Marketplace All-in-One
Why so many men are opting out of the workforce
· Summarized
Key takeaways
- The U.S. is expected to post a monthly trade deficit of more than $100 billion, and recent tariffs only produced a temporary, limited improvement.
- AI-related capital spending has grown roughly tenfold since 2020 and could approach $1 trillion this year, but markets are watching because spending stopped increasing in the latest quarter.
- Prime-aged men’s labor-force participation fell from about 95% in 1960–70 to about 88% by 2015, leaving millions outside the workforce and not looking for jobs.
- Levin attributes the decline to a combination of safety-net and disability-payment changes, shifting social norms, and people’s expectations about the rewards and future availability of work.
- Young men who expect technology to eliminate jobs may decide that seeking work is pointless, reinforcing the very withdrawal they anticipate.
Summary
The U.S. trade deficit is expected to exceed $100 billion
Marketplace’s Kimberly Adams asks Russ Mold of the U.K. investment platform AJ Bell what to expect from the upcoming U.S. trade-balance report. Mold says the consensus forecast is for a monthly deficit above $100 billion, meaning the United States continues to buy more than it sells. President Trump’s tariffs initially made a small dent, but the Supreme Court reversed some of them, and they never eliminated the deficit. Mold says the country is now “firmly back in the red.”
AI spending has stopped accelerating, raising market concerns
Adams connects a recent market slump and disappointing big-tech earnings to volatility around AI. Mold says hyperscalers, large-language-model developers, AI labs, and data-center builders have increased capital-expenditure budgets roughly tenfold since 2020. Spending is expected to approach $1 trillion this year, then rise to $1.3 trillion and $1.4 trillion over the next two years; Goldman Sachs estimates it contributes 1.5 percentage points to U.S. GDP growth. The concern is not cuts yet, but that spending failed to increase for the first time this quarter.
Prime-aged men’s labor-force participation fell from 95% to 88%
Behavioral economist Remy Levin tells Adams that the share of men ages 25 to 54 in the labor force has declined continuously for about 50 years. Around 95% participated in 1960 or 1970, either working or looking for work; by 2015, the figure was about 88%, representing millions of men who were neither working nor seeking jobs. Levin says the striking feature is that this group was once almost universally employed, yet its participation has fallen through both strong and weak economic periods.
Safety nets, social norms, and technological uncertainty may discourage work
Levin says his study is only one contribution and points to research on more generous social safety nets and changes in disability payments, which can make it possible to survive without working. Shifting norms may also make it more acceptable to remain unemployed or live with parents. He describes workers as weighing the convenience of not working against what they expect to gain from employment. For young men, rapid technological change—possibly as disruptive as the Industrial Revolution—creates uncertainty; seeing peers and elders predict that jobs will disappear can become a self-reinforcing reason not to pursue work.
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Show notes
It’s a big week for labor market data, including data on wages, unemployment, and job turnover. But before the employment floodgates open, it’s worth looking at a group of workers who have stepped back from the labor force: Men ages 25 to 54 — who were almost all working half a century ago — are participating significantly less today. What gives? Also: a look at how the U.S. trade balance is holding up.
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