Less Men Are Working – Labor Demographics

Posted on July 25th, 2016

The Council of Economic Advisors, an agency within the Executive Office of the President, released a report in June identifying the fact that less working age men are working.

The participation rate for men between the ages of 25 and 54 fell more steeply than in all but one country in the Organization for Economic Co-operation and Development (OECD) from 1990-2014, the report found. The U.S. rate is now the third lowest among 34 OECD nations. The participation rate is a measure of how many employable men are willing and able to work, thus participating in the labor force.

The male labor force participation rate peaked at 98% in 1954, and has fallen to 62.6% in May. It is of particular concern since workers at this age are at their most productive age.

Part of the reason behind the fall in demand for lower-skilled labor is the drop in manufacturing jobs, resulting in technological change. High rates of incarceration also have affected lower-skilled men, where 6-7% of the prime-age male population was in prison at some point in their lives. These men are more likely to experience joblessness after they are released from prison and in many states are legally barred from a significant number of jobs.

Nearly 36% of prime-age men not in the labor force lived in poverty in 2014. Education is a critical component in employment, as less-educated Americans have suffered a reduction in their wages relative to other groups. From 1975 until 2014, relative wages for workers with a high school degree fell from 80% of the amount earned by workers with at least a college degree to less than 60%.

The World Bank also tracks the participation rate for men and women worldwide. Its data is similar to that of the administration’s, yet does reveal that women throughout the world are working more. Interestingly enough, the participation rate for women has been steadily increasing versus declining for men worldwide.

Sources: The World Bank, OECD, Council of Economic Advisors