Moneybeat: Missing men

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MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: It’s time now to talk business, markets and the economy with financial analyst and advisor David Bahnsen. David heads up the wealth management firm the Bahnsen Group, and he is here now. Good morning to you.

DAVID BAHNSEN: Good morning, Nick, good to be with you.

EICHER: Well, David, you highlight something in this week’s Dividend Café that I think should shock all of us—that in the United States today, nearly 7 million men between the ages of 25 and 54 … these are the prime working years … these men are out of work and are no longer looking for work. That number is stark, and it doesn’t hit you in the same way that a percentage might—at least for me.

Seven million young men. That clobbers me when I hear it. It’s one in 10 of the entire male workforce in that key age bracket.

Historically, that group has been fully employed. About 98 percent, as you say. Now it’s down to 89.

And this is no data blip—this is a secular trend, a generational shift. Let’s talk about what’s driving that and what it might mean for our economy and culture.

So let me ask this way: we hear policymakers talking about jobs, and you’ve pointed out that they frame it as a demand-side issue—“not enough opportunities,” etc. But you say the real problem is not demand but supply, that millions of men are simply opting out … or just giving up. If we took that seriously, starting with a policy question, what would a truly supply-side labor policy even look like?

BAHNSEN: I think that the problem in answering the supply issue from a policy standpoint is that it’s a combination of what is public policy, and then let’s call it cultural policy. In other words, I think that this is never going to be fixed only with public policy.

Churches play a role here, the families and what kind of device management they have. You know, I make the point that the amount of non physical leisure that is just basically staring at a screen that single men without kids do. And I put a chart and a study from the University of Maryland that came out last year on it. It’s startling.

You know, there’s issues of concern here in trajectory across all sorts of demographics, but I highlight this issue with prime working age men, because the data highlights it. It’s 65 point 2 million men in our country that are between 25 and 54.

And you have a certain amount of people that are removed because of severe disability or whatnot. But basically, when you get to the labor participation force, that inactivity is 10.9% that’s where we’re getting the 7 million. And it’s a trajectory over time.

What we’re talking about here is non recessionary, isolating just men who are able bodied, and seeing this trend, and I don’t know how anybody can deny that it’s become a systemic, secular problem.

And when we look at public policy, I would suggest that one of the things that is screaming in our face is reform of the social safety net, the access to disability when people are healthier, they’re living longer, the percentage of people taking disability claims in white collar jobs is just as high as blue collar so this isn’t related to a physical injury from the workforce.

Now, do those things happen? Of course they do. They’ve always happened. And I think society needs to have solutions for people that have some sort of physical inability to work. And I understand that.

But do I believe that we’ve had that kind of an increase in mental infirmity? I do not. And yet the very, very liberal access to disability benefits is a massive problem, and I think a lot of people are afraid to talk about it.

I would add other forms of transfer payments. So how are they able to get by being removed from the workforce and answering a question on a survey, do you want to work? No, I do not. That inactivity, I think, is a major problem. It does not speak to 100% of the gap, but it speaks to a very, very high percentage.

And leads me to believe that we face the possibility of a worker shortage across varying degrees of skilled and lower skilled professions that would have a tremendous impact on our economy.

EICHER: I’m really amazed—we talked about this before we went on the air—that you pulled these statistics from the Bureau of Labor Statistics report, the thing we always look at each month to get the unemployment rate. Publicly reported, publicly available.

I wonder if that’s why Charlie Kirk had the success he had. He resonated so much with young men he said were purposeless, drifting. And when you heard his widow Erika Kirk forgive that young man, she emphasized that young man, she described the kinds of guys Charlie was trying to build into.

It’s fascinating that this manifests itself in this way. Yet it’s such an unreported story.

BAHNSEN: Well, I think that one of the reasons it isn’t talked about more when the data is also readily available is because believing we have a demand side issue is constantly begging for government intervention. That’s the Keynesian approach. Is we need to stimulate aggregate demand that creates more jobs.

So let’s go do a public works project. Let’s do a chips act, let’s do an infrastructure bill. Let’s do government spending. These things all drive some form of demand, and we want to always make sure we don’t have a job shortage.

And certainly I’m all for having a robust economy that doesn’t lack for jobs. I happen to believe that when our country has traditionally had those moments, they prove to be very short lived, because we have so much anti fragility in our robust free enterprise system.

But see, the thing I’m talking about calls it a cultural and spiritual epidemic that doesn’t allow for an easy fix of Let’s pass this law.

You know, Charlie Kirk is a really good example in the more recent years, but I would argue, Nick, you could go back, some of us old enough to remember Mark Driscoll’s popularity 20 to 25 years ago. It was very similar an appeal to somewhat disenfranchised young men.

And so the church has been aware of this for a long time now. Is the church promoting earlier marriages, work habits, self reliance, self discipline, a robust ambition. I don’t know that we are not to the degree we ought to be.

EICHER: Coming back to this: the idea that 37 percent of inactive men are married compared to 58 percent of men overall—that’s something to take note of. I want to ask whether you see family breakdown as the cause. This is kind of a chicken-or-egg question: is family breakdown the cause of men leaving the workforce, or is it a withdrawal from work that causes the family decline?

BAHNSEN: Yes! And it’s not an evasive answer, but this is part of my economic worldview that I find ingrained in Scripture, that all things are either negative or positive feedback loops.

We are constantly and forever when it comes to our productive activity, either creating virtuous or vicious cycles, and it is irrelevant what exactly happened. First, like in 1968 men adopted a bad attitude towards family, and then the work thing came next. The point is, these things are feeding on each other and self reinforcing in the worst possible ways.

And I’ve used this line many, many times that employable men are marryable and marryable men are employable. Look, there’s going to be issues that come up sometimes even a married man, there’s going to be incredibly productive guys that are single, of course.

But what I’m looking for is this anti fragility, where you build robustness. When a man tragically, sadly, unfortunately, loses his job and is married, there is an embedded incentive to go replace the work.

I mean, I often say I didn’t become a man until I got married, because even though I was a pretty responsible worker, pre married and had been through a lot in my life already, I didn’t know the degree of responsibility that came with caring for another whom you love unconditionally.

That provides a whole different approach to life, and it motivates you in your work. It motivates you in your calling. It causes you to think about more serious, important things.

But I can understand, even as a very driven, focused guy I’ve been in my life, I can understand why a pre married man loses his job and becomes disgruntled, disenfranchised, and can find solace with video games.

And I’ll tell you, there’s a lot of other repercussions that are outside of my portfolio here, besides the culture and the economic side that just getting into the health of it, people talk about, well, mental health.

How could someone be mentally healthy? Sleeping until noon, smoking pot, playing video games, laying on a couch, not getting sunshine, not eating healthy, not having this spiritual call to go do something, serve others, build something, and then we say, well, everyone’s self esteem is bad. Yeah. No kidding.

EICHER: David Bahnsen, founder, managing partner and Chief Investment Officer at The Bahnsen Group. He writes regularly for WORLD Opinions, and at dividend-cafe.com. David, thanks, have a great week.

BAHNSEN: Thanks so much, good to be with you.

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