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The Underside of the 'Great Resignation'

It’s been months now, but hiring managers everywhere are still waiting by their phones. They’ve been told not to worry—the job applicants are coming. Absent workers are just taking some time, right? You know, checking out their options . . .

The labor optimists are in denial. Yes, millions of people each month are changing jobs to improve their pay and lifestyles. But millions of others appear to have quit work entirely. The labor-force participation rate was 61.9% in December. That’s 1.5 points below the pre-pandemic level, and barely changed since August 2020.

This is the dark underside of the “Great Resignation,” the term the press is applying to the record levels of unfilled jobs in the pandemic era.

Nicholas Eberstadt,

a political economist at the American Enterprise Institute, argues that the long-term resignations won’t turn out so great. Defectors from work will hurt the economy along with their own life prospects.

“I don’t think that all of the smoke has cleared yet,” Mr. Eberstadt says, describing the state of the labor market. After strict lockdowns were lifted by fall 2020, “we had a pretty remarkably rapid bounce-back in the macroeconomy,” he recalls. Yet despite more than a year of plentiful job openings and rising pay, “millions fewer Americans are working or seeking work.” Their absence is compounding the labor shortage, along with the related supply crunch and price spikes.

One cause of hesitation is the virus itself. “It’s not like it was a trivial public-health emergency,” Mr. Eberstadt says. “And it’s still a public-health emergency.” Fear of Covid is keeping some people off the job. So are vaccine mandates.

But the flat-lining work rate also fits a pattern that long predates Covid. “Male labor-force participation has dropped after most recessions in the postwar era,” Mr. Eberstadt says. “When the economy recovers, it ticks up a little but never gets back to where it was.” In other words, staying out of work even during good times has become an America tradition.

Mr. Eberstadt, 66, wrote the book on this decadeslong flight from the workforce. As its title suggests, “Men Without Work” (2016) focuses particularly on prime working-age males. But the trend also applies to women and seniors, including in the Covid era.

“Overall labor-force participation peaked in 2000 at about 67%,” Mr. Eberstadt says, counting everyone 16 and older. “We’re currently about 5 points lower than that.” Population aging is a major cause of the drop, with a greater share of Americans now at retirement age. “But the work rate for prime-age people—25 to 54—has also been going down since the turn of the century.”

The decline started with men, at the same time women entered the workforce en masse. “In 1961, labor-force participation for prime-age men was at 96.9%,” Mr. Eberstadt says. Since then, “the chart looks more or less like a straight line down.” By November 2021, “the seasonally adjusted rate was 88.2%.” Almost 1 in 8 men is sitting out during his best years.

That may not sound huge, but the drop is unprecedented. “Would we think it was a crisis if the work rate fell below the Great Depression level?” Mr. Eberstadt asks. “Well you can check that box. We’re already there.”

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Women have started to backslide as well. “It isn’t as extreme,” Mr. Eberstadt says, “but we are seeing the same sort of drift.” The work rate for prime-age women peaked in 2000 at 77.3%, and it’s oscillated since then, standing around 75% today. The slowdown has come despite a long-term decline in marriage and childbearing, the factors most commonly thought to keep women out of work.

The sum of these trends is a lot of missing workers. Mr. Eberstadt estimates that if the U.S. maintained its employment-to-population ratio from 2000, we’d have more than 13 million more workers today. That would be more than enough to fill the record number of open jobs.

Instead, “America has been overtaken by the European Union” Mr. Eberstadt says. “This is not a bad joke.” Thirty years ago, America’s prime-age work rate was “nearly 10 percentage points above Europe’s. Now Europe’s is a couple of points higher than America’s.” The drop reduces household income, corporate earnings and government revenue.

The personal consequences of mass worklessness may outweigh the economic ones. Beyond the top-line labor numbers, Mr. Eberstadt’s research reveals the dreary lifestyles of a rising number of nonworking Americans.

“By and large, nonworking men don’t ‘do’ civil society,” Mr. Eberstadt says. “Their time spent helping in the home, their time spent in worship—a whole range of activities, they just aren’t doing.” His source is the Bureau of Labor Statistics’ American Time Use Survey, which compiles respondents’ self-reported habits.

What is filling idle men’s time? “There’s a lot of staying at home, it seems. And what they report doing is ‘watching.’ They report being in front of screens 2,000 hours a year, like that’s their job.” Women again trail the men, but not by much. In 2019 childless women without jobs said they spent seven hours a day in “leisure,” a category dominated by entertainment.

The pandemic probably sped up the trend by shutting people inside and making idleness easier. An abundance of streaming movies, videogames and social-media sites consume ever more of most people’s time. “This is not what Marx would have called the ‘higher pursuits’ of leisure,” Mr. Eberstadt says. “There’s something fundamentally degrading about this.”

I agree, having been in the same situation a few years ago during time away from college. I answered no surveys in my eight months of unemployment, but I guarantee that I beat the average for daily TV watching. Then I spent 14 months in a job that took all comers, selling cable service door-to-door. The gig was unpleasant and paid little, but I was far better off with something to do.

The job also gave me a look at the bleak, idle lives of many retirees. I spent hours in the homes of elderly people who lived alone. In the course of a sale we’d start by discussing TV, which nearly all of them watched for more than “full time.” When the sale was done, most would keep talking about anything and everything, glad to have someone to talk to in the flesh.

Some of these people were well past their working years. And it’s unfortunate that their families were distant. But those who had their health and little else probably would have been happier working.

Most of the workforce loss during the pandemic has been among older folks, and Mr. Eberstadt doesn’t shy from calling such early retirements “premature.” “I’m not going to judge any individual’s situation, but I can talk about general trends,” he says. “Like all other advanced Western economies, we’ve been blessed with an explosion of health since the end of the Second World War.” Covid deaths in the past two years will be a “miserable exception,” but generally, “as people live longer, they can also work longer.”

Mr. Eberstadt also cites the long-term change in the nature of work. “The revolution in technology in the workplace means that there are very few Americans who have to do backbreaking work in their 60s. And there are certain indications that work may help keep people healthy. So there are all sorts of reasons that I tend to be a cheerleader for working longer in life.”

The declining work rate has many causes. But there’s a great debate between economists who assign more blame to structural economic changes and those who fault government transfer payments.

Mr. Eberstadt leans toward the latter group. He says declining labor demand can’t be the chief cause of the dropouts, because work generally hasn’t snapped back when the economy has. From the 2008 recession until about 2016, “it was possible for accredited opinionators to say, ‘You idiot, there isn’t any work out there.’ But by 2019, that was obviously not a problem.”

Before the pandemic, “we’d passed this remarkable threshold where there were more unfilled jobs in America than there were people out of work, looking for jobs.” That’s even truer today, with almost two open jobs for every unemployed man and woman. Lack of opportunity isn’t the main reason folks are sitting out.

Of course, no job seeker is fit for every job. Some economists say the shift toward information- and service-based work has made it hard for many people, especially less-educated men, to get hired.

Mr. Eberstadt discounts that premise too. “There’s been a lot of work that does not require college—in restaurants, in hotels. There are also some things that might require a strong back but not a lot of higher degrees, like construction and trucking and things like that.” These are among the fields in which pay is rising fastest today, but few sidelined workers have jumped in.

In contrast, the increasing size and availability of government benefits have clearly helped keep people off the job. “The archipelago of disability programs has had a lot of really tragic long-term consequences,” Mr. Eberstadt says.

The share of working-age Americans claiming Social Security Disability Insurance has roughly doubled in the past half-century, from about 2.2% in 1977 to 4.3% last year. The federal government spends more on disability insurance each year than on food stamps and welfare put together, and few recipients work.

As Mr. Eberstadt writes in “Men Without Work,” it’s hard to prove that these programs “caused the male flight from work.” But he argues that they at least “financed it.” The benefits cushion the impact of dropping out.

The increase in transfers after Covid arrived amplified this effect. “I think it clearly encouraged the flight from work,” Mr. Eberstadt says. “We did this limited dress rehearsal for a universal basic income. A situation for a year and a half where there were many more people obtaining unemployment benefits than actual unemployed people.” Hiring increased in many states when the $300-a-week federal unemployment bonus ended—the result of what Mr. Eberstadt calls a “natural experiment.”

He proposes no sweeping fix for the wave of worklessness. But he notes that widespread contempt for many ordinary jobs may be making the problem worse. Journalists and economists who cheer on the Great Resignation often stigmatize work in the same breath, writing off low-paid jobs as not worth taking.

“It’s astonishingly condescending to say that some work is meaningless,” Mr. Eberstadt says. “And it shows an astonishing ignorance of how other people live.” It’s wonderful that millions of people are finding better work. But there are millions more who could fill the jobs they’re vacating, and disdain for low-skill work helps keep those people away.

Instead of stigmatizing low-skill jobs, we would do better to stigmatize idleness, especially among men. Not long ago, Mr. Eberstadt says, “the idea that 1 in 8 men should be neither working nor looking for work would have been an absolutely horrifying prospect.” Re-embracing that perspective could do a lot of good for the economy, as well as for idle Americans.

Mr. Ukueberuwa is an editorial page writer at the Journal.

Journal Editorial Report: Does Biden face stagflation in 2022? Images: Reuters/AFP/Getty Images Composite: Mark Kelly

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