What's going on with men's labor force participation?

Summary

The Indicator from Planet Money

Episode: "What's going on with men's labor force participation?"
Host/Authors: Adrienne Ma, Waylon Wong, Darian Woods
Release Date: January 10, 2025

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Introduction

In this episode of The Indicator from Planet Money, hosts Adrienne Ma, Waylon Wong, and Darian Woods delve into the latest trends and data from the American labor market. Titled "What's going on with men's labor force participation?", the episode explores various indicators from the December jobs report, focusing on wage growth, the duration of unemployment, and the participation rates of men in the labor force.

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Latest Jobs Report Overview

The discussion begins with a summary of the December jobs report released by the Bureau of Labor Statistics (BLS).

• Unemployment Rate: The unemployment rate slightly decreased to 4.1% (00:27).

  Adrienne Ma [00:27]: "In December, the unemployment rate ticked down slightly to 4.1%."

• Job Additions: The economy added 256,000 jobs in December, marking a strong finish for the jobs market in the last month of 2024 (00:38).

  Adrienne Ma [00:38]: "The economy also added 256,000 jobs. So for the last month of 2024, the jobs market finished pretty strong."

Despite previous concerns over a potentially softening jobs market—complicated by labor strikes and hurricanes—the latest figures indicate that employers remain optimistic about hiring.

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Wage Growth vs. Inflation

Adrienne Ma highlights a significant aspect of the jobs report: wage growth outpacing inflation for the second consecutive year.

• Average Hourly Wage: Increased to $35.69, up 3.9% from the previous year (02:48).

  Adrienne Ma [02:48]: "In 2024, the average hourly wage increased to $35.69 an hour. That's an increase of 3.9% from a year before that."

• Inflation Rate: Rose by 2.7%, slower than wage growth (03:13).

  Adrienne Ma [03:13]: "For the second year in a row, wages increased faster than inflation."

This trend is particularly noteworthy as many Americans have been grappling with the lingering effects of inflation. Adrienne raises concerns about the sustainability of this wage growth, especially in light of potential policy changes under the Trump administration, such as tariffs and mass deportations, which could exacerbate inflation (03:14).

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Duration of Unemployment

Darian Woods shifts the focus to the duration of unemployment, an essential indicator of labor market health.

• Median Duration: The median length of unemployment in December was 10.5 weeks, up about a week from the previous year (03:51).

  Darian Woods [03:51]: "The median length of time that people were out of a job in December was ten and a half weeks."

While a duration of ten and a half weeks is relatively standard outside of recessionary periods, the concerning aspect is the upward trend in unemployment duration over recent years (04:06). This prolonged unemployment can signify a cooling labor market and presents challenges for affected individuals.

Further analysis reveals that long-term unemployed individuals (those unemployed for six months or longer) are increasing, although slightly reduced in the latest report. These individuals face harder job prospects and may encounter discrimination from employers or experience skill degradation (04:43).

Darian Woods [04:59]: "Most long term unemployed people actually look pretty similar to short term unemployed people. The types of qualifications don't change much."

Additionally, research indicates psychological impacts, such as reduced motivation and fewer hours spent job hunting, exacerbating the difficulty in re-employment (05:10).

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Men's Labor Force Participation

Waylon Wong introduces the topic of men's labor force participation, an essential measure of economic engagement among working-age men.

• Recent Trend: The participation rate for men over the age of 20 is 70.22%, nearing pre-pandemic levels (07:00).

  Waylon Wong [07:00]: "The participation rate for men over the age of 20 was 70.22%. This rate is almost back to pre-pandemic levels."

Historically, men's labor force participation has been in decline for several decades. However, recent data suggests a slight uptick, prompting an exploration of underlying factors.

Key reasons cited for men's exclusion from the labor force include:

1. Retirement: Surprisingly, some men cite retirement as a reason despite being in prime working ages (07:46).
2. Disability or Illness: Health issues, including opioid use, significantly contribute to non-participation.
3. Caretaking Responsibilities: Men leaving the workforce to care for children or dependents.
4. Education: Enrollment in educational programs keeps some men out of the labor force temporarily.

Waylon Wong [07:46]: "One is retirement, which is kind of interesting given their age. But another big factor is disability or illness. And there's research suggesting that opioid use might play a role here."

Darian Woods emphasizes the policy implications of these findings, noting the need for comprehensive strategies to address health-related barriers and support caregiving responsibilities to enhance men's participation in the labor market (08:24).

Darian Woods [08:24]: "If there are a huge group of men who want to be working but can't because of health problems or caregiving responsibilities, that points to some pretty big public policy challenges."

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Conclusion and Additional Insights

Adrienne Ma wraps up the discussion by summarizing the key indicators:

• Rising Wages: Outpacing inflation, providing relief to workers.
• Extended Unemployment Durations: Indicating potential cooling in the labor market.
• Men's Labor Force Participation: Showing signs of recovery but highlighting ongoing challenges.

In a light-hearted update, Adrienne shares the results of a recent Family Feud-style poll where consumer sentiment was voted as the top economic indicator for 2024.

Adrienne Ma [09:00]: "In first place with more than half the votes was my indicator, consumer sentiment."

This segment underscores the show's engaging approach to discussing economic indicators, blending serious analysis with interactive elements.

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Key Takeaways

• Economic Strength: Despite some cooling signs, the labor market remains robust with decreasing unemployment rates and rising wages.
• Wage vs. Inflation: Continued wage growth outpacing inflation offers positive news for workers but faces uncertainty with potential policy changes.
• Unemployment Duration: Increasing duration of unemployment signals challenges that need addressing through supportive policies.
• Men's Participation: Slight recovery in men's labor force participation is encouraging, yet underlying issues like health and caregiving responsibilities require comprehensive solutions.

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Produced by: Angel Carreras
Engineering: Neil Rauch, Jimmy Keighley
Fact-Checked by: Sierra Juarez
Editor: Cait Concannon
Production: NR

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Timestamps Reference

• 00:27: Unemployment Rate and Job Additions
• 02:48: Wage Growth Details
• 03:13: Wages vs. Inflation
• 03:51: Duration of Unemployment
• 04:43: Long-term Unemployment Insights
• 07:00: Men's Labor Force Participation Rate
• 07:46: Reasons for Men's Non-Participation
• 08:24: Policy Implications
• 09:00: Family Feud Poll Update

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For more insights and episodes, visit plus.npr.org/planetmoney.

Transcript

[NPR]

Npr.

[Adrienne Ma]

This is the indicator for Planet Money. I'm Adrienne Ma.

[Waylon Wong]

I'm Waylon Wong.

[Darian Woods]

And I'm Darian Woods. It is jobs Friday. It's the day of the month where we check in on the latest jobs report and we talk about trends in the American labor market.

[Adrienne Ma]

And as always, we start off with the headline numbers. So today's jobs report from the Bureau of Labor Statistics shows that in December, the unemployment rate ticked down slightly to 4.1%.

[Waylon Wong]

That's good news.

[Adrienne Ma]

And the economy also added 256,000 jobs. So for the last month of 2024, the jobs market finished pretty strong.

[Darian Woods]

Yeah, it's looking pretty good. Yeah.

[Adrienne Ma]

And what's interesting is that for a few months there, there were some concerning signs that maybe the jobs market was softening, although those numbers were also sort of muddied by labor strikes and hurricanes. But in any case, these latest numbers suggest that employers are in a hiring mood right now. So coming up, we'll dig a little deeper and we'll also talk about the jobs indicators that we find most interesting right now. I'll talk about how a lot of Americans saw their wages rise in 2024.

[Waylon Wong]

I'm going to look at what's going on with men's participation in the labor force.

[Darian Woods]

Also why people who are unemployed are staying that way for longer.

[Adrienne Ma]

That's all coming up after the break.

[NPR]

This message comes from Schwab. At Schwab, how you invest is your choice, not theirs. That's why when it comes to managing your wealth, Schwab gives you more choices. You can invest and trade on your own plus get advice and more comprehensive wealth solutions to help meet your unique needs. With award winning service, low costs and transparent advice, you can manage your wealth your way at Schwab. Visit schwab.com to learn more.

[Adrienne Ma]

This message comes from Charles Schwab.

[Darian Woods]

When it comes to managing your wealth.

[Waylon Wong]

Schwab gives you more choices like full service, wealth management and advice when you need it.

[Darian Woods]

You can also invest on your own and trade on thinkorswim. Visit schwab.com to learn more. This is Eric Glass on this American Life. Sometimes we just show up somewhere, turn on our tape recorders and see what happens.

[Adrienne Ma]

If you can't get seven cars in 12 days, you gotta look yourself in.

[Darian Woods]

The mirror and say, holy.

[Adrienne Ma]

What are you kidding me?

[Darian Woods]

This car dealership trying to sell its monthly quota of cars and it is not going well.

[Adrienne Ma]

I just don't want one balloon to a car. Balloon the whole freaking place. So it looks Like a circus.

[Darian Woods]

Real life stories every week. All right, it's Jobs Friday. Adrian, what did you find most compelling about today's jobs report?

[Adrienne Ma]

So, for me, it has got to be wages. In 2024, the average hourly wage increased to $35.69 an hour. That's an increase of 3.9% from a year before that. And over roughly the same period, we saw inflation increase by 2.7%. So put that together. For the second year in a row, wages increased faster than inflation.

[Waylon Wong]

Interesting.

[Adrienne Ma]

And this is notable because, of course, a lot of people have been feeling the hangover of inflation over the past year. But I think it's also important to recognize that wage growth over the past couple years has actually beat inflation. And whether that will continue this year, I think, is a big question, because we're going into the Trump administration and some of Donald Trump's marquee policies. We're talking things like tariffs and mass deportation. We would expect those kinds of policies to actually make inflation worse. So this is something I think we should keep our eye on in 2025. So that's my indicator. Darian, you want to go next?

[Darian Woods]

Yeah. So one indicator from the jobs report I'm really interested in is how long people are unemployed for. The median length of time that people were out of a job in December was ten and a half. That's about a week longer than a year ago.

[Waylon Wong]

All right, so ten and a half weeks, that's like two and a half months. What should we make of that number?

[Darian Woods]

Yeah, so that time itself is fairly standard for the last couple of decades, outside of recessions. Of course, those two and a half months are very uncomfortable for the person looking for a job, but it's not a flashing red light for the economy as a whole. But what is more concerning is the trend. The amount of time that people have been out of work has been slowly rising over the last couple of years now in a cooler labor market than we were in those buoyant post pandemic months.

[Adrienne Ma]

So this sounds a little bit concerning.

[Darian Woods]

Yeah. And even more so when you zoom in on people who are unemployed for about six months or longer. This group is rising, although they did notch down a little in today's jobs report. They're considerably less likely to find a job than people who were unemployed for shorter amounts of time.

[Adrienne Ma]

How much of that would be? Because people who are unemployed longer might be, I don't know, like a different group of people, maybe with different or less qualifications that could be part of it.

[Darian Woods]

But most long term Unemployed people actually look pretty similar to short term unemployed people. The types of qualifications don't change much. One analysis found that black and older workers were more likely to be unemployed for longer though. There is, however, this interesting evidence that being unemployed for several months itself is bad for your job prospects. Some employers discriminate against people who have been unemployed for longer. And for the job seekers, their skills may have faded over time. Also, they might lose hope. There is research showing they put fewer hours into looking for jobs.

[Waylon Wong]

I mean, economists have like a formal definition for a discouraged worker, but you could be feeling discouraged long before you're officially discouraged.

[Darian Woods]

Yeah, it's almost like a continuum before you officially just give up looking for jobs entirely. And you know the overall trend of people becoming unemployed for longer periods of time, the broad trend is that when people lose a job now, they tend to take longer to find a job than say in the 1960s.

[Adrienne Ma]

Ooh, okay, so slightly sobering indicator there. What do you think, Waylon? Are you bringing up the optimism average or bringing it down?

[Waylon Wong]

Well, it kind of. I think the jury's still going to be out because I want to look at another long term trend that, where there's like a lot of different ways you could look at this. I want to look at what's going on with men's labor force participation. This is the percentage of working age men who are employed or are looking for a job. And the participation rate for men has been falling for several decades now for reasons that I'll get to, but lately it's been trending up a little bit. So in the latest jobs report, the participation rate for men over the age of 20 was 70.22%. This rate is almost back to pre pandemic levels.

[Darian Woods]

Right. So this is another way to measure how well men are doing in the labor market. I did a pretty similar story recently about men's wages and how they've stagnated or decreased for men who don't have a college degree. So in this particular metric around labour force participation, what's been going on for men?

[Waylon Wong]

Well, like I mentioned before, their overall participation rate was falling for decades before the pandemic. And a lot of the research has focused on prime age working men. So that's ages 25 to 54. In surveys, this group gives a few different reasons why they're not in the labor force. One is retirement, which is kind of interesting given their age. But another big factor is disability or illness. And there's research suggesting that opioid use might play a role here.

[Adrienne Ma]

These are like two very different stories for, like, why people might be out of the labor force. I mean, somebody, somebody just being retired versus somebody being, like, too sick to work.

[Waylon Wong]

Yeah. No, this store has a lot of angles. And then you add in some of the other big reasons that come up in the surveys. One is caretaking. You know, maybe someone stops working in order to care for young children. And then the last one I'll mention is that they're in school. It's kind of across the life experience spectrum, all these different reasons.

[Darian Woods]

I mean, that's fascinating. If there are a huge group of men who want to be working but can't because of health problems or caregiving responsibilities, that points to some pretty big public policy challenges.

[Waylon Wong]

It does. And this again relates to your episode on men's wages. Right. Where there are structural things to address. And I think these things all have to work in concert.

[Adrienne Ma]

Okay, so we've talked about some indicators to keep our eyes on long term trends with unemployment and men in the labor force and also rising wages. Thanks, Waylon, Darian, everybody being here for another jabs Friday.

[Darian Woods]

Yeah.

[Adrienne Ma]

Until next time.

[Darian Woods]

One more, two to the air.

[Adrienne Ma]

This is the indicator for Planet Money. Same time, same place. Don't touch that dial.

[Waylon Wong]

Same BLS link.

[Adrienne Ma]

Oh, before we go, a quick update. A couple weeks ago we did a Family Feud episode with our friends at Planet Money. We each made our case for which indicator was the indicator for 2024. And we asked you, the listeners, to vote on it. The results are in. Drumroll, please. In first place with more than half the votes was my indicator, consumer sentiment.

[Waylon Wong]

All right, love to see it.

[Adrienne Ma]

Applause, applause.

[Darian Woods]

Very well done, Adrian. Congratulations.

[Adrienne Ma]

Okay, so I'm not one to gloat, but I will say that it is nice to bring the Family Feud trophy over the indicator side for once. In second place, a respectable showing for the beverage curve and the Crypto Bros. But not chosen as the indicator of 2024. So maybe next year. Planet Money friends. This episode was produced by Angel Carreras with engineering by Neil Rauch and Jimmy Keighley. It was fact checked by Sierra Juarez. Cait Concannon is our editor and the indicators are production of NR.

[NPR]

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