The Mystery of the Missing Workers: Why So Many Americans Aren’t Working#

Okay, let’s talk about something that’s been a bit of a puzzle in America for a while now. You might remember about four years ago, the US and the whole world saw a crazy spike in unemployment – the most intense ever recorded. In today’s fast-moving news, that feels like ancient history. But what hasn’t gone away is what that period left behind.

Right now, there are over 10 million people in America who aren’t working, they’re not studying, they’re not retired, and they’re not in an institution like a hospital or prison. They’re just… doing nothing. This trend got faster because of COVID, but it’s actually been happening for decades. Since the 1960s, roughly 0.1% of American men have basically given up on work every single month, never to come back.

So, the big questions are: Why are so many people consistently giving up? And more importantly, how on earth are these folks surviving without a job in this economy?

Looking at the Numbers#

To give you an idea, back in October, Mississippi’s labor force participation rate was hovering around 54%. Compare that to the national rate, which was over 62%. There were checks on two job websites finding over a thousand jobs combined available right then.

These folks aren’t working, and they’re not even looking for a job. And these are the very people we need to figure out how to get into the workforce.

Why Aren’t Some Americans Getting Back to Work?#

This is the million-dollar question. There are lots of normal reasons someone might not be in the group counted as “in the labor force.”

• They might have retired.
• They could still be studying for qualifications.
• Some people are simply too sick to work.
• There are stay-at-home spouses.
• Members of the military are clearly working, but they don’t officially count in these stats.
• And, of course, there are really rich people who just don’t need to work to live comfortably.

These groups have always been around. But there’s a new group growing alongside them: people who have simply given up.

The Fastest Growing Group: Men Aged 25-55#

The group of people dropping out of the labor force that’s growing the quickest is men between the ages of 25 and 55. Men in this age range would typically be right in the middle of their careers, their most productive years. But more and more of them aren’t working at all.

Now, part of this can be explained simply by the fact that more women have entered the workforce. In fact, up until about 2008, women were joining the workforce almost as fast as men were leaving it. Some men have indeed taken on roles as stay-at-home husbands, taking care of things while their wives or partners focus on their careers.

Pew Research says that young women are now earning significantly more than young men in most major US cities. Young women are also graduating college at higher rates than men. So, it makes sense that a growing number of men might be letting go of traditional gender roles and doing work that isn’t officially counted as typical employment.

If that were the complete picture, honestly, there would be absolutely nothing wrong with it. But let’s be real – having a stay-at-home parent, no matter their gender, is a luxury most people just can’t afford these days, especially young people. And remember, young people are the fastest-growing part of this dropout group.

So, there’s clearly something else going on here.

Researching the Trend#

Nicholas Eberstadt, a political economist, wrote a book called “Men Without Work.” He tracked this trend of working-age men just giving up on work and, in doing so, largely stepping away from society. His book came out in 2016 and matches up perfectly with a 2022 study on this same issue done by the Federal Reserve Bank of Boston.

The Fed study found that men without a college degree, in particular, were dropping out of work because their potential earnings were much lower than their peers who did have a four-year degree. Now, that’s not totally surprising; generally, people with college degrees expect to earn more on average. But the study found that the gap between these two groups had widened significantly, especially between college-educated and non-college-educated men.

This part was actually surprising to the researchers. You might think that higher-income workers would be the ones dropping out more often – if they earn a lot, they could marry someone who also earns a lot or save up quicker for early retirement. Instead, they found the opposite: the group earning less money was more likely to drop out of work.

(And yes, before you ask, the study did account for the fact that people not working wouldn’t be making an income, so they’d automatically be in the non-working, low-income group).

Since men are now overrepresented among those without college degrees, they formed the biggest group of people giving up on work. While it’s easy to focus on this being just a gender issue (and honestly, that would make for a more attention-grabbing YouTube video), there are bigger forces at play.

The reason lower-income people were dropping out wasn’t complicated: they simply had less to lose and more to gain. Most jobs that don’t require specific skills can’t really buy you a comfortable life almost anywhere in America anymore. And as more people tie their identity and how they feel about themselves to their work and income, it’s gotten much harder for some to accept service jobs they see as less impressive.

The Difficult Choice#

Honestly, consider this choice for yourself. If you were given these two options, which would you choose?

• Option 1: You could scrape by working a few minimum wage jobs. You’d be on your feet dealing with customers and managers all day. It’s a job where you probably won’t move up much without a degree. You wouldn’t have much time or energy left at the end of the day to work on personal projects. Plus, it might be a job you’re not exactly proud to tell your friends, family, or someone you’re dating about.
• Option 2: You could scrape by using whatever government help or family support you could find. Maybe work on some side projects in your spare time. Or just fill your day with cheap ways to have fun, like playing video games.

I like to think I value hard work, but I’ve also been lucky enough to have what many would see as a prestigious career and a successful business. Given these specific options, how would you choose to spend your day? (If you’re brave enough, share it in the comments so the internet can call you a “bootlicker” or a “lazy Zoomer,” depending on your answer!)

The second option also has another perk: if someone asks what you do, you can just say you’re “working on a new business” or “taking some time off.” The Fed study found that this was one of the big reasons people didn’t want to take jobs they felt were “beneath them.”

Why This Matters#

No matter how you feel about this issue, it affects all of us. We have millions of people out of work while, at the same time, we’re seeing major worker shortages in important industries. This trend isn’t likely to get better unless something changes.

So, to really understand what’s happening, we need to learn how money works. We need to figure out how these millions of people are getting by without working and what it means for the rest of us if they never come back.

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How Are They Surviving? What Are They Doing?#

Aside from a few lucky ducks who made a ton of money young and retired early, most of the people who aren’t working or looking for work are living pretty simple lives.

Eberstadt’s research went deeper than just the big picture numbers. He really tried to figure out what these people were actually doing with their time.

Now, the next few minutes might be a bit of a “hard to swallow pill.” While Eberstadt can sometimes be very direct with how he presents the facts, his research and ideas touch on some really important parts of our society.

He found, using national surveys, that the average man who wasn’t working or looking for work was doing pretty much what you might expect: sitting at home, spending most of their time behind a screen.

• Most of them contribute very little to taking care of others in the household.
• They were underrepresented in community activities like volunteering, even though they had way more free time than people who worked or studied.

He also challenged the idea that lots of these men had just become stay-at-home spouses, handling chores to support a working partner – a role traditionally filled by women. Unfortunately, according to federal survey data he put together, the average labor force dropout spent the exact same amount of time on household care as the average employed woman. They also spent 5 minutes less per day on household care than the average unemployed man (who you’d think would be spending some time looking for a new job).

So, what were they spending their time on? Leisure activities and sleeping.

The average person who had dropped out of the labor force was also much less likely to have children or a partner. Eberstadt suggested two reasons for this:

• Reason 1: Having children, dating, and a family life are expensive commitments that people trying to get by without a job simply couldn’t afford.
• Reason 2: People with a family to support are naturally more driven to go out and earn money, even if it means taking a job a single person might not consider.

Of course, this is based on a large number of people, and there are definitely people with children who don’t work, and plenty of couples where neither person is in the labor force.

But even without the costs of a typical family, daily life is still expensive.

Surviving Without Income#

Government benefits for people who are out of work usually only go to those who are actively looking for a job or who cannot work because of an illness or disability. The exact rules for these programs change from state to state in the US, and obviously, outside of America, different countries have different levels of social support. But this trend is strongest in America, and most of the research has happened here.

As anyone who’s ever tried to apply for government assistance in America can tell you, proving you qualify can be really, really hard. The only real exception was maybe during the COVID stimulus period, where arguably the requirements were too low. Saying you need unemployment checks because you’d rather stay home all day vaping and playing Fortnite just isn’t going to work with Uncle Sam.

What Eberstadt did find, though, was that it had become much easier for people to qualify for disability payments. In most cases, you don’t have to be actively looking for work to keep receiving these payments.

In his book, he points out how tough it was to find consistent data on all the different government programs that might be helping these people. And let’s be clear, the point isn’t to unfairly blame or point fingers at aid meant for some of the most vulnerable people in society. The point is the trend itself.

According to data from the Department of Social Security, annual disability insurance payments have grown faster than all their other major programs. The data is presented as a table, but think of it like a line chart that just keeps climbing compared to the others.

The Underground Economy#

Dr. Dwight R. Lee, another economist, suggested a big factor that Eberstadt might have missed: a lot of these men might actually be working, but they’re doing it in the underground economy. This informal economy in the US is estimated to contribute about $2 trillion, which is roughly 12% of the US GDP.

This could involve people doing things like working informal cash jobs to avoid taxes and minimum wage laws, or even getting into outright illegal stuff like shoplifting or selling drugs.

The Picture Painted by Research#

So, putting the research together, it paints a picture of this growing group of individuals. Some seem to be scraping by with help from friends, family, and government programs, spending their days playing video games, and potentially being a burden on society. It’s not exactly a glowing description, but to be fair, there are definitely people living this way. And when you’re looking at big trends across a whole country or even the world, you have to make some broad observations.

But it’s important to know that the researchers studying this issue are actually very sympathetic to the tough spot these people are in. They seem genuinely interested in finding and fixing the reasons behind these problems. I’ll definitely put a link to Eberstadt’s full book in the video description if you want to read it, as well as some great interviews with these men themselves. Hearing their stories directly puts a more human face on these tough feelings.

Honestly, I can personally see how, if just a few things had gone differently in my own life, I could have easily ended up in a similar comfortable trap. And most of you watching could have too, whether you realize it or not.

But this still doesn’t fully answer the biggest question: Why is this becoming more and more common? Most people, if they had the choice, would prefer a nice, stable job with enough income to live comfortably, beyond just basic survival. Yet, every single year, more and more people are dropping out of even trying to look for a job.

Contributing Factors (No Single Answer)#

There isn’t just one simple reason why people are giving up, but several things are definitely playing a part:

• Competition for good, prestigious jobs has gotten much tougher.
• At the same time, pay for basic jobs hasn’t kept up with the cost of living.
• Technology has made it much easier for people to withdraw and isolate themselves from others.
• Other broader social issues, like the opioid epidemic, certainly haven’t helped this trend.
• One of the most harmful factors has been the idea (you could call it a myth) of a skill shortage. This has led to a strange economy where millions of people are jobless, but there are also millions of jobs that companies can’t find people to fill.

I’m actually writing an article about how the idea of a skill shortage has been used in a way that has undermined the traditional career path for millions of Americans. You can read it in my free email newsletter – the link is in the video description. Things like the “rise and fall of the tech bro” show clearly that even the most talented and driven workers might have less control over their careers than they like to think.

So, if you found this topic interesting, check out that article or the next video to keep learning about how money works.