still looking for work. History suggests the longer they're unemployed, the less likely they are ever to work again. Faster economic growth would help a lot, but won't suffice.

One way to resist these market forces is to reduce the supply of workers who aren't in demand and increase the supply of workers who are. That is, educate more and better: Fix K-12 schools, improve worker-training programs, strengthen community colleges, give more aid to college students. All this is wise, but most of it will take a long time.

Another option is on the demand side: Force employers to be less efficient so they have to hire more, or limit imports of goods that threaten jobs of less educated, prime-wage men -- solutions with unwelcome side effects.

The government, Mr. Summers said, can increase demand for labor in the short run. Spending more public money on infrastructure, he argued, will both strengthen the economy for the future and employ out-of-work construction workers.

A third option is surrender to market forces and tax the winners to subsidize the losers. Sending checks to idle men is unappealing, but the government could do more to supplement wages (or health insurance costs) for those who work at low wages.

Each approach has shortcomings. So does doing nothing. Sidelining a huge part of an entire generation of men would waste human potential, create economic misery for their families and fuel political discontent.

http://finance.yahoo.com/career-work/article/109471/meet-the-unemployable-man?mod=career-work