Hiring surges but trends show more working-age men dropping out of labor force

Read the Full Transcript

• Amna Nawaz:

  Welcome to the "NewsHour."

  We are following two major stories tonight. Defense Department officials are tracking a suspected Chinese surveillance balloon that is making its way across the Central part of the U.S.

• Geoff Bennett:

  And job growth surged last month, shaking off fears of a hiring slowdown.

  Let's delve first into the economic news. Employers added 517,000 jobs last month, a hiring boom far stronger than anyone had expected. The jobless rate dropped to 3.4 percent. That's the lowest level in 53 years. The latest jobs report also underscores the challenges facing Federal Reserve officials, who are focused on slowing inflation.

  And, as economics correspondent Paul Solman tells us, it fuels more questions about a labor market that's proven more resilient for months now.

• Julia Pollak, ZipRecruiter:

  A big surprise.

• Paul Solman:

  Labor economist Julia Pollak on today's jobs report.

• Julia Pollak:

  So many leading indicators turned sharply negative in the fourth quarter. Investment has been slow. Consumer spending has also been relatively sluggish. And yet, against that backdrop, job growth is exploding.

• Paul Solman:

  In fact, the latest jobs report found widespread hiring, particularly strong in hospitality, leisure, and health care. The latest revisions also found job growth was stronger than first reported in the past two months.

  But the pace of wage growth slowed in January, something the Federal Reserve wants to see more of before it stops raising interest rates.

• Julia Pollak:

  This report is sort of the stuff of economics fiction. At a time of rapidly rising interest rates, to have both falling inflation and falling unemployment is almost unheard of. It's almost as though we're in the world with $20 bills on the sidewalk and free lunches.

• Paul Solman:

  President Biden didn't go quite that far this morning, but he did take credit for a surge of hiring since he took office.

  Joe Biden, President of the United States: We have created more jobs in two years than any presidential term in two years. That's the strongest two years of job growth in history, by a long shot.

• Paul Solman:

  And yet employers still need more workers, a reported two job openings for every officially unemployed person in America.

  That's why the Fed may be concerned about the hiring boom announced this morning. The slowdown it wanted to see hasn't happened yet. But a major puzzle remains. The cost of living is up substantially, and yet the labor force participation rate is even lower than it was before the pandemic, which helps explain why there ere are millions of jobs unfilled.

  So, why the shortfall?

• Julia Pollak:

  The main reason is a huge decline in participation among older workers. And part of that may be driven by long COVID. We have seen an increase in the number of people reporting disabilities, especially cognitive disabilities.

• Paul Solman:

  Now, a bigger factor may be the work force exit of healthy prime-age working men between the ages of 25 and 54. One familiar explanation, says Pollak.

• Julia Pollak:

  The U.S. economy has experienced a hollowing out of the jobs in the middle, high-wage jobs with strong retirement benefits that used to be common among men without college degrees. Now software has eaten many of those jobs. And so non-college educated men have actually seen their working prospects fall.

• John Lilly, Job Seeker:

  I do have lots of friends who just stopped working. They're not even trying. They have fallen off the work force.

• Paul Solman:

  Fifty-four-year-old John Lilly, recently laid off and looking for work, has a few friends without degrees who have just given up.

  But how can they afford it?

• John Lilly:

  I think they're just couch-surfing on their parents' couches at 50 years old, waiting for people to die, so they can inherit the house and that sort of thing. It's just a really bizarre situation right now.

• Paul Solman:

  And some of his peers simply balk at conforming to new workplace norms, he says.

• John Lilly:

  Something like the pronouns, the gender pronouns, seem stupid to a middle-aged person. But it's not stupid if you want to get a job. If you want to get along with the work culture, you have to keep up with culture in general.

• Paul Solman:

  But a hollowed-out labor market as the main cause of the male worker shortfall seems a stretch to economist Nicholas Eberstadt, who published "Men Without Work" in 2016, now in a post-pandemic edition.

  Nicholas Eberstadt, Economist and Demographer, American Enterprise Institute: The received wisdom is that economic and structural change is driving the decline in work force participation for men, outsourcing, decline of manufacturing, less demand for less skilled work.

  All of that is fine as far as it goes, but it's really only part of the story, and I don't think it's even most of the story.

• Paul Solman:

  And most of the story is?

• Nicholas Eberstadt:

  Disability payments, dropouts, unintended consequences of our social welfare guarantees, and the invisible ex-con population, which is now maybe 25 million people in the United States.

• Paul Solman:

  And when you say ex-con, you mean they are formerly convicted, not necessarily formerly incarcerated?

• Nicholas Eberstadt:

  Only one in 10 persons who has a felony conviction in their background is currently serving in prison. It's an order of magnitude bigger than our incarceration situation in the United States.

• Mike Tyner, Chicago Resident:

  It's been almost impossible to get a job that pays a living wage.

• Paul Solman:

  Mike Tyner is one such American, though he did serve time on a bank robbery conviction. A college grad with a 3.7 GPA, even some grad school, he's had six actual job offers, all rescinded because of his felony conviction.

• Mike Tyner:

  I get it. You don't want me working in a bank if I robbed a bank. I get you don't want me working around money if I have had an issue with money in the past. But I can't clean a bus?

• Paul Solman:

  OK, felony convictions, a hollowing-out economy, government benefits, long COVID, a long list, but even that's not all.

• Tom McFarland, Missouri Resident:

  Childcare is very expensive and hard to acquire right now.

• Paul Solman:

  Thirty-three-year-old new stay-at-home dad Tom McFarland offers yet another reason.

• Tom McFarland:

  Financially, it turned out to be where childcare was basically going to take up our whole paycheck. So I chose to become a stay-at-home parent.

• Paul Solman:

  His wife, a veterinarian, supports the family on her salary. No surprise, as women keep outpacing men in college degrees, and thus in earning potential.

• Tom McFarland:

  In our case, it made financial sense and good professional sense.

• Paul Solman:

  Has he noticed more men his age becoming house husbands?

• Tom McFarland:

  Mm-hmm. Yes. It made me feel more comfortable making the decision.

• Paul Solman:

  And how does he respond when asked why he's not working?

• Tom McFarland:

  I'm currently working. I'm just working as a parent at home. I'm very proud to become — to be a stay-at-home parent. I'm very proud to be a father.

• Paul Solman:

  So, the moral of this story is pretty clear. Prime-age men have dropped out for lots reasons, contributing mightily to the curious case of a high-cost-of-living economy with not enough workers to go round.

  For the "PBS NewsHour," Paul Solman.