14 Dec 2017

Is the Male Labor Force Half Working or Half Unemployed?

Economics 16 Comments

(That’s an optimist vs. pessimist joke.)

In the comments of this previous post, several of you were encouraging me to set aside issues about an aging population and women entering the work force, by looking at prime-age working males. OK I’m happy to do that:

So, we can say that 7 years after bottoming out, the percentage of prime-age males who hold a job is just about where it was in at the depths of the awful recession in the early 1980s, which at the time was the worst economy since the Great Depression.

And this somehow proves that I was grasping at straws, and Krugman is correct in saying we’re pretty much back at full employment?

16 Responses to “Is the Male Labor Force Half Working or Half Unemployed?”

  1. Dan says:

    Whoa, nearly 15% of males 25-54 are unemployed? What a crazy stat.

    • Tel says:

      Ha ha, you missed the trick. You think “unemployed” is the same meaning as a person who is not “employed”. No, my friend, it doesn’t work like that.

      In order to be “unemployed” you need to be actively looking for work, and ready to work. If you give up, get sick, get disabled, or get an opioid addiction then, ta da! We don’t count such people on the unemployment stats.

      • Dan says:

        What’s funny is I almost made another comment mocking that distinction but got distracted and went about doing something else.

  2. Transformer says:

    While that is indeed an astonishing chart I’m not sure that it is necessarily relevent to the full employment question.

    If people are opting out of the labor force because of better benefits for the non-working, unemployability because of criminal background checks, or just because working has become much more unpleasant over the past 35 years then 85% could well be the new “full emplyment” couldn’t it ?

  3. Kevin Erdmann says:

    This is why you have to look at 35-44 year old males. “Prime age” is not a homogeneous group. The 45-54 group has somewhat lower participation, and it is slightly overpopulated right now because it is the tail end of the baby boomer bulge.

    • Bob Murphy says:

      To be super safe shouldn’t we just look at 39 year olds named Jim? Otherwise we might think the economy is in bad shape.

    • Bob Murphy says:

      Kevin Erdmann: I can’t find that particular component in the FRED database. Can you find a chart of it?

      • Capt. J Parker says:

        Here’s some data in Figure 10. https://www.bls.gov/opub/mlr/2016/article/labor-force-participation-what-has-happened-since-the-peak.htm
        I don’t think the 35 to 44 yo cohort is all that much different in terms of basis point decline per year than the whole 25 to 54 yo cohort. Of course figure 10 from the above link is annual data so the dips during recessions get smoothed some. Fact remains though that
        participation in the labor market by a group with the historically highest participation rate has been in steady decline for 60 years.

        • Kevin Erdmann says:

          Yeah. That’s my point. When you remove the one time increase in female participation, these are trends that are strikingly stationary for a long time.

          • Bob Murphy says:

            Kevin wrote: “Yeah. That’s my point.”

            Maybe we’re all getting mixed up with the various claims, but no, that doesn’t make sense Kevin.

            In the earlier post, Capt Parker told me to look at 25-54 year old male employment, which I did (here) and I did a victory lap.

            Then in the comments here, you said “No you shouldn’t look at 25-54 year old men, you should look at 35-44 year old men because that excludes the boomer distortion” (words to that effect).

            Then Capt Parker said “Nah the trend for 25-54 year old men is about the same as for 35-44 year old men.”

            Then you said “Yeah that’s my point, we need to exclude females.”

            Do you see why this makes no sense?

            • Kevin Erdmann says:

              Sorry. I was unclear. The thing I was agreeing with was the last comment about the 60 year linear downtrend.

  4. Capt. J Parker says:

    Yup. I’m saying that we are pretty close to full employment. Labor markets evolve – it’s what they do. Full employment in 1979 is different than full employment in 2017. If you look at page 7 of this: https://obamawhitehouse.archives.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf.

    and use a similar argument to yours, Dr. Murphy, you could make a case that the last time we saw full employment was 1954.

    Are we better off now than 1954? If so why wouldn’t that mean some people can retire earlier and others can spend most of their 20s getting advanced degrees?

    • Bob Murphy says:

      Capt Parker I appreciate your perspective on all of these posts. I think perhaps we are getting too hung up on the meaning of “full employment” when really I am trying to argue that the people looking at the unemployment rate and saying, “All right, the labor market has finally recovered from the 2008 crisis” are wrong. If you want to say we can have “full employment” even though the labor market is still messed up from what happened in 2008 onward, OK that’s fine.

      But, it sounds like you are saying for all we know, the underlying changes reflect good trends, and then I am definitely disagreeing with you.

  5. Andrew_FL says:

    Bob-I think you may have more of a point here than your critics suppose. Look what happens when you draw a trend line from peak to peak on your graph.

    It looks like there’s still a little bit to go before we’re back up to full employment if we interpret the data this way. It’s not much but it’s not nothing.

    • Bob Murphy says:

      Andrew_FL wrote: “Bob-I think you may have more of a point here than your critics suppose.”

      Me too!

      More generally, I don’t understand why we assume it’s normal for the percentage of people working to decline. I don’t think it’s (all) because we’re richer and enjoying more leisure. Especially when you break out the decline by education levels.

      • Andrew_FL says:

        I think we’d agree that in a laissez faire world, we could presume any shortening of the average span of working life (more time in education at the young end, earlier retirement at the old end) was due to wealthier people able to increase their consumption of leisure time. The issue is presumably whether the trend we are seeing isn’t altered by policies that discourage employment or encourage alternative uses of time.

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