US economy

Can people still afford to be anti-work?


This article is an on-site version of our Swamp Notes newsletter. Sign up here to get the newsletter sent straight to your inbox every Monday and Friday

At the start of this year, the FT ran an article about the surge in popularity of Reddit’s “antiwork” forum whose slogan is “unemployment for all, not just the rich!”. The idea that a large number of Americans had turned against work seemed to fit with the data: the proportion of the US population that was working or looking for work dropped sharply at the start of the coronavirus pandemic and failed fully to recover when the economy bounced back.

We’ve seen the same phenomenon in the UK, where about half a million Brits of working age have gone missing from the labour market. In both countries, a fair chunk of those who have left is older people who decided to retire early.

Line chart of % of the population that is working or actively looking for work showing The size of the US labour force has taken a hit since the pandemic

I’ve been wondering whether all those people can afford to stay outside the labour market for much longer. Inflation, falling real wages, turmoil in financial markets: will these economic forces push people back into work, however reluctantly? Meanwhile, early retirees will have to appraise whether they can sustain the lifestyle they had hoped for.

Against that thesis, it’s well-established in economic research that the longer someone stays out of the labour market, the harder they find it to go back in. On top of that, a large number of these people seem to have left work because they were sick. That’s particularly the case in the UK, where about two-thirds of those missing from the workforce cite long-term illness as their reason for not looking for a job.

As far as we can tell, we don’t think that’s “long Covid” (not least because plenty of other countries haven’t seen this trend at all). It seems more likely to be chronic illnesses made worse by the pandemic, when millions of people had healthcare treatments delayed. Mental health also suffered during the pandemic. I wrote recently, for example, about the worrying long-term trend of rising inactivity among young men in the UK, with mental ill-health one of the prime drivers. If people just aren’t well enough to work, the cost of living crisis won’t drive them back into the labour market — it will just make them poorer.

It’s an important question because a bigger labour force would help ease the shortage of workers and take some heat out of wage inflation — one of the crucial metrics for the Federal Reserve and the Bank of England as they decide how fast to raise rates.

As for the answer, we don’t really know yet. In the US, the participation rate for prime working-age people (25 to 54) has recovered to 82.4 per cent, not far off the pre-pandemic peak of 83.1 per cent. But although there has been some chatter about “unretirement” among older people who had retired in the pandemic, that hasn’t shown up decisively in the labour force participation data.

In the UK, the number of people who are inactive has come down slightly in recent months, but it’s still early days. Anecdotes abound, though, including from a friend I met recently who retired from his job in banking the previous year but was considering a return to freelance consultancy work. The next set of UK labour market data is due on Wednesday, and what’s going on with the participation rate will be one of the first things I check.

A final thought: if these economies tip into a painful recession, higher unemployment and fewer job opportunities might well mean people on the labour market’s sidelines don’t manage to get back in, even if they want to.

What do you think Ed, does it feel to you like there’s been a fundamental reappraisal in America of how people feel about work and its place in their lives? And if so, can it survive the harsh economic winds that are now blowing? I would also love to know your interpretation of the latest twists and turns over the weekend in the Donald Trump/FBI saga.

  • The first ship to sail from Ukraine with a cargo of food since Russia’s invasion seemed like a moment of hope, but everything about the ship and its subsequent journey was pretty mysterious and interesting.

  • “People voted Tory not because they had become rich but because a Tory life had become cheap”: an interesting hypothesis from The Economist on the importance of low interest rates to the UK’s Conservative party.

Edward Luce responds

Sarah, you’re very much the expert on this and the fact that you’re equivocal about the long-term causes and effects of anti-work makes me uncharacteristically shy about voicing my opinion. Nor do I trust my own personal anecdotes on this subject because they’re random and contradictory.

My 22-year-old stepson graduated from the University of Pittsburgh in May and got a job two weeks later. He was very keen to plunge into work after a four-year studenthood that had been socially marred by the pandemic. Yet he seems to be unique in this among his peer group. I know plenty of people in my own early 50-something circles who were already at least partly working remotely when the pandemic hit and simply continued to do so, just more completely.

I also know a couple of people with long Covid. That enervating condition is what most concerns me now about the virus, since there’s about as serious a chance of dying from coronavirus if you’ve been vaccinated as there is being struck by lightning (which happened to three people in Washington last week, bizarrely and tragically). 

I do share your strong concerns about deskilling and the risks of a large cohort losing the ability and mental habits of being able to work. Economics ought to prod them back into the labour market, particularly as whatever stimulus-related savings they accumulated from the pandemic relief bills begin to vanish, as it must be on the cusp of doing.

But I do have one unfalsifiable hypothesis that I am convinced, without strong evidence, must be playing a role in today’s labour market conundrum. The pandemic reminded people of the drudgery of commuting. So much time spent on crowded public transport, or stuck in chronic traffic, that could have been spent with the family, or indulging your video game addiction. Covid offered them a glimpse into a world in which that steep daily tax on your time did not need to be paid. That was a white-collar insight. For in-person, blue-collar workers, no such tantalising prospect could afford to be indulged. In that sense, the pandemic was a sharp class divider.

Technology is a friend of so-called cognitive workers but no help at all to everyone else. I also think it’s become a generational divider. People of my age who have been working all their lives are not suddenly going to lose the habit. It is people in their 20s and early 30s whom I worry about. What you say about young men in the UK is particularly concerning. We need some imaginative public action to bring them back in.

As for Donald Trump, I’m hoping the pandemic has made him work-shy for the rest of his life. Alas, most of the evidence points the other way.

Your feedback

We’d love to hear from you. You can email the team on swampnotes@ft.com, contact Ed on edward.luce@ft.com and Rana on rana.foroohar@ft.com, and follow them on Twitter at @RanaForoohar and @EdwardGLuce. We may feature an excerpt of your response in the next newsletter

FirstFT Americas — Our pick of the best global news, comment and analysis from the FT and the rest of the web. Sign up here

Inside Politics — Follow what you need to know in UK politics. Sign up here





READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.