country. Yet we rarely hear about the collapse, over two generations, in work for American men in the traditional prime of their working life.

America’s “Unworking” Men – A Trend Long in the Making

The first thing we have to recognize in order to understand this crisis is that it has been a long time in the making. Over the past 50 years, the share of American men age 20 and older without paid work has risen from 19% to 32%. Over the same period, the unemployment rate for working-age (25-54) men jumped from 6% to 16% according to Fed data.

Working-Age Men

Working-Age Men

Most surprisingly, the bulk of the postwar surge in dropouts involved voluntary departure from the labor force as opposed to termination. Mr. Eberstadt explains it this way:

“Until roughly the outbreak of World War II, working-age American men fell into basically two categories: either holding a paid job or unemployed. There was no ‘third way’ for able-bodied males. Today there is one: neither working nor seeking work—that is, men who are outside the labor force altogether.

Unlike in the past, the U.S. is now evidently rich enough to carry them, after a fashion. The no-work life hardly consigns these men to destitution. This is at least somewhat true throughout the affluent West, but the U.S. has led the pack.

Not even in dysfunctional Greece or ‘lost generation’ Japan has the male flight from work proceeded with such alacrity. The paradox is that Americans — those who do have jobs — are still among the rich world’s hardest-working people. No other developed society puts in such long hours, and at the same time supports such a large share of younger men neither holding jobs nor seeking them.

Who are America’s new cadre of prime-age male unworkers? They tend to be: 1) less educated; 2) never married; 3) native born; and 4) African-American. But those categories intersect in interesting ways. Black married men are more likely to be in the workforce than unmarried whites. Immigrants are more likely to be working or job-hunting than native-born Americans, regardless of ethnicity. [Emphasis added.]

What do unworking men do with their free time? Sadly, not much that’s constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: ‘neither employed nor in education or training.’

Time-use surveys suggest they are almost entirely idle—helping out around the house less than unemployed men; caring for others less than employed women; volunteering and engaging in religious activities less than working men and women or unemployed men. For the NEETs, ‘socializing, relaxing and leisure’ is a full-time occupation, accounting for 3,000 hours a year, much of this time in front of television or computer screens.”

America’s Idle Army: How Has This Happened to US Males?

Clearly big changes in the US economy, including the decline of manufacturing and two severe recessions since 2000, have played a role in the dropout rate in this century. But something else is at work, too: the male flight from work has been increasing over the past two generations, irrespective of economic conditions or recessions, according to Eberstadt.

Another factor has been the explosion in our prison population over the years. Yet it is important to understand that the apprx. 1.4 million working-age males who are incarcerated are NOT counted as unemployed.

It is a fact that there are many barriers to work for America’s many male ex-prisoners and felons not currently behind bars. Eberstadt and others estimate that male ex-prisoners account for one out of eight adult males in the working-age population. In many states, these men (and women) are legally barred from a significant number of jobs.

Conclusions From Eberstadt’s Book Men Without Work

“What we might call ‘sociological’ factors are evident, not least the tremendous rise in unworking men who draw from government disability and means-tested benefit programs. There are also the barriers to work for America’s huge pool of male ex-prisoners and felons not behind bars. Regardless of its cause, this new normal is a threat to America’s national interests.

Declining labor-force participation and falling work rates have contributed to slower economic growth and widening gaps in income and wealth. Slower growth in turn reduces tax revenue and increases budgetary pressures, producing higher deficits and national debt. Unworking men have increased poverty in the US, not least among the great many children whose fathers are without jobs.

There are the social effects, too. The male retreat from the labor force has exacerbated family breakdown, promoted welfare dependence and recast ‘disability’ into a viable alternative lifestyle. Among these men the death of work seems to mean also the death of civic engagement, community participation and voluntary association.

In short, the American male’s postwar flight from work is a grave social ill. Strangely, nearly everyone—the news media, major political parties, intellectuals, business leaders, policy makers—has managed to overlook it. The urgency of the moment is to bring this invisible crisis out of the shadows.

Imagine how different America would be today if another roughly 10 million men held paying jobs. It is imperative for the future health of the country to make a determined and sustained effort to bring these detached men back into the workplace, into their families, into civil society.”

The bottom line: We’re becoming more and more like Europe where able-bodied men just stop working. I’ll have more to say on this serious problem in the weeks and months ahead.

Alpha Advantage Strategy & Upcoming Webinar

2016 has been a pretty chaotic year for stocks, and with a Fed rate hike looming, this could continue through the rest of the year and into 2017. In addition, we are past due for a significant market correction. Remember, the last one was late 2007 to early 2009 when the S&P 500 plunged 50%. As a result, now may be a good time to consider Halbert Wealth Management’s Alpha Advantage Strategy.

The beauty of Alpha Advantage is that it can make money whether the markets go up or down. Alpha is either in cash, 2X long or 2X short. So no matter what happens going forward, you have the potential to make money, even if the markets tank. While there are no guarantees that their signals will always be correct, their past track record, which you can see here, is very impressive.

On September 15th at noon (CST) we will be featuring a live webinar with Paul Montgomery to discuss how the Alpha Advantage Strategy works and give you an opportunity to ask any questions you have.

Register for the Alpha Advantage webinar.

I definitely think you should give Alpha Advantage a serious look, especially if you are searching for a program that can do well no matter whether the markets are going up or down. The minimum investment is only $50,000 and all accounts are held at Guggenheim. Sign up for the webinar to learn more or call us at 800-348-3601.

Wishing you a great end of summer,

Gary D. Halbert


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