Why 3.5 million Americans in their prime years aren’t working

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Why 3.5 million Americans in their prime years aren’t working — and no, it’s not video games

By Jeffry Bartash

Free trade, more robots, disability benefits some of the causes

Luke Sharett/Bloomberg
Millions of Americans who would have been working 20 years ago no longer do so because of vast changes in the U.S. and global economies.

The sizzling U.S. labor market has knocked the unemployment rate down to a 17-year low, but millions of Americans in their prime who would have been working back then do not have jobs now.

How come? China, robots, disability benefits, minimum wages and jail-time are the biggest culprits, according to a pair of researchers at the University of Maryland.

The percentage of the U.S. population with jobs sank from a record 64.7% in 2000 to a 28-year low of 58.2% by 2011 before beginning a gradual recovery. The brunt of the decline occurred during the 2007-2009 recession, but the problem had been long in the making.

“These worrisome developments were exacerbated by the Great Recession, but their roots preceded its onset,” wrote economists Katharine Abraham and Melissa Kearney at the University of Maryland in a new report distributed by the National Bureau of Economic Research. Abraham is a former commissioner of the Bureau of Labor Statistics.

The problem is still acute among young people and even Americans in their prime working years of 25 to 54, especially men.

Surprisingly it’s not the case for older people nearing retirement age. The share of those ages 55 to 64 actually rose until just very recently.

Whatever the case, the impact on the economy is profound.

If men and women from the ages 25 to 54 took part in the labor market at the same rates as they did in 1999, another 3.5 million Americans could either be at work today or looking for jobs. That would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor.

The China trade

What caused these people to leave the labor force — or not even enter?

Not surprisingly the acceleration in global trade, punctuated by the emergence of China, had the biggest impact, the researchers found.

Millions of jobs that used to be performed by working-class Americans shifted overseas or disappeared after the turn of the century. Manufacturing was particularly hard hit — more than 5 million jobs were lost from 1999 to 2016.

Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift operations overseas and put downward pressure on wages of less-skilled Americans.

The rise of robots appears to be another critical factor even though the effects of automation are harder to determine, the report said. Think of how many bank jobs have been lost due to ATMs and online banking, for example.

A smaller but not insignificant factor is an increase in federal disability benefits. The percentage of men ages 25-54 on disability insurance rose by a third since the mid-1980s. Many used to work in manufacturing.

The disability program plays “an increasingly important role in providing income for less educated workers negatively impacted by” trade, automation and the like, the authors said. A “sizable” number of those approved for disability benefits would have worked if there applications were turned down.

Higher minimum wages are probably another cause.

After declining in inflation-adjusted terms from 1998 to 2007, minimum wages rose almost 11% in real terms between 2007 and 2016, Abraham and Kearney estimated. Firms may have outsourced jobs or spent more on automation to offset the higher costs of low-skilled labor.

A greater percentage of men serving time in jail, especially African Americans, had a similar impact as higher minimum wages. Even though crime rates fell, tighter sentencing laws resulted in more people going to prison.

The ill effects of a prison sentence also last well beyond time served. Companies are reluctant or unwilling to hire those with criminal records unless they have no choice.

Video games not to blame

The authors found little evidence to support other popular theories.

The share of unemployed men with working wives has actually fallen, for instance.The authors also could not find evidence that declining labor-force participation is tied to opioid addiction or more young men playing video games in their parents’ basements. Nor is lack of child care or more people getting food stamps to blame.

It’s possible these explanations played a role, but more research is needed, Abraham and Kearney said.


失業率創新低 全美350萬青壯卻沒工作

(World Journal) 記者顏伶如/綜合報導
美國就業市場蓬勃興隆之際,正值人生尖峰時期的數百萬美國人卻沒有工作。(Getty Images)美國就業市場蓬勃興隆之際,正值人生尖峰時期的數百萬美國人卻沒有工作。(Getty Images)



馬里蘭大學研究人員凱薩琳.亞柏拉罕(Katharine Abraham)、梅莉莎.卡爾尼(Melissa Kearney)的最新研究報告指出,若以年齡族群來區分,年輕人以及正值壯年的美國人,也就是25歲至54歲之間的民眾,面臨最嚴重的就業問題,男性又比女性更加嚴重。





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