Not enough people are working

The national unemployment rate is at a 50-year low. Even in Mississippi, the rate is much lower than usual, which should mean that a lot more people have jobs.

Surprisingly, it may not. The federal Labor Department says that only 83% of adults in their prime working years, aged 25 to 54, are either employed or actively looking for work.

This figure is up from a few years ago, but it is far lower than labor force participation rates in Great Britain, France, Germany, Japan and Canada — all of which say 87 to 88% of their 25- to 54-year olds are working or job hunting.

The statistics get even more interesting when you measure them by gender. About 75% of women aged 25 to 54 are in the work force, close to an all-time high. But the percentage of men working has fallen steadily since 1960, when it was 97%, to 89% today.

In a recent hearing, senators asked Federal Reserve Chair Jerome Powell what’s going on. Some of his questioners wondered if America’s generous social safety net was encouraging people not to work. Powell, however, found different and more logical reasons.

Addressing government assistance, Powell said that when adjusted for inflation, the benefits that people receive when they’re out of work have been declining for several years. That means recipients may get a little more money, but not enough to keep up with rising prices.

Other economists told The Washington Post that government policy has focused more on assisting low-income people who work than it has on people who do not have a job. A 2018 analysis by two economists found that since 1990, most safety net gains for children have gone to families with earnings and families with incomes above the poverty line. The only exception is aid for the elderly and the disabled.

It’s also worth noting that many European countries with more generous public assistance policies than the United States have seen work force participation increase since 2000. That would imply no direct link between government aid and work.

Powell, the Federal Reserve leader, told senators that declining school achievement is keeping more people out of the work force.

“Educational attainment in the United States, which was once the highest, has really fallen relative to our peers,” he said. “And particularly among lower- and middle-income people, the level of educational attainment has really plateaued. And that’s the key thing for keeping in the labor market these days.”

Powell added that the rise of opioid abuse isn’t helping, but his larger point is that there are fewer job options for men without college degrees, and the pay for these jobs has not been keeping up. It’s easy to see why this would make work less attractive to more people in their prime years.

The obvious solution is more blue-collar jobs with better pay. That’s a tough assignment, even in good times, because of the ongoing evolution from an industrial economy to one based on technology and service. Workforce training has taken on a growing importance in recent years, and these programs will play a big role in the development of skilled labor.