Millennial men leave a perplexing hole in the hot U.S. job market

Nathan Butcher is 25 and, like many men his age, he isn’t working.

Weary of long days making minimum wage, he quit his job in a pizzeria in June. He wants new employment but won’t take a gig he’ll hate. So for now, the Pittsburgh native and father of young children is living with his mother and training to become an emergency medical technician, hoping to get on the ladder toward a better life.

A decade after the Great Recession, 25-to-34-year-old men are lagging in the workforce more than any other age and gender demographic. About 500,000 more would be punching the clock today had their employment rate returned to pre-downturn levels. Many, like Butcher, say they’re in training. Others report disability. All are missing out on a hot labor market and crucial years on the job, ones traditionally filled with the promotions and raises that build the foundation for a career.

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“At some point, you can have a bit of an effect of a lost generation,” said David Dorn, an economist at the University of Zurich. “If you get to the point where you’re turning 30, you’ve never held a real job and you don’t have a college education, then it is very hard to recover at that point.”

Men — long the United States’ economically privileged gender — have been dogged in recent decades by high incarceration and swollen disability rates. They hemorrhaged high-paying jobs after technology and globalization hit manufacturing and mining.

The young ones have fared particularly badly. Many of them exited high school into a world short on middle-skill job opportunities, only to be broadsided by the worst downturn since the Great Depression. Employment plummeted across the board during the 2007 to 2009 recession, and the 25-34 male cohort fell far behind their slightly older counterparts.

Although employment rates have been climbing back from the abyss, young men have not caught up again. Millennial men remain less likely to hold down a job than the generation before them, even as women their age work at higher rates.

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Their absence from the working world has wider economic consequences. It marks a loss of human talent that dents potential growth. Young people who get a rocky start in the job market face a lasting pay penalty. And economists partly blame the decline in employed men for the recent slide in marriage rates and increase in out-of-wedlock births. Those trends foster economic insecurity among families, which could worsen outcomes for the next generation.

A changing template

Butcher has a high school diploma and a resume filled with low-wage jobs at places such as Target, Walmart and a local grocery store. He’s being selective as he searches for new work because he doesn’t want to grind out unhappy hours for unsatisfying compensation.

“I’m very quick to get frustrated when people refuse to pay me what I’m worth,” he said. His choosiness could be a generational trait, he allows. His mother worked to support her three kids, whether she liked her job or not.

“That was the template for that generation: You were either working and unhappy, or you were a mooch,” he said. “People feel that they have choice nowadays, and they do.”

There is no one explanation for what’s sidelining men — data suggest overlapping trends — but Butcher sits at a revealing vantage point. His demographic has seen the single biggest jump in nonparticipation among prime-age men over the past two decades: About 14% of 25-to-34-year-olds with just a high school degree weren’t in the labor force in 2016, up from 6.4% in 1996, according to a Federal Reserve Bank of Kansas City analysis by economist Didem Tuzemen.

It’s difficult to pin down whether the demographic wants to remain on the sidelines or is kept there by a dearth of attractive options. They could be choosing to stay home or enroll in school because well-paying, nondegree jobs in industries like manufacturing are fewer and farther between. But it isn’t clear why lost opportunity would hit young men hardest.

Other social changes could be exacerbating the trend. Better video games might make leisure time more attractive, some economists hypothesize, and opioid use might make many less employable. Young adults increasingly live with their parents, and cohabitation might be providing a “different form of insurance,” said Erik Hurst, an economist at the University of Chicago.

So the question looms: Is the group’s employment decline permanent? Survey data may offer clues.

Mind the gap

Young men have been reporting higher rates of school and training as a reason for their non-employment in a Labor Department survey, and a large share say that disability and illness are keeping them from work. Those factors explain much of the wider post-2007 participation gap between the 25-34 group and their older counterparts, according to an analysis by Evercore ISI economist Ernie Tedeschi.

Applications for Social Security Disability Insurance — and the payouts it has issued — have been falling as the nation’s economy has improved, so young men offering disability as an explanation might start working again, Tedeschi said.

As for school and training, it’s not obvious that the move toward higher enrollment will reverse — or that it should.

“Education doesn’t necessarily strike me as a policy failure,” Tedeschi said.

Butcher, for one, hopes EMT training will be a first step toward a career in healthcare. He wants to earn enough to provide security for his son and daughter, who live with their mother.

“It’s a good start to a career,” he said.

Smialek writes for Bloomberg.