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What Powell needs to know about labor participation in the United States



Jerome Powell, nominated by President Donald Trump to head the Federal Reserve, says that focused on the disappearance of men from the US labor force. UU He is not the first: Fed Chair Janet Yellen considered it a major concern and part of why she never took the main unemployment rate to the letter, even when it went down to a minimum of 16 years.

But Powell, who is scheduled to succeed Yellen in February, it is correct that male labor participation in adulthood may be the key to achieving the next stage of the Federal Reserve policy. We did an immersion in labor data across the country, and here are six lessons that the new president will have to handle.

1
. Encouraging male participation of the older population will be an uphill struggle

The participation rate of working-age workers, those between 25 and 54 years old, offers a more complete picture than the main unemployment rate. Right after World War II, 97 percent of men of working age were participating in the labor force, either employed or actively seeking work. That number has decreased steadily and today is 88.5 percent.

That means that one in nine men is not only unemployed, but has stopped looking for work. Since the unemployment rate only takes into account the people who actively work in the labor force, those who do not participate are left out of this calculation. This is how you can have an unemployment rate of 3.3 percent for men of preferential age, but also 11.5 percent of that cohort that is not in the labor force.

As things stand now, the participation rate of all men will continue to decline, according to the projections of the Congressional Budget Office. Even adjusted to exclude the effects of population aging, which accounts for a large part of the decline in the overall participation rate, the rate is still expected to decline over the next 25 years.

2. Participation will be even more difficult to address in some states

The deficit in male participation that Powell noted varies dramatically by state, which may support the idea of ​​the Federal Reserve candidate that it represents slack. As of 2016, the most recent year for which data are available, West Virginia had the lowest rate among men of working age, with 80.2 percent. The state of the Appalachians has historically had one of the lowest participation rates in the country. Even in the late 1970s, when the national rate for men aged 25 to 54 remained in the mid-1990s, that of West Virginia was 90 percent.

Behind it are other states with a long history of poverty: Mississippi, Kentucky and New Mexico. While the Utah Index of 93.1 percent leads the nation, all 50 states have seen a decline in labor force participation for older men since the 1970s.

3. The opiate epidemic has played an important role

Powell and Yellen have said that opioid addiction is one of the reasons why there are no more men in the labor market. The data show that states with low rates of male participation in older age also have high rates of deaths from opioid overdoses.

The research of Princeton University economist Alan Krueger found that the increase in opiate prescriptions from 1999 to 2015 could represent a fifth of the decrease in male labor participation. Krueger also finds that almost half of working-age men who are not in the work force take prescription painkillers on a daily basis.

4. But the decline of jobs dominated by men has also taken its toll

It's not just the opioid crisis. In the late 1970s, the US workforce UU I was very concentrated in industries dominated by men. The manufacturing industry was the largest in the country and in 1978 employed about 22 percent of workers. Almost three quarters of them were men, which has not changed. That industry has seen by far the largest decline in the last 50 years and today employs only 8.5 percent of the workforce. The biggest winner in employment is education and health services, which are 77 percent women and now represent almost 16 percent of the workforce.

It is unlikely that those manufacturing jobs will return en masse after years of relocation and globalization. That means that more men will need to engage in traditionally female occupations, such as nursing, if they want to rejoin the work force. Colorado, which has the fourth highest rate of male participation in preferential age, has a high percentage of its work force employed in professional and commercial services, and leisure and hospitality, two of the industries that employ most nationally.

The states that have seen the largest decreases in male labor force participation in the last 50 years are those with large blue collar work forces in the sectors that mostly have employed men. In West Virginia, mining, manufacturing and construction employed 23 percent of the state's workforce in 1990. That had plummeted to 13 percent this year.

The fall of the state, "in relation to the nation, was largely due to industrial composition," said John Deskins, professor of economics at the University of West Virginia.

5. Education and training are key to promoting male participation

The change in industries in the US. UU It has also created an environment in which higher education is increasingly needed for stable, middle-income jobs. In the 1970s, men without college degrees could often get a good job in manufacturing or in other sectors. Nowadays, many of these jobs have disappeared and in their place there are jobs like nursing or teaching, which require university degrees. Workers with at least a bachelor's degree earn two thirds more than those with secondary education and participate in the labor market at a higher rate.

With the low unemployment rate, vacancies are close to a record when employers struggle to find workers with the skills they seek. Some corporations have created training programs or partnered with community tertiary institutes to ensure that they get workers with the high-tech skills that are now required to manufacture in the US. UU Economists and politicians, including the Trump administration, have called for a revival of vocational training programs to help better prepare American workers.

The US labor market UU it is increasingly polarized as the workforce moves from routine tasks (manufacturing, construction) to non-routine tasks. This last category is often of low skill or high skill: a taxi driver or a lawyer. The middle layer, often composed of jobs that pay a living wage, is effectively fading.

6. Women are winning, but they could also push it

. Only one third of women of working age worked immediately after World War II, a figure that has increased to 75 percent today. But one of the things that did not increase is that there are more parents who stay at home: the proportion of families of married couples where women are the sole breadwinner of the family was 5.4 percent in 2016, it barely changed from 4.6 percent in 1995. [19659024]
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