Why are middle-aged men absent from the labor market?

Why are middle-aged men absent from the labor market?

Paul Rizzo with his wife Tiffany and their sons Chase and Ryder outside their home in Kenner, Louisiana on Nov. 28, 2022. (Emily Kask/The New York Times)

Paul Rizzo with his wife Tiffany and their sons Chase and Ryder outside their home in Kenner, Louisiana on Nov. 28, 2022. (Emily Kask/The New York Times)

For the past five months, Paul Rizzo, 38, has been delivering food and groceries through the DoorDash app. But he spent the first half of 2022 earning no salary, reflecting a surprising trend among middle-aged men.

After learning last Christmas that his job as an analyst at a hospital company was being automated, Rizzo opted to stay home to care for his two young sons. His wife wanted to get back to work, and he was discouraged in his own career after more than a decade of corporate tumult and repeated disappointments. He thought he might be able to earn enough income on his investments to be financially successful.

Rizzo’s decision to retire from employment during his early working years hints at one of the biggest surprises in today’s job market: Hundreds of thousands of men in their late thirties and early quarantine stopped working during the pandemic and have lingered on the fringes of the labor market ever since. While Rizzo has recently started making money again, many men his age seem to stay out of the job market altogether. This is an anomaly, as employment rates rebounded more for women of the same age and for younger and older men.

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About 89.7% of men aged 35 to 44 were working or looking for work in November, compared to 90.9% before the pandemic. The group’s employment rate showed signs of rebounding last month, but has been unusually depressed on average over the past year.

The decline in labor force participation among middle-aged men extended across racial groups, but was most heavily concentrated among men who, like Rizzo, lack a four-year college degree. The setback comes despite rising wages and plentiful job openings, including in fields like truck driving and construction, where college degrees aren’t required and where men tend to dominate .

Economists have not identified any factors that prevent men from returning to work. Instead, they attribute the trend to a cocktail of shifting social norms around parenthood and marriage, shifting opportunities and lingering scars from the 2008-09 recession – which cost many people in this area jobs. age group when they started their career.

“Now all of a sudden you’re taking your life back, and if you’re in the wrong industry…” Rizzo said, pausing as he spoke about his recent experience in the market. work. “I wasn’t the only one who gave up. I can tell you that.”

Men have been withdrawing from the labor market for decades. In the years after World War II, more than 97% of men in their prime working years — defined by economists as ages 25 to 54 — were working or actively looking for work, according to federal data. But from the 1960s, that share began to decline, reflecting the decline of domestic manufacturing jobs.

What’s new is that a small demographic – men who were early in their careers during the 2008 recession – appear to be hardest hit.

“I think there are a lot of very discouraged people out there,” said Jane Oates, a former Labor Department official who now runs WorkingNation, a nonprofit focused on workforce development.

Men lost jobs in astonishing numbers during the 2008 financial crisis as the construction and homebuilding industries contracted. It took years to regain this ground; for men who were then in their 20s and early 30s and just starting their careers, employment rates never fully recovered.

Economists have offered a range of explanations for the slow return of men to the labor market. After the war on crime of the 1980s and 1990s, more men had criminal records that made it difficult to get a job. The rise of opiate addiction had driven others away. Video games had improved in quality, so staying at home might have become more appealing. And the decline of nuclear family units may have diminished the traditional male role as economic provider.

Today, recent history seems to be repeating itself, but for a specific age group. The question is why men aged 35 to 44 seem to remain unemployed and looking for work more than other demographic groups.

Patricia Blumenauer, vice president of data and operations at Philadelphia Works, a workforce development agency, said she’s seen a drop in the number of men in this age bracket coming for jobs. services. A disproportionately high share of those who arrive leave without taking up work.

Blumenauer said the age bracket is a group “that we don’t see emerging.” She thinks some men who lost their blue-collar jobs at the start of the pandemic might be looking for something with flexibility and higher pay. “The ability to work from home three days a week or have a four-day weekend – things other jobs have figured out – is not possible for these types of occupations.”

When men don’t find these jobs flexible or can’t compete for them, they may choose to make ends meet by staying with relatives or doing moonlighting, Blumenauer said.

The pandemic has also likely slowed America’s already weak family formation, making single or childless men less likely to settle into stable jobs, economist Ariel Binder said. On the other hand, disruptions to schooling and childcare mean that some men who already had families may have moved out of paid work to take on more household chores.

“So on the one hand you have these men who just don’t expect to be in a stable romantic relationship for most of their lives and set their schedules accordingly,” Binder said. “Then there are men who participate in these family structures, but do so in non-traditional ways.”

Like labor experts, government data suggests that a combination of forces is at play.

A growing number of men appear to be taking on more childcare duties, as suggested by time use and other survey data. But a shift to stay-at-home dads is unlikely to be the full story; employment trends are the same for men in the age group who report having young children with them and for those who do not.

What clearly matters is education. The drop in participation is more strongly concentrated among people who have not obtained a university degree, according to detailed data from government surveys.

Some economists believe the disproportionate drop could be because the age group has been rocked by repeated crises, which is weakening their footing in the labor market. They lost their jobs early in their careers in 2008, faced a slow recovery thereafter and found their jobs threatened again amid 2020 layoffs and a continued shift towards automation.

“This group has been hit by automation, by globalization,” said David Dorn, a Swiss economist who studies labor markets.

This fragility theory makes sense to Rizzo.

He had seen the Navy as his ticket out of poverty in Louisiana and expected to have a career in the service until he broke his back during basic training. He retired from the army after a few years. Then he pivoted, earning a two-year degree in Georgia and starting a bachelor’s degree at Arizona State University — with dreams of one day working to cure cancer.

Then the Great Recession hit. Rizzo had worked nights at a lab to pay rent and tuition, but the job ended abruptly in 2009. Phoenix was ground zero for the fallout from the financial implosion.

Frantic job applications came to nothing and Rizzo had to drop out of school. Worse still, he found himself staring at impending homelessness. His tax refund saved him by allowing him and his wife to return to Louisiana, where there were more jobs. But after their divorce, it hit a low point.

“I had nothing to show for my life after I turned 20,” he explained.

Rizzo spent the next decade rebuilding. He held various positions in the company where he taught himself the skills of Excel and Microsoft SharePoint, remarried, had two sons and bought a house.

Yet he was routinely at risk of losing work due to downsizing or technology, including at the end of last year. The company he worked for wanted him in a new position, possibly as a traveling salesman, when his desk job disappeared. But her sons have special needs, and that wasn’t an option.

He resigned in January. He watched the kids, posted on his investing-related YouTube channel, and watched Netflix. He thought he might be able to live off military payouts and dividend income, part of the “Financial Independence, Retire Early” or FIRE trend. But then the Federal Reserve raised interest rates and the markets swirled.

“I have FIRE, okay,” he said. “My whole wallet was set on fire.”

Rizzo turned to DoorDash, earning his first paycheck on July 4. Although he’s technically back in the workforce, gig work like his isn’t well measured in employment data. If many men take a similar path but don’t work every week, they could be overlooked in surveys, which ask if someone worked for pay the previous week to determine whether they were employed.

Rizzo is waiting to see what happens to its DoorDash revenue during an economic downturn before it rules out corporate work forever. Already, other shooters are complaining that business is slowing as people have spent their pandemic savings.

The veteran considers himself lucky. He knows men of his generation who have struggled to find a place in the job market.

“It’s like it’s the sequels of 2008 and 2009,” he said. “Everyone had to start their lives over from scratch.”

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