Regardless of political affiliation, recent American presidents commonly say that the nation needs to win back manufacturing jobs lost to overseas relocation. “Where is it inscribed that America cannot reclaim its position as the world’s manufacturing hub?” queried President Biden recently. He has pushed for policies that penalize corporations for moving jobs abroad and that incentivize job repatriation. Biden’s predecessor Donald Trump pursued a similar objective with different means, modifying the tax code to encourage companies to bring back profits earned internationally and imposing tariffs to protect domestically produced goods. Despite their ideological differences, both presidents share a similar view on infrastructure and its capacity to create jobs in construction and related sectors. Trump proposed a $1 trillion infrastructure initiative to get Americans back to work as the Covid pandemic waned; Biden enacted a program allocating approximately $550 billion toward local infrastructure projects.
Yet an unexpected hurdle has impeded these ambitions: finding enough workers. When Biden’s infrastructure law passed, the construction industry was already grappling with some 500,000 vacant positions. The money pouring into government plans then triggered a competition for workers between privately funded and government-backed ventures, driving up wages and thus reducing how much work the infrastructure bill subsidizes. “We’re in this situation where we’ve already got this skilled labor shortage, and now we’ve got all this money that’s coming in,” remarked an official with the trade group Associated Builders and Contractors last year. Since then, the shortage of construction workers has swelled by another 150,000 positions. And while America has about 1.4 million fewer industrial jobs than it did 20 years ago, the U.S. Department of Labor estimates that manufacturers have roughly 750,000 unfilled positions. That number, one industry group calculated, could surpass 2 million by the end of the decade.
Behind these shortages is a steady increase in the number of adult Americans not working. Rising for years, the number exploded during the Covid lockdowns. The proportion of working-age men out of the workforce—unemployed and not actively seeking employment—has reached unprecedented levels. Though the rates lessened somewhat as Covid abated, they still linger distressingly above historical norms. A contributing factor is the expansion of generous government welfare programs that discourage recipients from seeking work, such as Social Security Disability Insurance payments—now collected by 3.7 percent of all working-age adults, a significant increase from 1.1 percent in 1970. Further, multiple rounds of Covid relief from the Trump and Biden administrations appear to have led many adults to quit the labor market outright, even as the economy reopened.
But the workforce woes run deeper. Ever more adults are unemployable because of worsening social dysfunction, changing youth attitudes toward work, and university and public school failures to prepare students for labor-market realities. Drug legalization has made it harder to find laborers who can pass drug tests—essential to work in industries like construction and transport—leading to worker shortages for key jobs, including truck drivers. A crime spike, meantime, will likely create a new generation of convicts, among the toughest people to employ when they reenter society. Soaring mental-health problems add to the ranks of the unemployable. And many firms hesitate to hire new college grads because they often lack basic skills, starting with knowing how to communicate and function within a group, and often have unrealistic expectations about pay and benefits.
Demographically, the surge in unemployable Americans arrives at a particularly inopportune moment. The retirement of the baby-boomer generation, the largest in the country’s history, has brought an unprecedented demand for labor. Even in optimal circumstances, subsequent generations would struggle to bridge this gap. While American firms may try to adapt through innovation, the burgeoning population of the unemployable presents not only an economic conundrum but also an impending social catastrophe. Among men, those who are either disengaged from the workforce or have never been part of it are less inclined to marry and establish families. Individuals entirely detached from employment exhibit elevated rates of depression and often fall prey to self-destructive habits. Their overall involvement in community activities shrivels.
Addressing a multifaceted problem of this magnitude poses formidable challenges for the American future.
The crisis has been building for decades. Following a peak of 67.3 percent in 2000, the labor-force participation rate started a somewhat erratic descent, plummeting to a low of 62.4 percent of adults in 2015 and falling further to just 60.8 percent during the pandemic. Even now, the rate remains lower than it has been, excluding the lockdown period, since the economic downturn of the mid-1970s. And these dismal figures obscure a longer-running decline in men’s labor-force participation. After World War II, their participation rate hovered near 90 percent, with nearly 95 percent of adult males aged 25 to 54 employed. Around 60 years ago, though, male employment rates began steadily to drop, largely independent of economic cycles.
For decades, the impact on employers was cushioned by a steady rise in women joining the workforce, climbing from around 40 percent in the mid-1960s to a peak of 60 percent in the late 1990s. This rate remained stable for over a decade, partly due to the welfare reforms of the 1990s propelling more women into employment. Yet, since 2010, women’s labor participation rate has faltered, too.
Expanding government benefits correspond with the declines. Two programs in particular, Social Security Disability Insurance (for workers with a long-term disability) and Supplemental Security Income (for nonworking adults without income), support more and more Americans. The disability rolls have shot from 1.5 million in 1970 to 7.6 million today, and would be even higher except the federal government stopped processing disability applications during Covid, creating a temporary drop in numbers and a massive backlog of applicants (see chart). The supplemental income program, introduced in 1974 for adult nonworkers—many with zero work history—has grown by several million recipients. The expansion partly stems from a relaxation of medical criteria, enabling more workers to qualify for disability, including for mental-health and addiction issues. Federal drives to combat fraud, or to transition recipients back into the workforce as medical advances improve health outcomes, have led to prolonged legal disputes. Courts have ruled against periodic reviews of recipients’ statuses, deeming them unlawful.
Direct disability benefits are only part of the support that the nonworking receive. Most are also eligible for food stamps, government health insurance, and housing subsidies. Many nonworkers live in households where someone else also gets government aid. The Census Bureau’s Survey of Income and Program Participation found that about 63 percent of working-age men outside the labor force lived in households getting government benefits. “How do prime-age [non-working] men support themselves?” social thinker Nicholas Eberstadt asked in his 2016 book Men Without Work. “The short answer is, apparently, they don’t. Relatives and friends and the U.S. government” do.
Extended government jobless benefits during Covid maximized the disincentives. Starting with the CARES Act in March 2020, the federal government provided an extra $600 a week for the unemployed and direct one-time household payments that started at $1,200 per adult and $500 per child. In early January 2021, before leaving office, President Trump extended Covid relief payments of an added $300 per week until March of that year; President Biden extended them again until September, even as the economy recovered. Unfortunately, the longer individuals are jobless, the more likely they will stay that way. In a mid-2022 survey by the U.S. Chamber of Commerce, nearly a quarter of unemployed respondents said that government aid had led them not to look for work. Even though most pandemic restrictions were disappearing by mid-2022, two-thirds of those who had lost their jobs during Covid said that they were only somewhat active or not very active in seeking new work. Nearly 10 percent of the unemployed decided to retire—many earlier than originally intended—aggravating labor shortages. Helping make this possible was the astonishing $2.6 trillion surge in the country’s household savings rate, in part funded by Covid aid. More than 100 million adults are neither working nor looking for work, up from about 95 million pre-pandemic.
Covid lockdowns intensified social troubles that further detach people from work. Drug use went up during the lockdowns. The percentage of workers testing positive for drugs hit a ten-year high in 2021, according to Quest Diagnostics. Since 2017 alone, Quest found, workers and job applicants screened for pot whose results were positive rose 50 percent. Today, 24 states and the District of Columbia have legalized recreational marijuana use, up from just eight in 2017, which doubtless reinforces the trend.
Though several states have banned employers from testing for pot or acting against an employee solely for testing positive, marijuana remains a federal government Schedule I controlled substance—the most restrictive of classifications—though the Biden administration has proposed changing it to a Schedule III drug, with fewer restrictions. Companies that work as federal contractors thus still test for drug use, and employers in various labor-intensive industries still see cannabis as a potential workplace hazard and continue to screen for it. A National Institute on Drug Abuse report found that employees testing positive for marijuana were involved in 55 percent more industrial accidents, suffered 85 percent more injuries, and had 75 percent higher absenteeism than workers who didn’t test positive.
Workers regularly using cannabis, even the legal kind, aren’t just potentially hazardous to others. They are likely also short-circuiting their own careers. A 2017 National Academy of Medicine survey detailed various problems with regular marijuana consumption, including diminished school performance and reduced earning potential. Businesses in states that have legalized pot report growing frustration with hiring workers. After Colorado legalized recreational pot, one of the state’s biggest construction firms got so desperate to find workers able to pass a drug test that it started recruiting out of state. The owner of an Arizona-based microchip company told a local newspaper that absenteeism was such a chronic concern at the firm’s Colorado facility that he had stopped expanding operations there.
Employers are right to worry. In trucking, with a quarter of a million unfilled positions, nearly 41,000 drivers tested positive in 2022 for THC, the active ingredient in pot—a 32 percent climb in one year. Since 2020, more than 175,000 truckers have failed a banned-substances test, drawing suspensions. And 120,000 or so of these truckers have yet to finish—or, in some cases, even enroll in—a return-to-work initiative that lets them regain driving privileges. Many seem to be dropping out.
Marijuana advocates argue that suspending such workers is too harsh, but the National Transportation Safety Board has recommended that legal pot come with warnings about driving impairment after a study confirmed the dangers. “We’ve long known about the devastating impact of alcohol-impaired driving, but [the NTSB study] shows that impairment from other drugs, especially cannabis, is a growing concern that needs to be addressed,” an NTSB board member told the press. The Insurance Institute for Highway Safety found that road crashes rose by more than 5 percent in states that had legalized pot compared with neighboring states that didn’t.
Skyrocketing addiction rates for deadlier drugs like opioids are behind yet more workers leaving the job market. A 2022 National Bureau of Economic Research working paper estimated that the number of people with opioid and methamphetamine addictions expanded 17 percent faster during the pandemic than addiction growth previously, adding nearly 2.8 million to the rolls of those with severe substance-abuse issues. The NBER paper suggested that between 9 percent and 26 percent of the surge in individuals exiting the workforce during Covid could be attributed to substance abuse of some kind.
Pandemic America also witnessed a sharp elevation in crime rates, especially after the riots that erupted following George Floyd’s May 2020 death in Minneapolis and the subsequent nationwide movement to defund the police. Though millions remained at home during the lockdowns, reducing residential burglaries, America’s homicide rate rose 34 percent from 2019 through 2022, motor thefts went up 22 percent, and burglaries at commercial establishments increased 11 percent. Shoplifting rocketed upward in America’s biggest cities—up 64 percent in New York and 61 percent in Los Angeles from mid-2019 to mid-2023.
As social disorder intensifies, more marginalized individuals, particularly male adolescents and young adults, get drawn into illegal activities, eventually entangling themselves in the criminal-justice system when society inevitably reacts against disorder. This backlash has already commenced in numerous American locales, leading to a resurgence in local jail populations after an initial decline during the pandemic.
For the job market, the implications are clear. Ex-felons are hard to employ. A recent Rand study estimated that half of all unemployed men in their thirties have past criminal arrests, and by 35, some 46 percent have been convicted of a crime. Data from the Bureau of Justice Statistics suggest that only about one-third of federal convicts find employment within four years after release. Even among those finding work, earnings are well below median income levels. Ex-offenders also tend to switch jobs frequently, struggling to stay employed. Progressives often blame this on businesses’ reluctance to hire former criminals. Many states and cities have subsequently banned companies from asking job seekers whether they’ve ever been convicted. But that strategy has backfired, research shows. In areas where businesses can’t inquire about criminal records, they’ve become broadly reluctant to hire young minority applicants lacking college degrees; the firms fear the unknown.
The real obstacle to hiring ex-offenders is not business bias but the job candidates themselves. Between 40 percent and 70 percent of male prisoners suffer from antisocial personality disorder, defined in a Nature article as “a life-long condition involving habitual irresponsible and delinquent behavior.” Among the chief characteristics: “failure to conform to law, failure to sustain consistent employment, manipulation of others for personal gain, deception of others, and failure to develop stable interpersonal relationships.” Further, a Bureau of Justice Statistics report found that nearly six in ten state and local prisoners had been diagnosed as drug abusers or drug “dependent.”
These personality deficits help explain the poor track record of ex-offender employment initiatives. In March 2018, President Trump launched the Reentry Council, a joint effort of several federal agencies to help ex-offenders get hired. Speaking about the challenges that the group faced, its director, David Muhlhausen, said that the entire field of prisoner reentry, as it often is called, suffered from a lack of quality research on what worked and what didn’t. Noting one study that found that 83 percent of state prisoners were rearrested at least once within nine years of leaving prison, he said: “In a nutshell, there are very few employment programs that show promise for reducing recidivism.”
The few programs that do boast above-average results require vast resources and intensive counseling, as well as cooperation among local groups that supervise and train ex-cons and the businesses that might hire them. While they often succeed working with the most employable former prisoners, these efforts are hard to replicate nationally and don’t offer the deeper counseling that many onetime criminals need in order to work again.
Severe personality disorders and widespread mental-health challenges are also shrinking the larger pool of employable individuals, a phenomenon particularly conspicuous among younger adults. In 2020, mental-health issues rendered 29 percent of federal disability beneficiaries—about 2.4 million people—incapable of employment. Among them, 1.4 million struggled with depression or psychotic disorders. Most of those recipients had been enrolled in disability programs before the pandemic. One notable trait among SSDI recipients with mental-health-related disabilities is their relatively younger age, compared with other disabled beneficiaries. They tend to remain on the benefit rolls for long periods, contributing to their growing representation among disabled workers.
Mental-health problems worsened during the Covid lockdowns and have remained elevated since. An early 2023 poll found that a third of American adults still were experiencing pandemic-related anxiety and depression. A McKinsey American Opportunity Survey taken in May 2022 found that 17 percent of those unemployed and not looking for work blamed their situation on their mental state. Young adults again appear particularly distressed—nearly twice as likely to report issues as those aged 50 and up. In a survey last fall, nearly half of young professionals said that they struggled with anxiety and depression and that work had taken a negative toll on them. More than four in ten said that they planned to quit their current jobs. Gallup pollsters describe these millennials’ attitudes toward work as “more lost” than previous generations. A November 2022 Gallup poll found that nearly 70 percent of Generation Z and millennial respondents claimed to be stressed at work, and 34 percent said that they were burned out, compared with only 40 percent of baby boomers who reported being stressed at work.
Many young Americans have simply checked out. One study estimated that about 14 percent of 25-year-olds aren’t working or even looking for a job—a rate about double that of baby boomers at a comparable age. While some of this variance can be attributed to prolonged educational pursuits, young workers also cite “self-reported disability or illness,” which includes issues like drug addiction, more frequently as reasons for their lack of interest in seeking employment, compared with previous generations at the same life stage.
A rise in workplace anxiety among young Americans corresponds with employer complaints about them. In roundtable discussions organized by the Federal Reserve Bank of St. Louis in mid-2023, many business executives “identified a lack of soft skills among younger workers” as a reason for the workers’ employment woes. In a recent survey of American hiring executives, many said that young applicants often struggled to make eye contact, showed up for interviews dressed inappropriately, had weak communications skills, and responded poorly to feedback. About 20 percent reported that they’d had a recent college graduate show up for an interview with a parent.
How did millennials develop such shortcomings and gloomy views of work? One explanation: young adults don’t assess risk well. Though we live in one of the safest times in history, Generation Z believes that “risk is everywhere they turn,” writes political scientist Gabriel Rubin about an ongoing study assessing the origins of young people’s mental-health crises.
In their bestseller The Coddling of the American Mind, Greg Lukianoff and Jonathan Haidt argue that society has “unwittingly taught a generation of students the mental habits of anxious, depressed, polarized people.” Parents bear some blame, but schools at all levels are at fault, too, Lukianoff and Haidt maintain. Gen Z has grown up learning to “catastrophize.” Old wisdom—like the notion that what doesn’t kill you can make you stronger—gets turned on its head, so that any stress or conflict is seen as potentially devastating. Hence the demand for safe spaces and the agitated reactions to mundane workplace scenarios. Young workers wind up ill-suited to embracing economic opportunities because they can’t see work as fulfilling or even fun. “Yes, fun at work. Imagine that. Gen Z can’t,” business school professor Suzy Welch recently observed of her students. For them, she added, “Work is what you do when you can’t be doing what you want.”
American schools’ response to Covid made all this worse. Long lockdowns and periods of remote learning instilled fear and dread in teens—among the least vulnerable demographics to the virus—while also stunting their academic growth. U.S. schools stayed closed far longer than did their counterparts in other industrialized countries, averaging approximately 71 weeks of remote learning, compared, for example, with just 15 weeks in Spain and 38 in Germany. By fall 2022, perhaps unsurprisingly, polls showed more than half of American high school kids battling depression and a third reporting that home distractions disrupted learning. Math and reading scores have plunged, with the equivalent of about four months of schooling essentially missing, on average, for most students. For poorer kids, learning losses represent nearly an entire school year.
Alarmingly, many school districts have responded by lowering standards, which can mislead parents into thinking that their children haven’t fallen behind. One recent study documented a wide gap between what test scores show about falling performance and what parents think. That may be one reason that some school districts report widespread problems in getting parents to take advantage of federally funded tutoring catch-up programs for their kids. Only about 20 percent of the $190 billion in Biden’s Covid recovery program for schools has gone to helping students close the learning shortfall. Schools appear to have spent as much on upgrading facilities as they did on tutoring.
All this has potentially seismic economic effects. Harvard’s Center for Education Policy Research estimates that the aggregate learning loss of K–12 students during Covid will total about $900 billion in forgone earnings over students’ subsequent work lifetimes. To what extent the combination of learning deficits and rising mental problems tips marginal students into the category of nonworkers is hard to estimate, but the trends are distressing.
What can be done about the workforce quandary? Reforms should start with ending government disincentives to work. The welfare-to-work movement of the 1990s showed that smart policies could reengage people, even after long periods of government dependency. Some states and cities, including New York, have lately gone in the opposite direction, so that welfare rolls are growing again. Efforts to require able-bodied adults to work for other government benefits such as food stamps have never gained traction, but such reforms are ever more pressing.
Similarly, an increasingly dysfunctional Social Security disability system needs reform as its trust fund runs out of money. Among the options are so-called early-intervention initiatives. These help the temporarily disabled get back to work before they become permanently unemployed—aiding workers unable to perform physically demanding jobs, say, to transition to less arduous careers instead of remaining on disability. We also need to halt efforts to expand nonwork support, including so-called universal basic income (UBI) programs that pay people regardless of work status and that have gained currency on the political left and even on the right. Some advocates counterintuitively claim that these plans, which have been piloted in several locations, will help get nonworking people working again, but the effects have been otherwise: UBI programs reduce work and worsen dependency.
America’s schools once effectively readied the country’s young people for adult life, including work. Generations found their way into trade and technical careers through high schools, but the college-for-all movement undermined those projects. Schools that have restarted them, sometimes in tandem with local businesses, are producing highly trained, well-paid young workers. But compared with similar training programs in other industrialized countries like Germany, America still has too few.
The drive to integrate ex-convicts and individuals grappling with severe mental-health conditions into the workforce presents considerable obstacles. Optimal reforms should aim at preempting these challenges. The relaxation of criminal penalties and enforcement has unleashed a surge in social disorder, ensnaring more vulnerable young individuals in criminal actions and intensifying mental-health crises. The escalating use of marijuana has correlated with a marked rise in debilitating psychosis. Decriminalizing harder drugs has wrought widespread havoc in Oregon. Like the Hippocratic principle in medicine, the foremost tenet of governance should be to avoid causing harm. Beyond that, it is imperative to concentrate efforts on assisting those capable of rejoining the workforce. A notable minority of ex-offenders possess immediate employability after release. We need to devise strategies to encourage businesses to give them a chance. One policy worth exploring is “crime and safety insurance” for businesses, mitigating potential losses incurred from hiring ex-cons.
Beneath the current disengagement from work lies a misguided belief that technological advances and greater business productivity afford individuals the luxury to stop working and simply “enjoy” life. But research consistently demonstrates that those engaged in work lead markedly happier lives than the nonworking. An early study even revealed that lottery winners who maintained fulfilling jobs wanted to keep working, despite their windfall. The rationale is straightforward: work is deeply ingrained in human history, with each of us being beneficiaries of generations who toiled and left enduring legacies through their labor. America retreats from work at great peril.
Top Photo: MarioGuti / iStock / Getty Images Plus
