A Follow-Up on the Reasons for Prime Age Labor Force Non-Participation

Yves here. I assumed that non-participation would be highest in the older end of the cohort due to ageism. Wrong! The new normal is still hitting younger workers hard.

Jamie Galbraith, in his book The Predator State, had a lengthy discussion of why overinvestment in education, particularly graduate degrees, was a bad idea on an individual and societal level. Basically, the more advanced your education, the more specialized your knowledge. There are more jobs for college graduates than for lawyers. Moreover, most people need to expect a higher income to justify investing that additional education, so if they can’t find a job that takes advantage of their specialized education, the cost of the shortfall in income is even greater due both to the money they spend to get educated and the opportunity cost of not working those years.

By NewDealdemocrat. Originally published at

Here is something interesting I found in an article by staffers at the Kansas City Fed a couple of weeks ago.

They broke down the 25-54 prime age labor force participation group for men into 10 year slices, by education, and by reason for not participating in the labor force. They focused on men, because including women confounds the results by the secular societal change whereby women entered the labor force en masse between the 1960s and 1990s.

First of all, it turns out that the prime decade driving the increase in non-participation is the 25-34 age group:

That finding is amplified by breaking down each prime age decade by education level:

Across all age levels, the biggest jumps by far in non-participation were among those with high school degrees and some college, and especially so among the youngest decade.

Next, they broke down non-participants by the reason given for non-participation, using the monthly household survey that is issued as part of the jobs report. The Census Bureau asks non-participants if the reason they are not in the labor force is disability, family care, education, retirement, or other:

In accord with the above, among the 25-34 age group, the biggest jump in the reason for non-participation was education. Interestingly, among the 35-44 and 45-54 age groups, the big increases were family care and retirement(!). The rate of those claiming disability actually decreased (a big surprise). These increases were similar across all levels of educational attainment.

I have two takeaways from this: first, there is likely an “education arms race” going on, where ever-increasing levels of education are deemed necessary in the competition to obtain good-paying jobs. Seventy-five years ago, a high school degree is what was necessary. Forty years ago it was a college degree. Now it may take a graduate degree. Ultimately this is a self-defeating waste of resources, and worth its own lengthy article.

Second, this is evidence for the “child care cost crunch” I wrote about several years ago. As the cost of daycare has increased, and wage growth has decreased, an increasing share of households are finding that it makes more sense for one spouse — in this case, “Mr. Mom’s” — to stay home and raise the kids.

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51 comments

  1. Left in Wisconsin

    1. Child care. Compared to when I was raising my kids 10-15 years ago, when I knew the other couple of dads in the hood doing the same, I now see lots of younger men around during the day with kids. (In my hood, not a lot of 3rd shift workers.) My guess is a good portion of those younger “retirees” are also doing some sort of family care, children or elders. Would cover the 35-44 as much or more than the 25-34.

    2. Schooling. My oldest is still just early 20s but the new norm for many middle class kids seems to be a couple of years of nothing-special work after college and then back to grad school. Can only imagine the debt load. Partly arms race, partly just deferred adulthood.

    1. Whiskey Bob

      For point 2, I can confirm this as an adult male in my 20s. I thought that I could get a decent paying job out of college with a Bachelor’s but I can only find underpaying jobs that aren’t even enough to live on. All the options I thought I had turned out to be unfeasible and so graduate school seems like the only option left so now I’m planning to go back.

  2. Isotope_C14

    Excellent post.

    I see this especially in the sciences. Everyone has a PhD for even sales positions. I can’t think of a less necessary PhD than one for selling biological equipment/robots. Any undergraduate can master a biological robot, HPLC, or any other automated system. Many lab technician jobs are now occupied with people with a PhD, which again is not necessary for this role in a lab.

    I suspect part of it is that incompetent HR departments use resume algorithms to pick out the most qualified to interview. Since the HR people don’t have degrees in the field they are hiring for, they figure the degree actually confers the necessary training.

    I currently, and have in the past worked with many PhD/Post-graduate degree holding people that have Dunning-Kruger, and should have never, ever been given a degree of any sort. They should be kept far away from any workplace as they also tend to create misery for everyone else at work. They also often tend toward what I call as “lab-voodoo” like believing that all chemicals labeled “protect from light” need to be wrapped in aluminum foil. Often new students who don’t know any better end up picking up these ridiculous habits and proceed to mis-inform another generation of young scientists in the future.

    1. Nat

      100% agree with your first two paragraphs (I am not counting “Excellent Post” as a paragraph but I agree with that too). The observations and thoughts you conveyed in there completely correspond to my experience as well. Your third and final paragraph I haven’t personally noticed though, but that might just be me.

      1. Isotope_C14

        You are very lucky Nat,

        I would love to be in a research situation where there wasn’t just one person that believed that the overhead fluorescent lights didn’t need to be off to do Cy3/Cy5 RT PCR assays.

        Usually it is just one, and they are intolerant about the possibility that their “extra effort” is meaningless. They are just being extra careful.

        Too bad our climate scientists haven’t been “extra careful”…

    2. Whiskey Bob

      Incompetent HR having to pick out the best candidate from many qualified ones, which inflates the winners into being greatly overqualified.

      1. John Wright

        Assuming these applicants had already searched for well-paying jobs which would have made good use of their degrees, this points out that the applicants found these jobs did not exist, at least in the quantity needed.

        Otherwise they would not be applying for these jobs.

        This is an indirect indication that the return on some advanced education is not as high as the media/educational industry/government promotes.

      2. charger01

        Bingo. You should consider, as a normal working stiff, how will I stand out to the HR person making 85k as a desk-warming gig? If I’m not impressive on paper (and justifiable) then I’m not going to get the job. The old humor blog, Philadelphia Lawyer, had an excellent treatise on this topic in the form of a pretend commencement speech given to undergrads back in 2009.

    3. run75441

      It is a game, get used to it. Soon I leave the work environment to lecture at a Chicago University as an adjunct and convey my experience globally.

      I am looking forward to it.

      1. Isotope_C14

        Life isn’t a “game”. We need to bust up the system that doesn’t work.

        I find it sad that the capitalist education system isn’t questioned – people are encouraged to accept their line in the slaughterhouse and to play by other people’s rules.

        Check out “The New Human Rights Movement” by Peter Joseph. Very enlightening concepts in there.

  3. Tomonthebeach

    My own experience tells me that advanced education does not necessarily narrow one’s career options over time, thereby increasing the risk of middle-aged unemployment. Over 70 and retired, my career included 12 different positions bouncing back and forth between the East and West Coasts with stops now and then in the middle. I am still being asked to consider job offers.

    A PhD will only narrow one’s career options if one chooses not to evolve with the times and seize challenging opportunities that often require relocation (9 times in my career). My PhD always came in handy. Even though each successive job had unique technical and managerial challenges, I was well prepared to master them. I had learned how to think, analyze, and communicate. After two years on the tenure track, I got a better offer, and another, and another, for 44 years.

    I would argue that the modest blip in later-age returns to school might reflect transitional changes in career development patterns as our economy evolves. However, those numbers are amplified to relative significance because everybody from POTUS on down constantly characterizes college as a panacea for job loss or career stagnation. College or grad school is not a panacea, and too many who take up that path find nothing at the end of it but debt. On that we agree.

    1. ape

      But you do see how insane it is to ask people in general to constantly relocate? How the price for education and success is cutting the bonds that keep most people sane? How that can work for only the most individualistic, stable personality types — and how the “personality like a rock” may not be optimally the only personality type we would want at the PhD level, in terms of social distribution?

      College or grad school is not a panacea — but it’s more serious than you state it. The very fact that it’s promoted as a solution, when it’s conceptually the same as saying that the solution is for everyone to be rich! And that’s not a straw man — if you look at semi-intellects like the social relations columns on StackOverflow, you’ll get questions like “Why doesn’t everyone invest and get rich?” posed as serious questions regarding peoples responsibility, rather than a parody question intended to point out the underlying social structure that wealth/education reflects.

      If everyone had a PhD — people wouldn’t be much more educated than they are today. The PhD would simply be defined in years spent in school, but the thesis would be devalued. You can already see it, comparing the educational level of a PhD holder in 1900 compared to 2000. You just didn’t have technicians-with-a-PhD a century ago, and quite a few PhDs today are in fact tech PhDs.

      1. jrs

        +1 It’s insane, spend a decade in college getting an advanced degree ( debt) and then spend your life relocating. And that’s supposed to be appealing? Wow does that start to make ANY other career option look better in comparison.

      2. John Wright

        My late father graduated with a college degree (in business) in the Great Depression.

        He would state that “you needed a college degree to pump gas for Standard Oil” in the Great Depression

        After sleepless nights during his job search, he ended up using his work experience from his father’s small grocery store.

        As he told the story, there were about 80 men interviewing for the job opening, and he told the employer that he could help them sell more meat as he grew up in a grocery store and had some ideas.

        Safeway hired him as a butcher..

        He remained skeptical of the underlying value of a college degree, but understood the value assigned by society.

        Some prominent tech people have realized when it is time to seize the opportunity, as Bill Gates, Steve Jobs, Steve Wozniak, and Larry Ellison lacked college degrees when they started their businesses.

        They may have realized that education had a definite opportunity cost, in lost time, that would prevent or distract them from building their businesses at the perfect time.

        The media and government officials have asserted there are two can’t lose investments, a college degree and home ownership.

        I do not understand why more education and home ownership are not subject to the same law of diminished returns with ever more societal investment.

        1. NotTimothyGeithner

          I’m not sure that this isn’t happening. The issue with housing is with a hideous 30 year style loan, how far can a mortgage holder stretch out payments. Its not a loss until you sell. Anecdotally, I see people staying houses I know they didn’t intend to stay in at these ages. What I suspect is they don’t think they can get what they wanted out of those houses at the moment. They can handle the payments, but they are expecting to cash out. Their ability to pay for their lifestyle and still pay for their dotage is wrapped up in the idea the house will have value. Its a powerful hold on them. It won’t be a hold on people renting.

          As for education, once upon a time it was important for the development of saying these are qualified people who have access to institutional memory which is expensive, but wikipedia, Khan Academy (I know, I know), and so forth all exist. I’ll be bold and say these things are the Gutenberg Bible for the latest incarnation of priests. People will fight it, but when the priesthood isn’t providing the living standards the abbots enjoy, things will change. We see the problems in smaller schools closing.

          1. french75

            I’ll be bold and say these things are the Gutenberg Bible for the latest incarnation of priests. People will fight it, but when the priesthood isn’t providing the living standards the abbots enjoy, things will change.

            Amen. This is why I’m in graduate school, and why my outlook is very negative on the process and its prospects.

            1. charger01

              I am as well, but with the added “fun” of utilizing their online program. My sheepskin will still say “State University, Masters of Science” that will bolster my resume. However, it remains to be seen how it will improve my prospects. Unless I enter government service- that’s a direct correlation for entering slightly higher on the GS-scale.

          2. Tomonthebeach

            Good point. Why is it that we tacitly accept homesteading as a norm despite often dire economic consequences for the household? Over half my Chicago prep-school buddies pursued careers in other states. Like me, about a third have doctorates.

            Not to pay too much homage to Dean Baker, but your remark about the 30-year fixed is part of a rigged system that anchors people to their employer. My colleague Ed Schein wrote volumes on “career anchors,” and how things like homesteading negatively affects upward mobility.

            Frequent moves meant that I had a faster track than peers who passed up opportunities in order to sink roots. It’s a lifestyle choice. But then, so is aiming for a tenure-track job in an obviously shrinking academic market.

            1. Penny

              Sometimes one one doesn’t equal anything obvious. IF more and more young people are going to university both undergrad and post-grad AND fewer tenure track jobs are available(a shrinking academic job market) THEN…WTF is going on? Something here about increasing supply of those wishing to be educated and decreasing demand for educators ought to allow at least a moment of surprise. I know …we have indebted casual students being educated by more indebted casual revolving door assistant professors….each and all in search of a decent job.

        2. ape

          “Some prominent tech people have realized when it is time to seize the opportunity, as Bill Gates, Steve Jobs, Steve Wozniak, and Larry Ellison lacked college degrees when they started their businesses.”

          Or they couldn’t hack the academic, got out, found they could hack the business world and got lucky in the moment they failed out? Without very strong evidence, I tend to doubt people being farsighted. And I can’t imagine any of those guys being particularly good at the academic world or the scientific world, both of which are quite different from producing commodity goods.

          Failing at the right time and place can be key.

          1. John Wright

            I can’t hazard a guess about how they were doing in school, perhaps even poorly as they were distracted by developing their businesses.

            Wozniak was successfully working at Hewlett-Packard without a degree at the time Apple was formed and he eventually did get a BSEE degree from UC Berkeley many years later.

            Jobs, per what I’ve read, was unhappy having his father work very hard as a mechanic to pay the bills at Reed College, and he quit. He actually audited classes for a time.

            Gates was writing software while attending Harvard, which could have affected his school performance, but I can’t say.

            These guys may not have been particularly farsighted, but they may have realized what they were learning in school might not be particularly useful in their out of school obsession, and they pursued this obsession to very profitable ends.

            As Wozniak showed, one can go back and get the degree.

            Luck certainly mattered, but don’t know one can assert they “failed” at school.

            Maybe they thought school was failing them.

            1. charger01

              Even fabulously wealthy individuals, such as Shaq, can pursue higher education as leisure.
              Kudos to Shaq to further his education, but it’s a bit of a head-scratcher at his stage in life as a wealthy individual.

              This reminds me of Velben’s Theory of the Leisure Class, where the particulars of the wealthy are emulated by the society at large, as socially conspicuous economic behaviors. Or as we say today in politics, virtue-signalling.

    2. JerryDenim

      Your “own experience”? Your experience as a person who was born in 1947 (over seventy) or before? Your experience as a person with “44 years” in the work place?

      I’m sorry Beachy Tom but your experience isn’t the least bit relevant to what 25-34 year olds are experiencing in 2018. You’re a baby boomer and back when you were a young man in the mid-sixties only 12% of men and 7% of women in the United States held bachelors degrees. In 2017 those figures were 33.7% and 34.6% respectively, or almost seventy percent of the population! Kind of an apples to oranges comparison- don’t you think?

      Furthermore people like yourself are exactly the reason why young people are expected to be so credentialed in 2018. Forty-four years of work experience, a PhD and yet you were willing to bounce “back and forth between the East and West Coasts with stops now and then in the middle” twelve times? How exactly does that work in 2018 with a spouse that is likely educated and indebted with career ambitions of their own? Doesn’t really sound the best for building community or ‘putting down roots’ as they say. Guessing from the information in your comment it sounds as if you continued to work full time until you were seventy or older?

      As a person who is no longer considered young by HR departments ( Forty-three) I have no resentment towards baby boomers who through no fault of their own were able to enjoy a world of relative abundance and greater prosperity, but for goodness sake, take your head out of the sand and acknowledge the world has changed tremendously since the nineteen-sixties! Your life, your experience is valid, but your plucky Horatio Alger stories have no relevance to young people in 2018. They only make you sound smug and out of touch. Do your age cohort a favor and keep your generalizations about labor markets to yourself if you can’t grasp that things have changed and your running head-start in the sixties gave you a life-long advantage.

  4. ambrit

    The other side of that ‘career vise’ is that the formerly remunerative trades jobs available to the ‘lower classes’ have been ‘outsourced’ to lower paid foreigners and legal and illegal migrants.
    When America finally blows up, it’ll be on a Yellowstone Caldera scale.

    1. Kilgore Trout

      The other side to the blue collar trades issue, and the current labor shortage w/o immigrant labor, is that our betters have spent decades down-playing the value of labor and working with one’s hands, and encouraged too many to go on to college. Common Core embodies this notion–making everyone “college or career ready”. I think it was Diane Ravitch who pointed out that it is nuts to expect an Ivy League bound student and one who intends to become an electrician to have similar outcomes on the same test (not that it’s impossible, certainly). It’s part of the Neoliberal assault on public education as well: increase the pool of those taking high stakes “college-bound” tests, set the cut-score as high as possible, and then proclaim that public schools are “failing” when there are too few “proficient” scores (equivalent to a B+, by Ravitch’s reckoning).

  5. ape

    “The rate of those claiming disability actually decreased (a big surprise).”

    But the percentage of the male potential workforce claiming disability increased by a large amount — just not by as much as those claiming early retirement, family care or in school.

    And all those numbers are fairly trivial compared with an almost 100% (about 6%) increase overall in young men dropping out of the workforce.

  6. BobW

    Some college, retired now, my career path was trade school electronics. It was that or automotive, I chose electronics to keep my hands clean. With electronics now disposable or board-swap the choice would be automotive.

    1. NotTimothyGeithner

      Are you sure about that? Cars are better in many ways and tend to have problems with the computers which really simply need to be swapped out.

      Its anecdotal, but one of the mechanics at the garage I use does insurance as a seasonal plan. He has that master certification. He’s the low man on the totem pole, but he’s the only green horn in there. His plan is to open one those fake paint body covers for cars because he doesn’t see traditional automotive as working out. The mechanic who took care of my dad’s twice rebuilt camaro (not by my dad) was advertising this Spring on the radio, but when cars need computers swapped out and tend to break less, he’s losing business. Through the grape vine, my dad found out this is the basic problem. He still gets the camaros’ in need of TLC (there are less of them on the road these days), but he doesn’t get worn out normal everyday cars because they don’t wear out the same way.

  7. Steve H.

    ! There’s yer problem…

    1) Student loan debt, bankruptcy, Biden.

    2) The 20..30 year-old unemployed male is a prime driver of instability in ‘s model.

  8. Pft

    The jump in 35-54 is very significant, especially as 1996 is much closer to the end of the previous recession and 2016 is at the peak of the so called the full employment boom

  9. kevin

    According to the table there’s less nonparticipation because individuals are still in school with a BA+ now then in 1996. (29.7 vs 31.2) I don’t believe that squares with the rest of the hypothesis.

  10. philnc

    Visceral reaction to anyone with an advanced degree and tenure (whether academic or non-academic) who looks down at younger generations and tells them that a college education is (or should be?) unnecessary: Why are you slamming the door behind you now that you’ve “got yours”? This drumbeat started over 30 years ago and has short-circuited the futures of too many kids to be allowed to go unchallenged. In the process both high school diplomas and college degrees have been devalued, “drown it in a bathtub” cuts to education at all levels tolerated, and too many behind the curtain scrambling to spin away the hard truths about today’s job market.

    1. ape

      A medical school graduate student may make $24k-36k / year, and until recently didn’t even get health insurance. Her PI (Professor, Boss) at a medical school makes $150k-500k / year.

      No one seems to think this is batshit crazy. No one wonders who would risk 5-7 years working at a 10:1 disadvantage so that, another 7 years later, if they win the lottery of the tenure system, they’ll get the big money. But given that only 10% win the tenure lottery… and even being generous that “many” of the non-winners intentionally took the industrial route… you have a lot of people (25-50%?) who spend 6 years at 10:1, another 6 years 5:1, and then are left at essentially starting from scratch in their mid-30s.

      After relocating 3 times, once for graduate school, and then a couple of times chasing postdocs. And still needing to relocate another time for tenure track.

      Add to it “but we want females” — but only females who are either going to ship their children back home (common pattern among Chinese students), or forego a family until they’re in their 40s (not the best time to start raising a family unless you have a younger partner with the energy). And of course, if you reverse it and start an academic career after the kids are bigger in your 40s, you’re really swimming upstream.

      So, those with an advanced degree looking down on the rest of the population: you spent $75k on a lottery with a risk of a billion to one for each $1 ticket and won $1M, and think you’re the smart one?

      Maybe not. And thus why folks running the show fail to see batshit crazyiness.

      Obama: “At least at the top levels of the federal government, people work harder than in the private sector. When I came out of the White House, everything looked like it was in slow motion. I felt like I was Neo in The Matrix. Our folks were putting in 80-hour work weeks and barely getting vacations and under unimaginable pressure.”

      You expect sanity from someone who humble-brags 80 hour work weeks without vacations? Who thinks it sane to put people handling subtle diplomacy and nuclear standoffs under that kind of bonus pressure? That’s the class of people who are coming out at the top of advanced degrees — literally insane people, in the bulk.

    2. Amfortas the hippie

      burn the ladder behind you has been a feature of the generation before mine(namely, Boomers, altho I loathe such generalities) for as long as I’ve been paying attention.
      I was talked into abandoning the pursuit of a philosophy degree in favor of “something practical”—which ended up being Radio/Television/film. junior year, the cool Prof was hosting one of his “lets watch commercials!” parties, and drunkenly let slip that everything we were being trained for was already moribund…the jobs just wouldn’t be there, except inasmuch as they would be equivalent to working at McDonald’s.
      Of course, for me, the funding dried up at the exact instant that the drunken laziness of my by then long ago first semester at college had come back to haunt me(gotta take all that over again at THIS institution,lol)…so I undertook to pay attention to Universe tapping my shoulder and become a cook/Chef(back when I still believed granddad’s insistence that “work hard=make a living”).
      Similarly, I supported my wife in going from Teacher’s Aide to Teacher, through various programs that indicated a societal need for more Teachers. Moving goalposts at the university, no one in charge, capricious and authoritarian profs stepping into the vacuum of the nonexistent dean….and then the State of Texas making it all but impossible to get certified to teach Spanish(I have only anecdote for this, from 100 or so people who lived it. state has outsourced all of that credentialing apparatus, so it’s proprietary, and therefore none of our bidness)
      Ten years, working full time, with a crippled husband raising the kids.
      and finally, she’s a teacher, in spite of it all.
      I see on the local tv news that there’s a shortage of Spanish/ESL teachers in Texas, and want to throw something.
      and I see people like Hillary preaching that America is Already Great, and an education is the path to prosperity, and think that exploding mail is too good for her ilk.
      Requiring us to sing for our supper, while outlawing music.
      Fie.

      (I will now go smoke a joint and pull weeds for the lettuce bed, and endeavor to forget what I know for a time)

      1. ChristopherJ

        Thank you Amfortas.

        I’m angry too, mate.

        When I ‘read’ economics in the early 80s, undergraduate life in Australian universities was far different from now.

        1. Tuition was free, but we had to join the student union (about a $100 a year).
        2. Parking was free and available.
        3. The staff were paid well. All had permanent jobs and defined benefit retirement benefits from age 55.
        4. Arts degrees were very popular, whether history, humanities, ancient languages, archeology. If you didn’t pass, there was always next semester.
        5. We drank a lot of beer and smoked weed.
        6. I don’t remember being too worried about jobs or my future.

        I don’t recognise the same institutions today, with a focus on the bottom line and income from overseas kids. And, all our kids are focused on is acquiring the right skills to be earning as soon as possible. And, taking on heavy debt burdens which can’t be discharged in bankruptcy. (Here, they ‘tie’ the debt to income taxes to ensure it never goes away until you do.)

        If corporations could get degrees, you could borrow (as one), do your study and then claim S11 protection if your business decisions don’t work out. That’s what corporations do, eh?

        Best, bro

    3. Yves Smith Post author

      This is not “got yours”. I suggest you go read Galbraith rather than shoot the messenger. This is reality.

      If you have narrow skills and your job opportunities go away, the fall in income is steep. This is a fact. For instance, one of my friends is an academic who was widely recognized as brilliant. His reviews for tenure had a large number of people calling his work Nobel Prize level. But he was blackballed because he’d tell people they were idiots (politely, his tone was never rude but the substance would be that they were way way off base). This would have been fine at some schools where the academics mixed it up a lot but not at Harvard.

      He bounced around and finally did get tenure at a pretty good school. But he was in a real panic for a while because if he didn’t get tenure it was not at all clear if anyone would hire him to do anything.

      Similarly, when the structured credit industry collapsed after the crisis, its incumbents were unemployed for a long time. I know several personally who had very high paying jobs before and what they do now pays less than 1/3 of what they used to make. And this includes people on the buy side who were warning about subprime risks (it’s false to say people were not concerned, literally every RE conference in the 2-3 years before the crisis had a panel with people worried about what was happening in subprime).

      How about radiologists? That is expected to go away entirely due to AI doing a better job of reading films. What is a 35 year old radiologist supposed to do with his training and experience?

      1. ape

        Precisely why a consumer-oriented, free-market approach to education is insane (bat-shit crazy, to be exact).

        You’re asking people to bet crucial years of their lives on the market supporting their live, then you’re asking them also to capitalize it? When they’re 20 years old, and Americans won’t even trust them with a beer?

        Isn’t the saying that a start-up owner who puts in both labor and capital is an idiot?

        Societies need to make the bet and capitalize it — and if the investment is more than a few years, job security should be demanded as well. One starts to wonder whether the middle-class isn’t made up of the dumbest people in the country.

  11. Adam1

    There’s another factor at play here, at least for a segment of young people. If you graduate from college or graduate school and can’t get a well-paying job quickly you eventually need to find ways to cut expenses massively to pay your student loans. This often results in moving home. But what if you grew up in a rural community or a small downwardly mobile city? In many of these communities you might find out that there are no jobs to be had and you’re left sitting on the sofa with mom and dad covering your expenses.

  12. Pete

    Many middle class business’s have dissappeared in the past 25 years. Not due to forign factors. Travel Agencies, paint stores, small hardware stores, book stores etc. Literally 100’s of thousands of middle class business’ and associated jobs that will not return because some manufacturing jobs might come back to the US.

    1. Penny

      A lot of middle income jobs were government jobs, back in the day before Reagan and thence the neo-liberal destruction of government services. Post-office employment is one example until Nixon tried to destroy it as a public service; social security benefits employees from local clerks to top compliance officers in DC…and so on. Presently public services on line are poor; phone calls are routinely answered by overworked and poorly educated outsourced employees and everyone hates the government…not the outsourcer…ditto for the prison services in all states. WHO did this? A whole lot of very unpleasant ideologies using the money supplied by a few extremely unpleasant rich ideologues (Koch brothers, Mercer family, Wallmart heirs and so forth.)

    2. coral

      Small-town retail almost all gone. Just restaurants and beauty salons. Plus chain drugstores like CVS.

  13. Dave_in_Austin

    I live in Austin, the same city as Jamie Galbraith, but travel in both rich and poor circles. Here are two observations.

    First, many of the “unemployed” men are employed. I meet and sometimes employ skilled workmen. Many of them are ensnared in divorce and child support issues and are facing the “jail with no trial”/contempt-of-court/debtor prisons system which was invented by the U.S. courts and is unique to the U.S. as a nation.

    These guys just say “screw it” and go underground, making anywhere from $15/ hr to $50/hr as plumbers, electricians, light construction and programming jobs. No fixed address; cell phone only; new girlfriend’s name on the lease; cash the check at the employer’s bank; use the same “subcontract of a subcontractor” system that protects big companies that employ illegals. Medical care is provided by the emergency room at our expense (and the numbers can be huge).

    For years the federal Bureau of Labor Statistics has had two sources for “how many employed” information- the household survey (knock on residential doors) and the manufacturers survey (how many people do you employ?). From the 1930s through the 1970s the two series yielded the same results. Then they slowly began to diverge. Today the difference is between 5 and 10 million workers. So my experience hiring home renovators is probably not unique.

    Second, I’m old enough to remember the 1960s. Law schools were inexpensive (U of Connecticut was $400/semester) and it was still possible to apprentice to a lawyer and then take Bar Exam. Now we don’t measure outputs (Can this girl pass the bar exam?), we measure inputs (Does she have a four year degree in basket weaving so she can be admitted to a $30,000/yr law school?) . Why are law schools suddenly so expensive? The government sanctioned monopoly (ABA) says the law faculty must be full time (our part time teachers at U. Connecticut included sitting judges; my friends at Georgetown had DOJ GS-15 lawyers teaching their specialties part time). And the law school must have a fully equipped library (Why? U Connecticut had a pretty good library but was close to the Connecticut State Court library).

    The same “measure inputs not outputs” system protects the rich kids and makes it nearly impossible for poor outsiders to break into the system without borrowing 100K. And hiring is based on these credentials (exactly why do civil service jobs require a four-year degree instead of a rigorous test of knowledge?). The result is a world of non-degreed adult males who rationally assume the world is rigged and act accordingly. The only real competition they see is in pro sports (Do the Dallas Cowboys test their wide receiver candidates by asking for a college transcript or by seeing how fast they can run 40 yards).

    So are they really missing from the labor force? I doubt it. I’d love to see the Dept of Labor do a study on the houshold survey vs employer numbers but I’m not holding my breath

    1. False Solace

      > First, many of the “unemployed” men are employed. I meet and sometimes employ skilled workmen. Many of them are ensnared in divorce and child support issues

      It’s not clear that the number of men doing this has changed over time. I don’t recall reading that the laws regarding child support have changed all that much since 1996. So it’s probably not much of a factor in the rise of non-participation.

      > These guys just say “screw it” and go underground, making anywhere from $15/ hr to $50/hr as plumbers, electricians, light construction and programming jobs. No fixed address; cell phone only; new girlfriend’s name on the lease; cash the check at the employer’s bank; use the same “subcontract of a subcontractor” system that protects big companies that employ illegals. Medical care is provided by the emergency room at our expense (and the numbers can be huge).

      Wow, some people go to a lot of trouble to avoid paying for their own kids. It seems like at $15-50/hr they could afford to.

    2. Roquentin

      I had a laughing fit reading this because the part about “going underground” was so dead on. I do a lot of bookkeeping work in construction now, and the shell game of contractors and subcontractors gets pretty absurd.

      To be really honest, most people should just consider working in skilled trades and construction. My parents thought I’d lost my mind a while back when I seriously considered becoming an over the road trucker after I lost my job. The pay, even to start was about as good or better than what I’d received to do low end office work in the media. Working in the media sucks so much. I can’t believe I held on for as long as I did. I think it’s also really accurate to say that too many kids were taught that construction and other trades were something you shouldn’t aspire to do as a child. The pay really isn’t that bad. I have a liberal arts degree, I’m glad I do. If college wasn’t so damned expensive you could just do that and then go to work as an electrician or something.

    3. knowbuddhau

      Well said, Dave. My first thought was, what’s the *participation rate on the non-participation survey? And I notice that none of the options are, “The system is a fraud!”

      I know a guy with a bad knee who was given a type of Washington state’s state-funded health insurance. Great, right? Except no one in the county will take it.

      He happens to be living in his van. He makes an effort, to participate, and gets the shaft.

      Hard enough to get back to work after lengthy unemployment; the longer you’ve been without, the more people hold that against you. Add being over 50 and a bad knee, and it’s nearly hopeless. Compound that with being given useless coverage when what you need is simple care.

      That kind of thing can really sour a guy on “participating.”

    4. ScottB

      Dave, you are incorrect about the BLS survey differences. The “knock on doors” will always be greater than the employer (nonfarm) survey due to self-employed and farmworkers (and some other factors as well). When adjusted for definitional differences, they track pretty well. You can find the chart at .

  14. dutch

    These anecdotes about the lives of “non-participators” resemble what we’re reading about the MAGAbomber.

  15. Chris

    Have there been any thoughts or papers on how difficult it is to actually leverage a graduate education into a better job because of timing? You’re basically trying to perform market timing on a global scale, and you’re hoping you’ve got enough skills to sell what you learned. That’s true for those who are trying to get into academia as well as those who are looking to industry or government.

    A grad degree is a 2-4 year bet that what you studied and the pedigree of the institution you studied at will be worth more than the money you could have earned if you didn’t go to grad school. That’s a tough thing to evaluate in the best of times. These days? I don’t know how I’d have done it.

    1. JerryDenim

      So true, and yes, somewhere. Sorry I can’t be more helpful, but try searching the NC archives. I recall seeing a study here which showed graduates entering the workforce during a recession suffer a lifelong earnings/career progression penalty that is never recovered.

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