but not impossible she never saw anything in three dimensions it had no depth perception a not insignificant challenge in an era at traveled by horses and carriages. but similar to the disfigured allen to fall tim love with julia despite her disability. they fell a mother and stayed that way nearly 40 years. . .

the chair and political economy here at aei and author of the book men without work. my colleague is david wessel for fiscal and monetary policy. david and i are going to try something a little different today. david is going to be the emcee of our events today. we will see how this experiment in the process unfolds. do you want to take over? >> i thought usually vmc starts

first. >> i broke the rules. rules. >> w. >> we want to welcome the aei to the neighborhood. as one of my colleagues said on massachusetts now aei is to the left of brookings. i'm really glad nick has done this both because i think that the issues of the great recession have to a large extent not completely passed and it is a number of chronic conditions that show it isn't something that is a pre-existing condition that preceded the great recession and got a little worse and so it requires something to make the economy grow faster.

if you go to a website called fli.do and enter a code, aeievent and write your name and type in your question and if we get to it we will upload it. >> i expect you to discipline me if i don't discipline myself. >> the labor market than the turn-of-the-century vienna employment to population ratio and work rate around the turn-of-the-century dropped what i would regard as a dire grammar

as i fill in the chart. this is men and women together since the year 2,000. what i pointed out in my book is that this decline of the work rate for men has been going on for a long time. it's been going on for at least 50 years. the lower line is the work rate for men over the age of 20. the green line is the prime working age man cometh a key 25 to 54 group. you can se see that's been stumbling downwards for half a century. here's another way of looking at that employment problem this is the proportion of non- workingmen of prime ages.

ratcheting up with every recession going to a new worse normal. right now up to 15% have no paid employment. if you want to compare it to the depression, you can and it's not a happy comparison. if you look at the rate in 2015, they were about two percentage points lower than prime age man in the 1940s at the tail end of depression. if you look at the group 20 to 50-years-old likewise looks worse today than the tail end of the depression. so, it's not wrong to describe the work problem as if it was the depression scale.

if we of the work rate of 1965 there would be about another almost 10 million was paid for in america. think about how much difference the country would be. so, the main reason for this collapse has been declining labor force participation. it's been to withdraw of men from the workforce. it's a very incomplete measure of what's going on. today it is three times as many men who've left the workforce altogether as well as who are unemployed without a job and looking for works of this exit dominates the work problem from today and it's meant to show how the u.s. looks at international

comparisons. actually the drop in the labor force participation in america has been worse than in countries like greece or france or countries that have had a sort of lost generation of economic growth like japan. we have the distinction of had f winning this race i'm afraid. this chart you may have to go into the book. what it shows is men that are out of the labor force by and large attempt of them are trying to get out of the game and the time patterns for the rest of the group that needs neither

employee or education and training there is less civil participation and less volunteering, with charity work than working men and women of likewise when childcare and others with housekeeping there full-time job is watching television and video, internet and light over $2,000 a year not the best way to get back into the game of employment. so what are the reasons for this quiet catastrophe clearly there are three different sets of factors we could say to apply institutional or economic and structural welfare related and

barriers to employment. the big changes in the economy have a major role in the story but i think it's also possible to overstate the rule of the structural changes. what i show in this graph is the rising portion of men not in the workforce in this prime age group. it's almost a straight line from 1965 to the present. you couldn't tell where the the recessions were or when the boom and bust times were. it's almost like an astronomical gravitational change. we can also see other curious differences in the labor force participation rates if we parse this out. we all know for example that less educated men have been much more hard-hit than more educated men but i have disaggregated

here the blue line are both men without high school education. the bottom has fallen out for the nativeborn american men without high school degrees. there's the same labor force profile as college graduates in the united states. some of them are between the neighboring states because maine has one of the poorest profiles and new hampshire has one of the best profiles.

to the question of disability benefits. there's quite a bit of disagreement about the role of disability programs. the disability programs have a role in financing this phenomenon. we've been knocked labor force men to receiving one or more disability benefit about a million of the 7 million people receiving two or more disability benefit and two thirds were in households that have at least one disability benefit.

this has been all too largely overlooked as a problem with respect to the man without work phenomenon. since the 1980s we've seen an explosion in the number of americans who had have had a fy and a background. this is part of the problem that we don't collect figures very well in this aspect. irregardless of ethnicity and irregardless of education, guys who have a prison record are much more likely to be of the labor force. in turn they are much more likely to be out of the labor force than those that don't have any record of trouble without the law. i can't tell you about the dynamics here because shamefully the government doesn't collect statistics on this aspect of

modern american society. but it has to do with the typically worrisome growth in the nonworking male americans in the postwar effort. >> i'm very pleased to be here and he's doing so as effectively as he has done so already which is the trademark. one note for the record, i noticed this, too. this happens to be the last story that i did for "the wall street journal" in 2014. and it was a very moving experience to talk to those that work in this category. prime age man mostly too old to

begin college and too old to be the tiger in the conventional sense. this is a guy named mark riley and i asked him what did he do every day. and he said the most meaningful day of the week was working at the food bank in little rock because they give out fresh fruits and vegetables. he said it gave some order to his life. it made him realize there were people that were worse off than him. i want to make two points. first of all there is a widespread agreement that this is a problem. the council of economic advisers that coincides with the publication of the book.

the supply about the man who cannot be interesting to the scop--interested or capable of g and if you look at the chart your right he can draw a line but it is also up and downs and over the last 12 months the labor force participation rate in this bracket has risen by about one percentage point, so we know that it is not immune to the health economy but we also know that it's not all about the economy. this is a little demographic chart. it's good to focus on 25 to 50-year-old man because that eliminates the baby boomers but in that category 25 to 54, they are getting older on average and if you look at the 35 to 44-year-old bracket it was a very high labor force participation that represents less of this age cohort. so it's important to think about the demographics when you're

doing this. the 25 to 50-year-old category takes care of most of it, but not all of it. now what's going on just a couple observations, something american manufacturing has changed is we are producing a lot of stuff. it's not hard to get a factory job without some kind of education for computer skills so that is something going on there and i think that nick agrees with me. we don't -- we do not want and will not bring back manufacturing to the 1950s. we have to think about how this affects prime age men. and if you look at the question about is its demanof god is a d, you can ask this question if there was a shortage wages would be going up. this is the ratio of the high school wages that shows the high school dropouts and these are

the wages you can see that relative to college wages, high school wages are going down. that is part of the argument that this is something about demand. the technology and globalization changed the workplace in ways that do not favor those that are more likely to be in the pool and finally, just another chart, this incarceration thing is really important, and incarceration is coincided with education. on the left, you see that the high school dropout of any race higher for blacks than whites to an likely to have had and incarceration. these are people i think between their 30s. so you can see they have a double whammy at least. they don't have skills and education at the workforce demand and in a higher proportion how this.

i couldn't based on the survey evidence, he asked about these men who are not in the workforce about whether they were in pain. you can see the blue lin line an and the gray line is winning. 3.5% of the men who are not in the labor force of taking pain medication the previous day. two thirds of them are prescription drugs. we don't really know what is causing the effect that we know that there's something going on, opioid addiction with white working-class men, and it really cannot be an accident here that we see this pattern more likely to be on the pain meds rather than to cause you not to work or because you are not working then

if you were in the labor force. so, i will leave it there and i want to remind people that are watching online that you can send them questions to fli.do and enter the code aeievent. let's talk a little bit about the supply and demand. why do you think that it's so much more supply than jason furman in the cea? >> it is more supply than jason and the cea and the excellent report they deserve a huge salute for putting this one on the agenda. there are very few in the administration or in the congress on as much to put this on the agenda. it is a question of the proportions if we are talking

about demand 70% or 40%. i tend to think that both the institutional barriers have been severely underestimated. this is the incarceration felony, the criminalization of a large proportion of american population mostly younger men. i think that's been severely underestimated in part because the government forgot to collect the information that would examine us and i think the supply aspect has also been to some degree under stated or underestimated in the general narrative because i don't think that most of the general work has actually taken a

comprehensive role at the disability programs in the overall total of. i can understand why there's been a certain amount of oversight there. we do not have any central government authority to collect information on all of the crazy programs that we have in the disability area. that's why the excellent report focused on one program in particular and concluded that thithis maybe didn't have such a big hole because only 28% of the men not in labor force were enrolled in that one program. i think what i show in my book is the overall proportion is actually well over half if you take into account ssi veteran disability and other programs that people report being a part of, it is a much bigger aspect

of getting into questions about reservation wages and things like that as well and i think that those are actually kind of quite complex to research. it's quite complex actually to try to answer those and other logically rigorous way but what i would sa say for the reasons i mentioned already and for some other reasons i mentioned in the book as well, the notion that this is overwhelmingly a demand problem i think needs some re-examination. >> so you think something that is keeping them from looking for jobs. >> what we give you some examples, david. it's got pretty much sum of everybody but we know over represented are men with lower education, nativeborn american

men and men who have never been married or don't have kids at home. those are the overall patterns but there are some striking air regularities in the pattern for example, if you are a black guy and you were married you've are less likely to be in the labor force than someone that is not so with that respect marriage trumps ethnicity. if you are foreign-born and have no high school diploma, your profile looks at a college graduate so nativity or immigration trumps over immigration in that particular case. there are enough of these irregularities to suggest that the motivational aspect may have been neglected in much of the

work that has been done so far. >> so, when you go to -- i think the demand supply which in some cases you sort of hinted at is a bit artificial because if i tell you if i raised wages at the bottom by doubling the earned income tax credit and i pulled some o of the men off the sidelines but i also made them more attractive to employers is a little hard to know what is at the supply and demand your diagnosis does influence what you think the policies are. so, if you were thinking about how to attack those problems, what would be on your list? list?guest >> in the book i'm pretty light on policy prescriptions in part because i don't want to be seen as trying to dig for this thing. in my view, we need to have voices from all over the political spectrum come in from different points of view so that we can build a sustainable consensus having all sorts of different viewpoints that say

this is import and don't let this be forgotten about. where i come from i suggest in this book three kinds of areas for investigation. one is trying to reinvigorate business and particularly small businesses for more job generation. i think that probably wins on its own merits but as you know better than i am your work, we have had a net business debt and environments for closing and opening and that can't be good in all sorts of different ways. i suggested in the book that we should get a serious overhaul of our disability programs. obviously we need to have some sort of a disability guarantee in insurance for society, but we also want to make sure that the unintended consequences of the programs are not enormous and

perverse and i think we can argue that they may be today. this sort of direction that i think we might talk about is something that we see in sweden. you heard it first here. in sweden today, some of the aspects of their employment policies are what work first. they are having on training and skills, they incentivize showing up for job placement and incentivize showing up for work. if we take a look at the welfare reform in the 1990s, i think in retrospect we would say that was very successful. someone could say don't you realize we had a good economy in the '90s and it stinks now. fair enough. but there is an interesting work done in the brookings papers on

the parsing of the impact of the welfare reform into the macro economic environment according to some of that work was actually a rather small part in the changes and incentives and thintothe last part i would emp, it's just a scandal that we don't collect the data on the social and economic circumstances of the 20 million americans who have some sort of a felony in their past but are not behind bars. if we are a forgiving society, and i think we are, i hope we are part of what we should want to be doing is figuring out how to get at the ex- felons back into society. we can't hav can have evidence-d policies unless we have the evidence and that also i think is critical for the future. >> i think there is the beginning of the research agenda

on thi this funny thing and thes some really interesting work on the inside and outside the government. that's one where you would agree there's been an enormous focus bipartisan really one of the few bipartisan we realized that this has consequences that were not foreseen when we decided to have so many people. there's been a lot of discussion not all of it is work first business about should we find a way to give employers an incentive so they keep people on the job rather than put them on disability we have a system once you go on disability you never get off and we discourage people from if they apply for disability looking for the job because if you look for the job

i think that is another area partly because the trust fund always been on the edge. in response to this critical question the work great for america as a whole rose. what this means is american women were not displacing them.

it's not as we sometimes hear in certain circles. it's been a grim economy for working women for the last 15 or 16 years. i was talking in particular about the work rate that is also true about the language participation rate. >> when you look at that chart what do you make of that fact, what conclusion do you draw that we have a severe problem here?

that seems to be worldwide. we have suffered a much more severe decline than any other industrial democracy. now, i wouldn't say that that's because we are necessarily more globalized or more outsourced, although maybe we could prove that we are. if you take a look at other countries, and i'm thinking off the top of my head sweden and france and canada and australia, they experienced just about identical declines in their proportion of manufacturing jobs as needed over a period from like 1970 to the present.

and yet, we are the country that have the most abysmal record with the exit of men from the labor force altogether. certainly, it's logical and i think quite evident that the big structural change in manufacturing is part of this problem but i don't think it explains why the united states ended up at the bottom of the barrel. >> has a couple possibilities. there is possibilities of the country sees that we don't and this is optimistic because it means that there are things we could do. we also know that the gap between wages at the top and the bottom is more than in other places, so it is consistent in the notion that the wages at the bottom are so unattractive that we are not enough to get guys off the couch. >> absolutely. and of course, measuring the impact of wages at the lowest

level, the minimum wage level gets to be a little more complex because of the various social benefits to calculate the exact take home in effect is more complicated but as a general proposition. >> the interesting chart of the disparities among the states is that more of a question than a hypothesis? >> is one of the ingredients for connecting those at least in my eyes. one of the things we know about disability benefits as opposed to some other sorts of benefits they may tend to tie you to your locality. that's also true with some other sorts of benefits. it is at least worth considering

whether the nature of our social benefit programs may have had the perverse effect of helping to tether people to blow job environments when they would be better served through mobility. certainly it is the case whether the social welfare anchor is in effect or not. certainly it is the case that geographic mobility has plummeted in the united states over the past 35 years and that in itself is consistent in the big increases in disparities between the states. >> it's nothing to stop you from maine to new hampshire. there might be differences about the way the states -- >> i think because they are administered at the local level there is a certain amount of barriers in the startup and so

forth because they are administereadministered in the l manner. >> on the question of wages and whether there is a difference, did the changes to the welfare system in the '90s and all the requirements of work and all that stuff, does that have much impact on the behavior of these prime age men? >> in the 1990s, they wouldn't have been getting it anyway. it was a sort of how would you say, it was a sort of controlled experiment that mainly involved mothers with children who weren't married. >> one of the interesting things yohe said, and it's important to point out to people that would

be nice if there were a bunch of men who decided not to work and decided to stay home and cook and clean because their lives have such good jobs. but it seem seems in your book u pointed out two things. first of all, these men who are not in the labor force are looking for work don't tend to be married anyways perhaps because you don't think a very attractive husband if you have no job or income into second it doesn't show that they are actually spending a lot more time on chores around the house or stuff. there is the extent you can trust the stories of screen time and video games, older men on tv. so, wouldn't it be nice if the stories don't seem to hold up very well? >> of course i think that the structure gregory house who told us that everybody is a liar. if you take a look at the surveys that have been as your

first sort of go to another is there's not a lot of civil society, there's not even a lot of help around the house. there is a lot of sitting and watching in socializing and relaxing and being sure. one of the things that is noteworthy about the market in the postwar era is the number of people who left the labor market for a number of years and then returned successfully later on. those tens of millions of people were generally called when men anwomen andmost of them i thinkt probably be called mothers. whatever else you say about a mother who is at home, she has almost never idle. she has to be dependable, she has to be there. there are no sick days. you have to keep a schedule. all of these sorts of things if

you look at them as skills are the sort of things that employers tend to like in their employees. we have to ask the question about what happens to the guys in this group leade neither an education, or unemployment, education or training in a year or two of being out of the labor force. how do employers look at them and their skills. >> so your solution largely we want to tweak the benefit programs to create more incentives for work. you're not against trying to run a hotter economy were raising the wages of people at the bottom, but you are a little skeptical about whether that's really the bulk of the problem, is that fair? >> yes click >> yes i think that it's fair to say. and namely what i try to say at the end of this book is that it is important for people with all sorts of different policy agendas to come into the public

square and to the greek with one another that we need to shine a spotlight on this and we can duke it out in the world of empirical effects to see what actually works and doesn't work but if we let the problems with back into the shadows, it's going to certainly continue and i think we've got all sorts of reasons to worry it's going to get even worse. >> what are the consequences of it getting worse? >> let's see. slow economic growth, widening wealth and income disparities, greater government dependence, bigger budget deficits and debt, more pressure on fragile families, less social mobility, less social capital. the civil society.

>> may be more opioid addiction. >> i myself will not connect these dots but i think it's possible to talk about increasing political extremism in the united states. >> it's hard for me to figure out what is cause and effect. if you lost your job, you can't get another one, didn't work very hard. you get discouraged, you get angry. it may become one of the supply stories but it started with you lost your job and on the other hand if you have all these guys many of whom basically never had a solid job who have found some way to get by mooching off their family or whatever and then that leads to making them unattractive to employers. it's hard for me to tease out and i don't think the data gives us the answer to the consequence of not having a job.

>> i take your point that this is why we need to make this a bipartisan or on-demand partisan point of concern and why we can't forget about that in three months or a year when the economy seems to be going well. >> there's a question back there. wait for the microphone and be sure to tell us who you are and amber to ask a question and did not make a statement. >> thanks very much. i think this is great insight. some figures we have been seeing show that it's not just the lowest educated but also college education, at leas at least maie prime age are starting to have increasing problems relocating and finding jobs and my specific

question is the interesting figure we see i in office, the number of jobs and careers that the average person will go through by the time they are reaching the end of their working age life, we understand that there is an increase in the number of jobs. some look at that as job mobility and others look at it as insecurity. did you look at that at all in terms of how many times people are forced to change jobs or to do so willingly over the course of their career they think it is a measure more of instability. my chapter looks at the demography of the un- working american men mainly of this group of 7 million between the ages of 25 and 54 were neither working nor looking for work. interestingly enough, the high

school dropouts account for a disproportionate share of the group they still only account for about one fifth. america was at least more or a little more than college account for not quite half that over 40% so it is a nontrivial aspect of this greater phenomenon. there is a fair amount of work that has been done that is suggesting the churning in the labor market has been going down and it may be something we need to be a little bit worried abo

about. it's true technology and globalization are changing over people's lifetime so there are jobs on the macro level there is less. there's some self-respect or stigma associated in that part of this.

what i can tell you from looking at the statistics is that only about one in seven of the if you want to cal call it this army of 7 million before the pair out of the labor force because they couldn't find a job. six out of seven give other reasons. a lot of them are disability because as stated described some of the new findings about pain pills and people sitting on this all day is pretty dispiriting. >> the gentle man in the back and a blue shirt.

>> two-point question as it relates to remedies. it's been shown through several studies if employers were to hire for skills as opposed to credentials there would be a 30% increase on the underrepresented minorities in the workforce. so, my question is twofold. one, would you advocate a discussion of the civil rights act of 64 to prohibit discrimination based on credentials and second, at what point in time do you think that trajectory becomes a homeland security threat? >> i am out of my depth in dealing with the civil rights

act. when i think about discrimination against minorities, the first thing i i can go through this study has to do with felony background and criminal record and o that the over representation of some minorities in this pool. i don't think that we actually know as much as we need to about why people who have a record of some sort in their past are not in the labor force as much as they should be. is it because of discrimination pure and simple and is it because of people's skills and because people who tend to have trouble with the law are people employers do not look for i think we can know a lot more about that than we do and i think that we should. if the government were to collect data on this rather than for us to rely upon a couple of

surveys we would know an awful lot more. as to when this becomes a sort of crisis that our policing authorities have to pay attention to, i would submit that your guess is at least as good as mine. things are going in a direction that doesn't look at all good. larry summers and a bal board os a couple of weeks ago just extrapolated the line out to the 2040s and the 2050s. i don't know if we can really do that, but if you do, you have a spooky society staring you in the face.

>> how are they supporting themselves is it just disability programs where do they get their meals everyday? >> we have a chapter in the book that tries to parse some of that out. i don't think that the census bureau statistics fully reflect the benefits that people around the country are getting. it's not a crime they also represent capital gains in things like that. it's done by the census on the one hand and the ex- on the other hand.

it's to some degree moonlighting but to a small degree it's not a major source of income. above that is government benefits. when it comes to actual spending patterns we can't parse out of the box working into the unemployed. about three quarters are in the latter category so it's predominantly them. they're spending patterns not surprisingly are lower than the national average but interestingly enough, they are not in the bottom quintile of spending for america.

of those that are in this group are more or less ironically in the incomes which one the day lg ago we might have contributed to the working class. it's by a much more sociological and into the public school community interviewing people. >> i'm so glad you mentioned that because about a mile from here back in the 60s, there was an anthropologist named

elliot lebo who did a beautiful iconography study about black washington. it has withstood the test of time and in all sorts of quantitative way as it gets at things people just can't get at with statistics and, sent decimal points. we need to have a whole bunch of elliot go out and give us the human dimensions of the crisis that we have in america today. >> the woman in the back and then here in the red and i will take all three of you than he can decide which ones he wants to answer. >> lisa ekman with the organization of claimants representatives and i have two quick questions. one, you mentioned the impact incarceration has on

participation in the labor force. did you take a look at the over representation of people with disabilities who are incarcerated so for example about 40% say people who are incarcerated also have a disability. so the overlap of those could be telling as to what the story is. second is when you look and make international comparisons, and we are doing much worse, do you take a look at the fact that in other countries, people who become unemployed have access to better job training and access to universal health care and access to long-term services and support for rehabilitation that can help them maintain labor force attachment. >> we are going to get these questions and then respond.

>> a couple of comments, questions. first, in this whole supply versus demand argument, seeing these surveys that will show women are willing to take jobs men won't take. some of that may be wages women are willing to take the jobs men might not take which you alluded to before. perhaps some of that can be gotten t to by higher wages. but i would be interested in your thoughts up to what extent this is part of a larger cultural failing. we talk about over college participation. and one other question, you look at the 25 to 50 prime age of

course once you get to older men, you are seeing increased labor force participation and i would be interested in what he u might make of that. >> i don't see a lot of these problems in china. going to this gentleman's comments about enabling people to be unemployed and not look for work they are supported by their families but also the government. has there been any research on the effect of getting these men to return to the workforce when there are subsidies and government that are reduced or cut out? >> that is a good segue into my question. have you given any thought into what the universal basic income policy would have on this?

>> that is a good question. is there overlap between people being incarcerated and disability, do we know? >> guest:know?guest >> i argue in this but this is something we desperately need to know about. we don't have as much information as we should. >> when we talk about men who are not in the labor force, the government doesn't count people who are incarcerated. >> at this point, ten times as many people have felonies at large in society as behind bars. >> other countries have bigger and social safety nets and labor policies. is that one reason they are doing better than we are? >> i think certainly some aspects of that are involved and you can make the case that training policies and policies in particular countries which

are involved in trying to up people's skills and get them back in the labor market, those things i think are very much worth looking at. one difference is that it is more characteristic in european countries to have larger unemployed population stand in the united states whereas if we have people that are not in the labor force at all many tend to have a shift. >> there is an advantage to people who see themselves as unemployed at least going through the motions of looking for work. >> i think one can make that argument. people will disagree but that is certainly an argument. >> they asked is this one more symptom of the end of man or something. >> i think if you take a look

into the pool of fun working men and you do see different sorts of motivational factors, call them values or aspirations. i think it's meaningful you have such a difference with respect to family structure and people who are married to making different choices than those that are not in very large numbers of probabilities. likewise those to take the risk of coming to the united states are making very different sorts of calculations from people who were born here. so there's probably a lot more hope than just saying that its culture and the other thing is once you say that it's all culture it's kind of a big thing like we can't talk about that. i think we can talk about this. >> what do you make of the labor force participation of older men? >> i think it's terrific.

i think it's the single glimmer of sunshine we see in the labor market over the past 25 years that's turned out for the 55 plus group. it's what should happen with a more educated and healthy population. >> speak to >> if you look at jason and the work on the age cohort by cohort would have to live in a lot of hope. >> there were two questions. one is to shut when you just cut the subsidy off we have to work into the other is what didn't we do better off giving them the universal basic income so they are not starving and mooching off their relatives were breaking into -- >> hardhearted as i am, i think we've got some other options from the total darwinian option.

i think as i mentioned, if we were to overhaul programs to put incentives in place and also maybe even some help for training and job placement, that might work even better than oliver twist. ..