Monday, July 31, 2006

Men Not Working

Reminding me of one of the earliest threads on Vox Baby--the failure of the labor force participation rate to rebound as the unemployment rate dropped in 2003-04--Louis Uchitelle and David Leonhardt garner a Voxy with "Men Not Working, and Not Wanting Any Job" in today's New York Times.

The thrust of the article is that plenty of the men who are not working and not currently looking for work seem to be content to keep it that way. If you were around during that earlier discussion in October 2004, the article won't likely change your mind, but it does what good feature writing should--it provides interesting stories to fill in what might be missed in the raw data.

Here are the two main vignettes in the story:

“I have come to realize that my free time is worth a lot to me,” he said. To make ends meet, he has tapped the equity in his home through a $30,000 second mortgage, and he is drawing down the family’s savings, at the rate of $7,500 a year. About $60,000 is left. His wife’s income helps them scrape by. “If things really get tight,” Mr. Beggerow said, “I might have to take a low-wage job, but I don’t want to do that.”

and
“To be honest, I’m kind of looking for the home run,” said Christopher Priga, who is 54 and has not had steady work since he lost a job with a six-figure income as an electrical engineer at Xerox in 2002. “There’s no point in hitting for base hits,” he explained. “I’ve been down the road where I did all the things I was supposed to do, and the end result of that is nil.”

Instead, Mr. Priga supports himself by borrowing against the rising value of his Los Angeles home. Other men fall back on wives or family members.

It's hard to know if the unemployment rate is really "missing" them in measuring the strength of the labor market. The article then discusses the role that Social Security's Disability Insurance program is playing in supporting these men, drawing a comparison with a phenomenon that is already widespread in Europe:
In the European Union, 14 percent of men between 25 and 54 were not working last year, up from 7 percent in 1975, according to the Organization for Economic Cooperation and Development. Over the same period in Japan, the proportion of such men rose to 8 percent from 4 percent.

In these countries, too, decently paying blue-collar jobs are disappearing, and as they do men who held them fall back on government benefits for income. But the growth of subsidies through federal and state programs like disability insurance has happened largely without notice in this country while it is a major topic of political debate in Europe.

“We have a de facto welfare system as Europe does,” said Teresa Ghilarducci, a labor economist at the University of Notre Dame. “But we are not proud of it, as they are.”

Well put. The article also gives something of an answer to my concerns about a low savings rate:
Meanwhile the Beggerows’ savings are shrinking. This year, for the first time, they have drawn down so much from their 401(k)’s they have been forced to pay early-withdrawal penalties. But Mr. Beggerow resists being stampeded.

“The future is always a concern, but I no longer allow myself to dwell on it,” he said, waving aside, in his new and precarious life, the preparations for retirement and old age that were a feature of his 30 years as a steelworker.

“When you are in the mode of having money coming in,” he explained, “naturally you think about planning and saving. And then when you don’t have the money coming in, you think less about the future, at least money-wise. It is still a concern, but not a concern that keeps me up at night, not in this life that I am now leading.”

He's not exactly the canonical life-cycle saver, nor does he perceive this to be the healthy part of the business cycle. The article concludes with a discussion of the role that a higher incidence of prison records may be having in this process.

Read the whole thing.

25 comments:

Anonymous said...

My current life just flashed before my eyes as I read this... I'm one of those women who's been supporting an "I'm not taking some crap job that is a waste of my time" man. Three years to be exact. We are not married, nor are we ever going to be, because I'll be throwing him out soon. If he had any friends left or any place to go, I'd have tossed him long ago. The funny part is, he doesn't understand how this behavior has destroyed my level of respect for him and thus our relationship. He thinks this should be just like women who work while their man finishes medical school. When his ship comes in, he's going to shower me with diamonds and we will live like kings. The problem is that he just decided this on his own and didn't bother to get my buy in. Now, for those of you thinking this is no big deal, let me reveal that we are both in our 40's. I own my own home and have carried all the water for us for the past 3 years. I wanted a partner in life, not a dependent teenager. Being a grown up requires a level of responsiblity for paying the bills and carrying the load in life. If you have to take an ego hit to make the mortgage payment, then that's what you have to do. I don't want to work either, but I have grown fond of having a roof over my head and food in my refrigerator....

bristlecone said...

Interesting both men profiled were Boomers. Boomers have had everything handed to them their entire lives, unlike the WWII generation (who lived through the Depression and saved the world) and the Gen X'ers, who grew up knowing they were on their own.

This spoiled generation will, no doubt, not be too proud to expect me and my fellow X'ers to support them.

TallDave said...

Mostly, people are leaving the labor force to become self-employed. That's why the gap between the Household Survey and the payroll survey keeps getting bigger.

Internet, low interest rates, low cap gains: there's never been a better time to start a business.

Shannon Love said...

Status is a huge motivator in men's working lives. Much of the disparity in the career outcomes between men and women reflect men's greater wiliness to sacrifice other parts of their lives to get higher status, higher paying jobs.

I suppose some men might be tempted to think of themselves as prematurely retired instead of work avoiding. I imagine that since few people actually live in communities anymore, fewer people actually known if any particular person is actually avoiding work. Hence, less stigma.

PGL said...

I see Megan of Instapundit has an interesting take that these men are awaiting another good (if not better) job. Over at Angrybear, I dubbed this underemployment.

Anonymous said...

Work is overrated. Nevertheless I would love to work at something that uses my talents. As it is, it is something I must do myself.

As you get older, there are fewer options. You become settled. Moving across country becomes less realistic leaving your home, family, friends, and community. Commuting for hours less desireable. Employers see high costs in pay and benefits and don't want to hire someone for less since they would expect them to be disgruntled or inferior. They also see them as less flexible, less atune to the new, less enthousiatic and more skeptical, and a permanent relationship since they figure they will be sued if they lay you off before retirement. One would like to say that further education might be desireable but it becomes uneconomic later in one's career. I guess 40 is the new 60. Yes, early retirement is an option. Certainly it beats looking for work which has to be far far worse than any job.

My current life just flashed before my eyes

Something like half of couples said they would divorce if their partner lost their job.

Boomers have had everything handed to them their entire lives

Spoken like a truly spoilt Gen X'er.

the gap between the Household Survey and the payroll survey keeps getting bigger

Except it hasn't. Of course for us self-employed, it doesn't matter whether we get paid or not, so long as we enjoy what we do!

Arun Khanna said...

Bequests in a will for offsprings are declining in the U.S. That potentially explains changes in the life cycle of savings.

Conserve_Liberty said...

Interesting - I regularly shake my head in wonderment at my churchmate former IT-type (downsized in a merger) who would rather live on the dole for $9600 a year, than become a grocery checker - for $36K plus benefits!!

I've always said that, if some financial disaster befell us, I would gladly bag groceries and live in a walkup apartment.

CL

Anonymous said...

No remarks yet as to a key source of the funds to support the 2 men featured in the article. Home equity.

That source is going away for awhile. House prices have almost stopped rising and in many areas are set to fall substantially. It looks like the average may well decline over the next 12-18 months.

IF either of these gents has an ARM the interest rate will be adjusting up and the bank will want a leg as well.

save_the_rustbelt said...

"...Mostly, people are leaving the labor force to become self-employed. That's why the gap between the Household Survey and the payroll survey keeps getting bigger...."

That is just crap.

Around here, we call them "lawnmower entrepreneirs.

save_the_rustbelt said...

Many of these men have two serious handicaps...

1) they are over 40, and

2) their employment history obviously includes union membership, which is the kiss of death on a job application.

If the job market were as good as the Bushite fantasies neither would be an issue. But in a slack market these guys are easy to pass over.

save_the_rustbelt said...

"...Boomers have had everything handed to them their entire lives, unlike the WWII generation..."

Hey punk, the only thing handed to me was shovel and some lessons on finishing concrete.

Working in a stell mill for 30 years is hardly "had everything handed to them."

Go back to your mom's basement and play some more video games.

Roland Patrick said...

As both Jim Glass and I pointed out in the earlier discussion, the late 1990s through 2000 is not a legitimate base for comparison. That was the dot com boom/bubble, when employers were letting people bring their infant children and/or pets to work. Anything to entice people to take jobs.

Expecting labor force participation to return to what it was then is unrealistic.

Shannon Love said...

save_the_rustbelt,

Your work might have been physically taxing but in terms of finding a job, keeping and job and being shielded from competition, the silent generation and the boomers did it have easy compared to Gen-X'ers.

Once you became a member of compulsory union, the labor laws made it illegal for anyone to compete against you for your job. The companies themselves operated as de factor monopolies protected by high barriers to entry and tariffs. Even if a broad economic downturn caused a layoff, you had the right to claim your old job again when things heated back up. The skills you learned in the first year of your job were likely the ones you used in your last year.

I never had any such protections and never could have regardless of the political environment. I work in the computer industry where competition and change are so brutal that even very successful companies only survive 5 years. Everyone in a company from the janitor to the CEO knows that if they don't work their asses off that the market would eat them all alive.

I grew up on a farm and know first hand how hard physical labor is but I can tell you that pouring everything into product while under the markets guns only to watch it strangle in the market over a period of months is much, much harder.

Gen-X's have never known an era of job security even in the midst of the greatest economic booms and we never will.

Roland Patrick said...

From Katherine Bradbury's July 2005 paper:

http://www.bos.frb.org/economic/ppb/2005/ppb052.pdf

on page 20 there is a table titled 'The Shortfall in Participation in this Recovery', which tells that comparing this recovery 44-47 months after the prior cyclical peak to the prior recovery (1996), we have participation rates of:

Men aged 35-44: 1996; 92.2%, 2005; 92.4%
Men aged 45-54: 1996; 89.1%, 2005; 87.3%
Men aged 55+: 1996; 38.3%, 2005; 43.4%

Which would seem to be telling a different story from what is in the NY Times article.

muckdog said...

Another thing that might describe why folks are choosing not to look for work (or taking jobs paying less) is that Americans' net worth is at the highest level ever. In addition, once a certain level of wealth has been amassed it then has momentum on its own.

Alan said...

Greetings!

My name is Alan Beggerow, one of the people in the NY Times article. I've been surfing around the 'net just to see the reactions from folks about it. Just call me curious, for I've been called everything else. Let me say that the article represented what I said spot-on. Louis Uchitelle, the reporter that interviewed me is a professional all the way. As such, he only included information in the article that he deemed appropriate for the subject. There is much that went unsaid. Check out my blog where I clarify some things.

http://winkle52.blogspot.com/

Alan Beggerow

Anonymous said...

I don't know where you people in denial are, or what you're thinking (or smoking LOL).
I'm 51, have a degree in electrical engineering, and haven't been able to find a reasonable (I did try truck driving) in 2+ years.
I tell people there isn't any work out there in my field, and they are flabbergasted. "But the news says millions of jobs are being created! What's wrong with you?", is the typical response.
Then I ask them to look at the postings for EEs in the Arizona Republic (or local Phoenix paper).
They are shocked when they find NONE.
LOL
Not only are there no jobs in my field, nobody wants to hire a 51 year-old for anything less than minimium wage.
Keep living in your dream worlds, people. And enjoy it, because it could all end soooo fast.

Anonymous said...

Well at least there is honesty in NONE. You don't have to waste your time trying. All too often I find numerous listings with nary a response. The worst are the perpetual ones that somehow are never filled, often for years at a time.

Teri said...

I've seen the same activity way back in the 70s. Our area had a major dam construction project. People were hired at good wages. When the job ended, they thought they should still be able to get the same wages again.

Things are different, folks, for the over 40 crowd. I see a lot of the counterparts of these guys in call centers with me. They used to have good jobs and now they scramble for $8 an hour jobs. Education, technical skills, none of that stuff helps when you hit a certain age. They want younger workers (and I'm not implying that jobs are easy to come by for some of those folks either.)

These guys are at the same point I was at when I lost my tech job. You think it's temporary at first and that at some point,you'll find a job paying close to what you used to make. When that doesn't happen, you look for one that pays less and spend your time at interviews explaining why you would want a job that pays so much less than you used to make. When the unemployment runs out, you can take a minimum wage job or do what these guys did. The minimum wage job never works into anything that pays a lot better. We've allowed the industries of this country to be gutted and the jobs outsourced to benefit primarily the CEOs of large companies. Things have been bad for several years now and will turn worse as the housing slump kicks in.

Dave F said...

I am one of the disenfranchised/marginalized ex-prisoners generally referred to in the NY Times article.

I am a college professional who spent ten years in prison for killing a pedophile (a supposed “pillar of the community” in my wife’s family) who was trying to murder me. I was the only witness to the pedophilia involving my young children. Today, I do not have a single thread of a relationship, an atom of property, or a penny of wealth from my “previous life.”

I have an old-fashioned “work hard all day” work ethic (a la “Message to Garcia,” which probably none of you have ever read or heard of). I have given up on returning to my previous profession (one recruiter even laughed in my face). I have sent thousands of resumes to hundreds of employers. I have tried returning to school to earn another degree. I have worked alongside immigrant workers (some of them illegal) and earned immigrant worker’s wages. I have been “used, abused and tattooed” by employers. Well into middle age, I have busted my back swinging a sledgehammer, working on roofs, and moving furniture to earn a few bucks.

I continue to suffer from PTSD from the attack. I have suffered through years of accumulated unemployment. I have a life-long disadvantage regarding employment and residency, but I learned to live an extremely austere life from my experiences in prison (so I get by). I have no health insurance, no safety net, no plans to retire … and no one to turn to for help. When I find myself in a discussion about burial versus cremation, I tell them that I’m going out with the trash (I can’t afford anything else, and I don’t care). Someone once asked me if I wanted to “share my life with someone” (ie, have a love interest). I replied that I didn’t want my own life, so why would I want to share it with someone else.

I am a very good worker and neighbor and all-around good person (and I even consider myself as a Christian) but, to society, I’m just another Morgan Freeman in The Shawshank Redemption.

One in 37 Americans (almost 3%) have either been through prison or are in prison (and almost all of them are coming out). Society cannot exile them, but they do the next best thing … they are marginalizing and disenfranchising them to the max. The justice and prison systems are very broken, and society lacks the initiative to fix them because it is broken too.

Sarah Priga said...

I am appalled by the lack of work ethic that is represented in this article. I am Mr.Priga’s oldest daughter and would like to say that "choosing" not to work and then glamorizing it in an article is reprehensible. His statements are untruthful – he was not left with custody of his 3 children from a divorce in 1996, and his disdain for work that was beneath him left myself, his parents (my grandparents) and my mother to care for and provide for my brother and my sister (by 1996 I was in college, living on my own AND WORKING). He did not have to quit working to care for my brother and it was not until recently that my sister (she was 22) moved back in with him because she also feels she does not “need” to work. The financial and emotional impact of growing up living with someone who does not fulfill even the most basic responsibilities is extensive and greatly impacted myself, my grandparents, my mom and the rest of the family. How can a person continually borrow money and neglect financial obligations while he waits for his “home run”. To hit a home run you have to step up to the plate. I am grateful that I had positive examples that showed me to get where you want in life and be a positive influence in society you have to work hard. I am deeply saddened to see this misreported information in a major news outlet.

Anonymous said...

My husband of 4 years has been self employed all his life in the music business. Two years into our relationship he closed up shop, and works from home. He has remortgaged the house to pay off debts, doubling the monthly payment. He said he has no intentions on getting a job, doesn't think he could deal with it. We are in deep debt, and my wage alone doesn't nearly cover it.

Dustin said...

This is a bit late; it seems like the dust has settled on this forum. But in the off-chance she returns, might I ask Sarah Priga to leave a way to contact her? I am an old friend, living in Vienna, and have been looking for her for a few years now. Thanks.

Andrew Samwick said...

Dustin,

I saved her e-mail, so send me an e-mail at andrew.samwick@dartmouth.edu and I can put you two together.

Andrew