Labor Force Participation Has Been Declining as Long as We’ve Been Tracking the Data

We don’t wanna work?

Photograph by Digital Vision/Thinkstock

Charles Murray offers what is, I think, a persuasive rebuttal to the view that declining male labor force participation is purely a story about wages:

“OK, let’s try this,” he said. “If you get a rising economy, for example, if Barack Obama could say we are going to bring on seven years of incredibly low unemployment, then he would argue that this would do a lot of good to the working class, wouldn’t he?” I agree. “But we already had that in the 1990s, and yet the dropout from the labour force continued to go up, people on social disability went up. Divorce went up. We have no evidence that a robust economy has much to do with these problems at all.”

What Murray’s sweeping under the table here is that the prosperity of the late 1990s did, in fact, do a lot of good for the working class. See the excellent and unjustly neglected 2003 book The Benefits of Full Employment: When Markets Work for People by Dean Baker and Jared Bernstein (quietly the most persuasive case for neoliberalism out there, though I think the authors would disagree with that characterization). But he’s right to say that this did not halt the trend toward declining male labor force participation. On the other hand, to the best I can tell the trend toward declining male labor force participation has literally been with us for as long as we’ve had data on male labor force participation.

The trend waxes and wanes to an extent, for what I imagine are a variety of reasons. But the secular trend is clear and the reason for it seems obvious. There’s more to life than work and gross domestic product. America is better at doing stuff in 2012 than it was in 1962. We’ve used that improved know-how in part to amass more stuff per capita than people had in 1962. But we’ve also used that improved know-how to enjoy much cleaner air than prevailed in 1962. And we’ve used that improved know-how to do less work than people did in 1962. People spend longer in school pre-working, spend longer in retirement post-working, and we take a somewhat more generous view of who counts as disabled. It’s nobody’s fault because it’s not in any obvious way a problem. Increased labor force participation by women during this period has been an important source of social and economic empowerment and has also meant that society has managed to get by with a smaller share of its men doing paid work for market wages. And that’s great!