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Why the workforce participation rate is waning

Eberstadt first noted the decline in the number of men with jobs in his 2016 book, Men Without Work — a trend he says was exacerbated during the COVID-19 pandemic. While plenty of workers were laid off or left due to illness, not all of them returned to the labor force — even after job openings picked up.

The Minneapolis Federal Reserve Bank also found that 25% of prime age Americans aren’t currently working — and while some say they’re looking for jobs, but can’t find any, others are actively choosing not to join the job hunt. The report points to reasons like caregiving for an elderly parent or child, health-related concerns, retiring early, going to school or joining the military.

The U.S. Chamber of Commerce surveyed Americans who lost their jobs during the pandemic and about a quarter said federal aid incentivized them to not actively look for work, while about half aren’t willing to take jobs that don’t offer the option of remote work. Over a third of younger respondents said they were focusing on learning new skills and prioritizing their personal growth before re-entering the labor force.

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There’s a growing gender gap

Eberstadt says a vast majority of these prime-age men spend around 2,000 hours a year on screens, do little housework and don’t spend time volunteering. However, there might be more to the story than men simply slacking off and sitting at home.

The decline of men in the workforce may be partially due to the drop in manufacturing jobs since the 1960s, which have either been automated or moved offshore.

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Additionally, research shows that women are more likely to have four-year college degrees compared to men, when postsecondary education typically comes with better employment prospects. Women account for more than half of America’s college educated workforce, according to the Pew Research Center.

College-educated women are now participating in the labor force at the same rate they were before the pandemic, while the share of college-educated men working or actively looking for work has lessened.

Why this is a problem

Rowe calls the decline in male participation in the workforce “the most chilling metric of all” since it’s “an indication of what's to come.”

Reduced labor force participation has already taken its toll on lower-paying industries — the leisure and hospitality sector has seen the highest quit rate since July 2021, and retail isn’t far behind, reports the Chamber of Commerce.

And durable goods manufacturing, wholesale and retail trade and education and health services are contending with a shortage of skilled workers.

This puts more pressure on the remaining employees, who may be dealing with longer hours, tougher responsibilities and burnout.

“Running your workers like this — asking them to do 20%, 30% more because you’re short staffed — it’s very much a short-term strategy. You’re going to keep losing people,” Paige Ouimet, a professor at the University of North Carolina’s Kenan-Flagler Business School, told The Washington Post.

Some employers, like restaurants and airlines, are reportedly offering higher wages, although economists say this could be contributing toward inflation — since higher labor costs can drive up prices.

“The U.S. labor shortage will probably have to be solved by some combination of immigration, automation and recession,” writes Eberstadt in an op-ed for The Washington Post, but adds this is “far from likely to reduce popular angst and discontent.”

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