I recently read an eye-popping article by business writer Andy Serwer, who reported that nearly one-third of working-age men in America “aren’t doing diddly squat. They don’t have a job, and they aren’t looking for one either.” All total, that’s nearly 30 million men.
“How do they live? What are they doing for money? To me, this is one of the great mysteries of our time,” wrote Serwer. He takes a shot at solving the mystery by coming up with several theories:
- Unemployment insurance
- Early retirement, pensions, disability, and lawsuits
- Savings, trading stocks, and bitcoin
- Working for cash and the under-the-table economy
- Living off family members
- Illegal work
- Living off the land
To be sure, leaving the workforce early because one has worked hard to be financially secure should be commended. But in looking at his list, it’s clear to see how bad public policy has had a hand in increasing the numbers of America’s non-working men.
Take unemployment insurance. The CARES Act provided an extra $600 a week for unemployed workers, in many cases putting more money in their pockets than the jobs they held before the pandemic. Moreover, the CARES Act also extended unemployment benefits to categories of workers who wouldn’t normally qualify for unemployment insurance. At the end of August, there were nearly 11 million job openings across the country, even as our unemployment rate stood at 5.2 percent. No doubt there are legions of couch potatoes enjoying staycations courtesy of taxpayers. The extra benefits ended in September, so let’s hope that the Help Wanted signs will soon disappear.
Pensions also caught my eye. PRI has long studied the unfunded liability crisis looming in California and elsewhere. Thanks to lavish union-negotiated retirement benefits, many government workers retire long before age 65, collecting much of their pre-retirement pay. Indeed, the CalPERS site boasts that “Service retirement is a lifetime benefit. In most cases, the employee can retire as early as age 50 with five years of service credit.” Steve Greenhut, author of Plunder, which documents the excesses of public pension systems, called these non-employees America’s “ghost workforce.”
Lawsuits also made Serwer’s list. Each year, nearly $3 billion is paid out for medical malpractice, wrote Serwer. We’ve long argued at PRI the need for tort reform. Frivolous lawsuits raise the cost of doing business and force countless small businesses to shutter their doors. The consequence of these lawsuits are often non-working able-bodied men, enjoying the fruits of court victory.
Serwer also believes that tens of thousands of men are off the Bureau of Labor Statistics grid because they’re working for cash. Underground economies flourish because of overregulation and high taxes – both for which California is renowned. In March 2019, Gov. Newsom created a task force to crack down on California’s cash paying businesses. But so long as red tape and high taxes exist, the underground economy will thrive. Legal or not, BLS will never really know what portion of the 30 million men are actually paid under the table.
Many unemployed men get through life by living off their relatives, notes Serwer. In California, it’s not uncommon for young men to live with their parents well into their 20s due to the high cost of housing. Bureaucratic tangles, lawsuits, and the California Environment Quality Act have quashed housing construction in much of the state, driving the cost of existing housing ever higher. Living rent-free with three home cooked meals a day? That’s enough for any young man to hesitate to leave the nest and seek work.
Last but not least, Serwer believes that illegal work, including drug trafficking, is keeping men from making an honest living. The majority of drug trafficking offenders, Serwer reports, are male (nearly 85 percent) and their average age was 36 years old. Police budget cuts, soft-on-crime legislation, and progressive prosecutors make crime pay — and pay very well — discouraging men from seeking legitimate work.
It wasn’t too long ago that a man with a good job who supported himself and his family was considered the American way. Then government stepped in to “help”, only to encourage generations of men to drop out of the workforce.
Rowena Itchon is senior vice president of the Pacific Research Institute.