A new Wall Street Journal story on how many men aged 25 to 54 can’t find work, fails to mention but nevertheless shellacks an embarrassing New York Fed paper released earlier this week. The Fed’s propagandists tried to argue that labor markets are tighter than is widely believed. The basis for the authors’ sunny view? Changing demographics. Their proof? An absurd “normalized, demographically adjusted,” seasonally adjusted, business-cycle free employment to population ratio, to wit:
For each of the 10.2 million individuals in our sample, based on their decade of birth, sex, race/ethnicity, and education, we select one of our 280 estimated career employment rate profiles. Using the worker’s age, we calculate the predicted employment rate for that individual based on their selected employment rate profile. We then calculate the weighted average of these predicted employment rates across all individuals in a given time period to generate an estimated E/P ratio for that time period. We repeat this exercise for each time period covered by our data.
Oh, and after that they seasonally adjusted and then “normalized” the data.
They might instead have looked out the window, say at the long lines any time a big employer opens a new facility, or readily-available information like this:
ERE reports that “Although it varies with the company and the job, on average 250 resumes are received for each corporate job opening.” In addition, out of every 1000 people who view an online job posting, 100 people will apply, 4 – 6 will be selected for an interview, 1 – 3 will be invited for a final interview, 1 will be offered the job, and 80% of those who get a job offer accept it.
Admittedly, the Internet makes it vastly easier to apply for jobs than the old-fashioned written submission, but this sort of bid to cover ratio isn’t consistent with a strong employment market.
Now if you had managed to take the New York Fed’s porcine maquillage seriously, you’d also have to believe that employment conditions hadn’t deteriorated within particular demographic groups. The Wall Street Journal shows how the very backbone of the labor market, men in their prime (for measurement purposes, 25 to 54), are out of work to an unprecedented degree. The story is worth reading in full; it has a larger-than usual number of anecdotes, including a 53 year old community college grant writer who was fired as a result of budget cuts, to a 29 year old who was laid off shortly after getting his first job as a public school administrator, to a 52 year old Army staff sergeant who was discharged six months prior to being eligible to receive a full pension as a result of a training injury.
More than one in six men ages 25 to 54, prime working years, don’t have jobs—a total of 10.4 million. Some are looking for jobs; many aren’t. Some had jobs that went overseas or were lost to technology. Some refuse to uproot for work because they are tied down by family needs or tethered to homes worth less than the mortgage. Some rely on government benefits. Others depend on working spouses….
The trend has been building for decades, according to government data. In the early 1970s, just 6% of American men ages 25 to 54 were without jobs. By late 2007, it was 13%. In 2009, during the worst of the recession, nearly 20% didn’t have jobs.
Although the economy is improving and the unemployment rate is falling, 17% of working-age men weren’t working in December. More than two-thirds said they weren’t looking for work, so the government doesn’t label them unemployed….
Economists who had expected the fraction of men working or at least looking for work to be approaching prerecession levels by now are dumbfounded. “It’s looking worse and worse,” said Johns Hopkins University’s Robert Moffett, who has researched the subject. “It’s unexpected.”
The story notes that workforce participation by women in same age group has increased over time, from one third in the 1950, to the roughly 70% level attained in the 1990s that is largely intact today.
One impediment is that the worst-paid jobs are sometimes not worth the all-in costs:
Since the early 1970s, the average inflation-adjusted wage for high-school dropouts has fallen about 25%; for high-school graduates with no college degree, it is down about 15%. Simply put, many of the available jobs don’t pay enough to get men to take them, particularly if securing a job requires moving, long commutes or surrendering government benefits.
By contrast, a couple of the stories feature the cashiered men getting job training in the hope of securing work in a new field. As many NC readers probably know, this sort of rehab effort in most cases is tantamount to a scam. Even when an older worker obtains a meaningful credential, the job market is so slack that most employers can find workers who’ve previously done the same sort of work. And to the extent they are willing to hire someone fresh out of school, most employers prefer younger workers who are perceived to be more malleable and energetic.
Lambert raised a question that the commentariat might be able to help answer: what happens to men in this fix? I told him that he shouldn’t be surprised, there’s money only to research things that show things are really swell, and not ferret out the many manifestations of distress and dislocation.
The article makes clear that at least some of the men are on trajectories that can’t be sustained, borrowing and selling assets yet starting to fall behind on payments. Clearly (again as the article indicates) some wind up living with relatives. And even with budget cuts, we do have enough in the way of social safety nets to forestall the establishment of Obamavilles. But I wonder how many people are living in cars, or couch-surfing (meaning one step away from being homeless), or (as one reader found out over the summer) renting rooms in trailer camps.
The duration and severity of unemployment among men in their peak earning years suggests that there is both more suffering than is readily apparent, and that this group is also likely to wind up impoverished in their old age. These men, with their sense of identity often strongly vested in being producers and breadwinners, face a grim future in psychological as well as financial terms. To put it more bluntly, this level of unemployment is suicide futures.