Job creation is up. That’s the good news. The bad news is that the associated decline in the unemployment rate has been driven more by people dropping out of the labor force than by those finding work. There are still millions of long-term unemployed people, and the disability rolls, partially seen as a form of shadow unemployment, have also soared. In the meantime, many employers say they can’t find qualified workers or that there are skill shortages.
This puzzling disconnect -- workers can’t find jobs while jobs can’t be filled -- has been attributed to many factors, such as mismatches between skills or geography. But while those may account for part of the problem, the issue is more fundamental -- one of baseline unemployability.
I grew up in a rural southern Indiana community. It was no Mayberry-like idyll, but you really could leave your doors unlocked and the keys in your car. The boys in high school did carry on, and yes, people were sometimes killed in drunk driving accidents. But things like hard drugs were nonexistent. They simply couldn’t be obtained there.
Today southern Indiana is making national headlines for its drug-related HIV epidemic. The rural county where I grew up had 35 meth lab busts in 2013 alone. You can’t leave your doors unlocked anymore. Drugs, crime and other social ills long associated with the inner city have now migrated to this rural area and many other similar places around America.
This might seem surprising given that some population-wide social indicators, such as teenage pregnancy rates, have been showing improvement nationally. But that’s only part of the picture. As scholars as ideologically diverse as Charles Murray and Robert Putnam have documented, there has been a significant degradation in the recent past in social conditions in communities outside of the upper middle class.
From my own observations, one cause is the intergenerational decline of social capital. We can certainly see this in the areas of divorce and the rise of out-of-wedlock births since the late 1960s. The first generation experiencing these had robust family and social structures to sustain them when splitting up or having a child outside of marriage. Fast-forward to today, and this social capital has badly deteriorated. After multiple generations of single parenthood, even grandparents no longer have the financial or personal capacity to be as supportive as they would have been decades ago.
Many other factors have been at work too, such as the rise of at-home meth manufacturing and the growth of drug distribution networks, along with painful changes in the industrial economy.
We can see the impact of these trends across the job market. My father, who retired a few years ago as a quarry superintendent, told me of the difficulty he had had hiring and keeping employees. This was at a firm that, while not glamorous, paid some of the best full-time wages in the area -- wages that came with full benefits plus profit-sharing. Yet the overwhelming majority of applicants weren’t considered viable enough to even interview. Of those he did hire, a third failed to last even six months, with many being fired early in the probationary period.
This had nothing to do with job availability or wages and everything to do with the basics, such as having a high school diploma and reliably coming to work every day. This goes beyond hard and soft skills to baseline employability.
While certainly the good old days of plentiful high-paid jobs at the auto plant are gone, it’s still possible to build a life in America if you graduate from high school, stay away from drugs and crime, wait until you’re married to have children, and show up to work every day. But if you slip on one of these points, say by dropping out of school, you are put into a deficit in life from which you may find it difficult to recover. Sadly this has affected a lot of people, who are now in a very difficult place.
To be clear, there are many who suffer from a bona fide skill deficit or geographic mismatch, especially older industrial workers who long ago demonstrated that they are able and willing to work a steady job but have struggled to find work after plant closures. Yet for a segment of our population, traditional workforce or economic development remedies will not help. Whatever their root cause, which is a source of dispute, there are baseline personal and social issues that need to be overcome.
Addressing this matter will not be easy, because the issues are so politically charged and require confronting unpleasant truths about legal and social changes that virtually no one wants to roll back, but which have had profoundly negative effects on the working class. At a minimum, the emergence of inner-city-type conditions in white working-class areas might perhaps convince some whites that something other than race produces these results.
Regardless, today inclusive economic development is no longer simply a matter of creating jobs or teaching specialized skills. It will increasingly mean confronting thorny social as well as economic problems.