33% of men not in the 2016 labor force live in poverty

While the unemployment rate is now under 5%, which many economists consider to be full employment, there are still many people who have not come back to the labor force. The participation rate of men aged 25-54 is particular alarming in that only 88% of them are employed or seeking a job, and the trend of male participation continues to be downward. Of those who have dropped out, 1/3 of them are now living in poverty. This percentage of workforce participation is down from 98% of them holding a job as of 1954.

What this 88% means is that millions of men, who are in the prime of their life, not only do not have a job, but they are not even seeking one. So they are considered to be out of the Labor Force. This is very concerning for both the males (as about 30% of them without a job live in poverty) and it is alarming for the overall economic growth potential of the United States.

The problem is so concerning that the Council of Economic Advisers says the male participation rate is the third lowest when compared to another developed economies, such as those in western Europe and Asia. Males under the age of 54 are just not working for some reason.

There are many reasons for this lack of labor force participation from males. The White House Council of Economic Advisers attributes some of this to the fact that the employers’ are demanding more high tech skills from potential job candidates, and many of those that are dropping out lack skills and/or education. Under or uneducated males just do not have what it takes to help an employer out. Another factor is that many companies do not train males in this age group, though this may change in 2016 and later as the demand for employees continues to increase.

Some of the more recent census data also seems to support the lack of educational attainment in males. The most recent data from 2010-2014 shows that 55% of college graduates are females and “only” 45% are males. This is a significant gap. The ration should be much closer to 50 – 50.

This lack of education is even projected to get worse. Over the next two years, up through 2017, it is projected that women will be receiving about 59% of the bachelor degrees issued in the US. That means males will only be receiving 41%. Women will also be receiving about 62% of master degrees vs. males at 38%.

So this means the skills that male workers bring to the table will be even worse than it is today. Sadly they are not even using federal government job training programs, such as those at One Stop Job Centers. Those sites could help break this alarming cycle of poverty in males under the age of 54.

This lack of college degrees is bound to lead to even more males age 25 to 54 falling out of the labor force in future years. It would be shocking if the male participation rate did not fall below the current 88%. This is bad news for the overall potential growth of the economy as a lack of qualified workers will not allow the US to grow at its maximum potential.

This is also bad news for poverty rates. The Council of Economic Advisers states that about 33% of the males under the age of 54 that are not in the workforce are living in poverty. This is one of of three people! It is incredible that someone would choose this route. So these males are making the decision that they would rather live in poverty then work. Something needs to change, and change quickly, for males to have a chance to be successful in the future.

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