Image: Chicago Booth
One of the great concerns in advanced economies is unemployment among men, and especially young men. In the United States, millions of manufacturing jobs have disappeared with the advance of technological change, reducing the demand for certain types of labour.
Graduates are faring better, and women seem more ready candidates for the service sector jobs that have multiplied in areas like communications and healthcare.
If technology takes away, however, it also gives, even to young unskilled men. Think of the ever more sophisticated and exciting entertainments that, like powerful magnets, draw boys and young men to their computers. Could this trend be reducing the labour supply among youths?
This is a question exercising Erik Hurst, V. Duane Rath Professor of Economics at Chicago Booth, the University of Chicago’s business school. Addressing graduates at the school recently he suggested this was happening by changing the value of leisure compared with (low-paid) jobs:
“Is it possible that technology has changed the value of leisure? I think the answer is a definite yes, and let me give you an example of how I am experiencing this firsthand. I have a 12-year-old son at home, and we ration video games for him. He is allowed a couple of hours of video-game time on the weekend, when homework is done. However, if it were up to him, I have no doubt he would play video games 23-and-a-half hours per day. He told me so. If we didn’t ration video games, I am not sure he would ever eat. I am positive he wouldn’t shower.”
Like Hurst’s son, many people find video games, social media and the internet are not only more fun than watching TV or going to the movies; they are also more interactive – video games can be played in real time with others. As the boys grow older, they may find that games are also more attractive than work: they increase the “cost” of getting a job.
“For low-skilled men in their 20s, employment rates have fallen by about 10 percentage points over the last 15 years—from 82 percent in 2000 to only 72 percent in 2015. This decline is staggering. You might think it’s matched by a rise in school attendance for this age group. That is not the case.
“The following may be the most shocking number I give you today: in 2015, 22 percent of lower-skilled men aged 21–30 had not worked at all during the prior 12 months. Think about that for a second. Every time I see it, that number blows my mind. In 2000, the fraction of young, lower-skilled men that didn’t work at all during the prior year was a little under 10 percent. Men in their 20s historically are a group with a strong attachment to the labor force. The decline in employment rates for low-skilled men in their 20s was larger than it was for all other sex, age, and skill groups during this same time period.”
Where do young men with computers, phones and internet but no job live? “Our basements!” says Hurst, referring to parents. “In 2014, 70 percent of lower-skilled men in their 20s without a job lived with a parent or close relative.” How do they eat? Occasionally they leave the basement to raid the family fridge. Are they married? Of course not.
“In summary, these younger, lower-skilled men are now less likely to work, less likely to marry, and more likely to live with parents or close relatives.”
Are they bothered? No. Using time diaries put out by the Bureau of Labor Statistics Hurst finds that, on average, lower-skilled men in their 20s increased “leisure time” by about four hours per week between the early 2000s and 2015.
“Of that four-hours-per-week increase in leisure, three of those hours were spent playing video games! The average young, lower-skilled, non-employed man in 2014 spent about two hours per day on video games. That is the average. Twenty-five percent reported playing at least three hours per day. About 10 percent reported playing for six hours per day. The life of these nonworking, lower-skilled young men looks like what my son wishes his life was like now: not in school, not at work, and lots of video games.”
Hurst can’t be sure that technology is actually causing the decline in employment for these young men, but he says in surveys that ask people to assess their overall level of happiness, “lower-skilled young men in 2014 reported being much happier on average than did lower-skilled men in the early 2000s … despite their employment rate falling by 10 percentage points and the increased propensity to be living in their parents’ basement.”
How this plays out later in life, though, is cause for concern. There is some evidence, says Hurst, that these young, lower-skilled men who are happy in their 20s become much less happy in their 30s and 40s. It will take them longer to get married. Their withholding of labour will have contributed to bleak economic conditions for them and any dependents. They need welfare support. They are more likely to use drugs, and in middle age to commit suicide.
Hurst put it to the future business leaders he was addressing that they need to keep this population in mind in their decision making and political lobbying.
But if the professor’s analysis is accurate, there’s another group of people who have to change their way of thinking: the parents of boomerang kids. Perhaps the best advice for them is, “Don’t allow your 20-something son to take up residence in your basement.” Without a roof over his head and a fridge upstairs, the cost of spending what should be working hours playing videos must rise to tip the scales in favour of getting a job. Any job at all.