Why Men's Earnings Have Been Falling Since the 1970s - and What It May Mean

One of the most profound changes in the economy is largely the result of unintended consequences.

Household incomes have been in decline for over a decade. Some argue this has been going on for almost 30 years, since the period when the economies devastated by WWII - Germany, the UK, France, Japan et al - began to realize the fruits of their Herculean recovery efforts.

Much has been written about this worrisome trend, its reasons, antecedents and potential solutions. But buried in that data is another, socially disruptive trend - men's earnings have been in decline relative to women since the 1970s. And due to structural changes in the economy may not recover in the near future.

Older men - Boomers, et al - have been exiting the work-force largely due to lack of opportunity. The impetus has been the decline of male-dominated industries in manufacturing and construction, as well as the hollowing out of middle management brought about by technology and the competitive demands of the global economy. The sectors that have risen - health care, government work, services - are less reliant on physical labor and do not bear the legacy of industrial traditions so are more open to women.

This could have a profound impact not just economically, but socially. Data already demonstrate that in the US, 60% of university students are women. They do better in school and may, in many circumstances, be more productive employees. We may already be seeing some of the implications of these trends in the decline of marriage, the loss of interest in religion and the disaffection with government. In other words, belief in and support for institutions that have been the pillars of civilization may be eroding.

These changes in themselves may be neither wholly bad or wholly good. But they will impact the way that people relate to each other, to the businesses that cater to them and to the institutions that attempt to govern them. Could get interesting. JL

Derek Thompson reports in The Atlantic:

The most recent Census report confirmed one of the worst facts about the U.S. economy.

Typical household income fell by 1.5% in 2011. But that's not the worst thing. Median household income fell for the second consecutive year, despite being two years into a recovery, and now sits 9% below its all-time high in 1999. But that's not the worst thing, either. There were 46.2 million people living under the Census's definition of poverty -- e.g.: a family of four with an income of $23,021 or less -- and income inequality is rising again. These are all tragedies, but I would argue there's something even worse going on.
Real male earnings are lower than they were in the early 1970s (these figures discount government transfers):

What's happening? As Michael Greenstone and Adam Looney explained in a report for the Hamilton Project, median annual earnings for men are actually in worse shape than the Census shows. When you calculate the earnings of all men -- not just those working full-time -- you see an awful 28 percent plunge in median real wages from 1969 to 2009.

What's happening is that men are dropping out of the the full-time work force in frightening numbers. Greenstone and Looney use Census data to estimate where they're all going. Most of the increase comes from older men retiring early and middle-aged men collecting disability or failing to find work. This raises the possibility that, in addition to be discouraged by the labor force, many of these men are also taking advantage of the growing safety net to stay out of the work force.

As Hanna Rosin explained in her article "The End of Men" and her book of the same name, the erosion of male-dominated industries has fed this long-term trend. Nearly half of the jobs created in the last 15 years have been in government, health care, and education, three industries that are too big and diverse to call "female-dominated" but nonetheless have historically employed higher shares of women. Manufacturing employment hit its century-high mark in the mid-1970s and has since dropped to its lowest level since the 1930s.

Behind the poverty numbers, the saddest part of today's Census report isn't a new piece of information. It's the confirmation of 30 years of awful wage growth for men, even fully employed men. In other words, this is not merely a reality of Obama's America, but also both Bush's America and Reagan's America (real male wages clearly grew under Clinton). Men are falling behind, and it's not particularly clear that they -- or anybody -- have the tools or ideas to end the trend.