People are checking out of the workforce at growing rates, economist says

Men of prime working age have disappeared from the labor force in recent years at a rate not seen since the Great Depression, though the problem isn't as severe in Minnesota, an economist who studies the phenomenon said this week.

Most of them are choosing not to work, said Nicholas Eberstadt, economist at the American Enterprise Institute, and the effects of their choices are ­rippling through American society.

Even worse, a similar development may now be happening with women, Eberstadt told an audience hosted by the Center of the American Experiment, a Golden Valley-based think tank, on Wednesday.

"Work rates have been dropping for women since the year 2000, but work rate [declines] for men have been going on for a whole lot longer," he said. "In 2015, it was almost one in six guys who had no paid work at all."

Eberstadt last year published a book about growing rates of economic ­inactivity for men in their 20s to mid-50s. And he gained attention earlier this year with an article in Commentary magazine headlined "Our Miserable 21st Century" that showed how the year 2000 marked a turning point in the nation's economic growth and employment trends. In that article, he noted that work rates for prime-age women are now back to where they were in the late 1980s.

The chief effect of the departure of large numbers of people from the labor force is to reduce the U.S. economy's growth potential.

Minnesota, which has a higher percentage of people working than the nation as a whole, is the second-lowest state for labor inactivity. Just under 7 percent of the state's prime working-age men were no longer trying to work. Only Iowa was better, at 6 percent.

But the problem continues to grow in the state, and the Center of the American Experiment is launching a multiyear project called "Great Jobs without a Four-Year Degree" that is designed in part to get more people working. The think tank's president, John Hinderaker, called it "the most important project they've ever done."

The program's goal is to get younger Minnesotans aware of post-high school opportunities outside of enrolling in a four-year ­college. This includes raising awareness for apprenticeships, associate's degrees, occupational certificates, job training in the military and more.

"There's all these great things going on, but people don't know about them, in different parts of the state and industry," said Kathy Kersten, senior fellow for the center. "We'd like to be a vector for these success stories."

In one effect of the departure of people from the workforce, Eberstadt said his research found that unemployed men spend a significant portion of each day in leisure activities, including time spent with video games and in front of computers and smartphones. "It's a 2,100-hour-a-year proposition. Akin to a full-time job for the unworking man," ­Eberstadt said.

Incarceration and felony charges are a significant aspect in underemployment numbers from Eberstadt's findings. One in eight adult men not currently behind bars has a felony conviction, which hinders their ability to find a job or purchase a house.

"The ones who have been to prison are way more likely to be out of the labor force than the ones who only have an arrest in their background," Eberstadt said. "And the ones with an arrest in their background are way more likely than the guys who have never had trouble with the law."

Eberstadt said he was unsure why the relationship existed, but said it could be due to hiring discrimination against ex-cons, or lost workplace skills while in prison.

At the end of his presentation, an audience member asked where hope can be found in the grim statistics.

"The turnaround comes when people are committed to shining the spotlight on this problem, and come from all over the political spectrum and say this huge problem can't be invisible anymore," Eberstadt said.

Alex Van Abbema is a University of Minnesota student on assignment for the Star Tribune.