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Men's incomes have declined 28% since 1968: study

Posting in Education

Compounded by profound economic shifts, three forces have been driving down men's average income in the U.S. -- slowing educational attainment, more leaving the workforce and more on disability.

The gender income gap seen in U.S. workplaces still favors men, though it has been gradually shrinking. And part of the reason the gap is closing is that while women have been earning more, men have been earning less.

In a new report published in the Milken Institute Review, Michael Greenstone and Adam Looney point to an eye-opening trend: The median wage of the American male worker has declined by 28%, or almost $13,000 (after accounting for inflation) in the four decades since 1968.

There are some profound implications on lifestyle in situations in which husbands do earn less than their wives, as recently explored by SmartPlanet colleague Audrey Quinn.  Audrey cites a study by Hanna Rosin, whose new book, The End of Men: And the Rise of Women, documents the shift taking place.

The Atlantic's Derek Thompson, who surfaced the Greenstone-Looney analysis, points to Rosin's observation that nearly half of the jobs created in the last 15 years have been in government, health care, and education, which historically have been more likely to employ more women. Male-dominated sectors such as manufacturing have decreased as a share of the economy. Lately, construction has also been in decline, leading some pundits to refer to the recent recession as a "mancession."

What forces are at work that are actually decreasing the average income for men? There's been a trend toward earlier retirement, but the authors adjusted for this possibility, and found the income drop was just as pronounced among men between the ages of 30 and 50.

Greenstone and Looney point to three main long-term factors impacting men's wage growth:

  • There's fewer men working. The percentage of men working full time has decreased from 83% to 66% between 1968 and 2009. The authors point to data within the Census’ Current Population Survey, in which the largest contributors to rising nonemployment can be categorized, in order of importance, as “ill or disabled,” “unable to find work,” “retired,” “homemaker,” “in school” and “institutionalized” (mostly in prisons).
  • There's been a slowdown in educational attainment among men. "While changes in the market driven by technology and globalization have continued, the skills of American men are no longer keeping up. Male college completion rates peaked in 1977, a few years after the end of the Vietnam War, and then barely changed over the next 30 years. This slowdown in educational attainment for men is puzzling because attainment among women has continued to rise, and higher education is richly rewarded in the labor market."
  • More working-age men are on disability insurance. "The percentage of prime-aged men receiving Social Security Disability Insurance (SSDI) doubled from 2.4% in 1970 to 4.8% in 2009. Much of the increase in SSDI claims can be traced to declining labor market opportunities for less-skilled workers, which made benefits more attractive than the wages available in the market. Once receiving disability insurance, workers have few incentives to leave – they are essentially not allowed to work while on SSDI, and there are few incentives for employers to make accommodations for workers with disabilities."

How to reverse this trend? The options are few and difficult, Greenstone and Looney admit. But a good place to start is to encourage greater education and training. Competing in today's global economy requires workers with both technology and visionary skills -- and there simply isn't enough of it to go around to sustain U.S. businesses in the long run.  Education and training efforts are not keeping up with the rate of change.

Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure