David and i are going to try Something Different today. Dave is going to be going to be the emcee of our event today. We will see how this experiment and process unfolds with you here. David, do you want to take over now . Okay. I thought it was usual dnc starts first. We want to welcome api to the neighborhood is one of my colleagues says my colleagues says, we cannot send massachusetts avenue at least, any ice to the of brookings. I am really glad nick has done this book because i think that the acute issues of the Great Recession had to a large extent not completely passed and what we now observe that the number of chronic conditions which has mixed book shows has mixed book shows, has mixed bookshelves, baseline, the shocking fraction of prime age men who are not working in some thing that is a preexisting condition, something that preceded the Great Recession, maybe gotten worse and so it requires them in more than only we can talk a little bit about something to make the economy grow faster. Maple talk for a few minutes and then a couple sites in response to member will chat and bring you into the conversation. I should mention if you mention if youre watching a mind we are to field questions. Go to a website called sli. Do and enter a code to your write your name, type in your question and if we get to it, ill post it tonight. Thank you, david. I will try to discipline myself and expect you to discipline me if i dont discipline myself. I promise my book in 10 minutes or less. So things havent been going so well in the u. S. Labor markets and the turnofthecentury. The employment to population ratio, the work great for americans 20 and older peeked around the turnofthecentury and they have dropped in what i would regard as a diet manner as they shall in this chart. This is men and women together since the year 2000. But i point out in my book consistent line of work rates for men has been going on for a long time. It has been going on for at least 50 years. The lower line is the work great for men over the age of 20. Couldnt say wait a minute, that includes population aging but the gray line is a prime working age men. The key 2554 group. And its been something done once for half a century. Looking at the prime working age men employment problem. This is the proportion of nonworking man of prime ages from the beginning of the postwar era to the present government you can see this every ratcheting up with ever recession to a new worse normal. Right now 15 of prime age guys. If you want to compare it to the depression, you can and its not a happy comparison. If we look at the work rates for prime age men in 2015, they were actually about two percentage rates lower than for primates met in 1940 at the tail end of the depression. If you look at the group 20 to 64 years old likewise looks worse today than the tail end of the depression. Its not wrong to describe the Network Problem sbu nasa as if depression scale. In fact, if we just had american men back to work rates of 1965, david e. Another almost 10 million guys in america today. So the main reason for this collapse and i caught the collapse of work rates for men has been declining participation has been the liz trotta of men from the work force. They like to measure unemployment, but a very incomplete measure of whats going on. Unemployed guys who have checked out of the work force of the great line. Today there are over three times as many men who have left the workforce altogether under unemployed without a job and looking for work. The exit from the workforce dominates the nail lacquer work problem today. This kind of crazy chart is meant to show how the u. S. Looks in international comparison. Where the dark black dashed line. You can see with kind of won the race to the bottom. Actually, distraught female Labor Force Participation in america has been worse than in countries like greece or france are countries that have had a lost generation of Economic Growth like to pay them. This chart you probably wont be able to see and maybe go into the book from amazon. Com. What it shows is men who are out of the labor force by a march are checked out of civil society. They dont to civil society. Attempt of them arent those students trying to get back into the game. Their time patterns are very much like employed men for the rest of the group that neither quick nor an education and training. Theres plus civil participation, less volunteering, less charity work than working men or women for unemployed men. Likewise with child care and care for others like wasted housekeeping. Their fulltime job is watching, television, video, internet and the like. Not the best way to get back into the game of employment is very skilled generation so what are the reasons for this quiet catastrophe . I think we can call it a quiet catastrophe. Her three different sets of factors. Supply, demand, institutional or we can set economic and structural, welfare related in barriers to employment. Obviously, the big changes in the economy have had a major role in the story, but its also possible to overstate the role of structural changes. What i show in this graph is the rising proportion of men not in the workforce in this prime age group. But 1965 to the present. If you look at this line you couldnt tell when the recessions were when the boom times where are the best times were. Its almost as if its an astronomical gravitational change. We can also see other curious differences in the Labor Force Participation rate. We all know for example that less educated men have been much more hard hit a more educated men. What ive disaggregated here the blue line in grey lynn are both men without high school education, but the blue line are foreignborn and the gray line is nativeborn american men. The bottom has fallen out or nativeborn american men without high school degrees. Foreignborn american foreignborn College Dropouts in the United States at the same labor force profiles College Grads in the United States. One other curious thing to note with big regional disparities in our Labor Force Participation rate. Some of the big disparities are between neighboring state. New hampshire has one of the best profiles. Theres only one state by state order between maine and new hampshire. Weve seen increasing disparities by state grow over time. Its a curious thing. I wanted to point to the question of disability benefit. There is a lot of discussion of disability benefit and disagreement about the role of disability programs. Nobody can prove because they have created this problem. Nobody can show they have caused it. But i try to show what my book is disability programs have a role in financing this phenomenon and it had a growing role in financing this phenomenon. Indeed in 2013 by my estimates in this book, almost three and five not in labor force men were receiving one or more disability benefit, about an alien of the 7 million workers eating two or more disability benefit and about two thirds were in household that at least one disability benefit. And then crime has been all too largely overlooked as a problem with respect to the phenomenon. Since the 1980s weve seen an explosion in the number of felons to have a felon in the background now over 20 million. One in eight men. This is surely part of the problem but we dont collect figures very well. In my book, i show, i showed, i showed it to regardless of age, regardless of ethnic city, the practice of education, guys who have present record are much more likely to be out of the Labor Force Data guys who have just an arrest record who in turn are much more likely to be out of the labor force and guys who dont have any trouble with the law. I cant tell you about the dynamics here because shamefully our government does not collect statistics on this critical aspect of modern american society. But these factors all have to do with the terribly worrisome growth and nonworking male americans and our postwar era. 10 minutes . Excellent. So im very pleased to be here. I think its really important that nick is calling attention to this issue and doing so is the fact early as he has already, which of course is his trademark. I want to note for the record that i noticed this, too. This has to be the last story i did for the front page of the wall street journal in 2014. It was a very moving experience to talk to guys who were in this category. The spanish men, mostly too old to be in college, mostly too young to be retired. This is a guy named mark riley from little rock and i asked him what did he do every day. He said that the most meaningful day this week was working at this food bank, and a new shovel food bank. You can see they give out fresh fruit and vegetables. It gave some order to his life. It made him realize there are people worse off than had you got the leftovers. I want to make two points a bit in the week about what they say. First of all, we will talk about there is a widespread agreement that this is a problem. Jason furman of the council of economic advisers today report that coincides with the publication of the next book. Where theres a disagreement is about what is the nature of the costs. How much of this is supply . That is something about a man that needs than not to be interested or willing or capable of working and how much is about the demand and how much employers want them . Hes right you can draw a line, do you can also see a lot of ups and downs. Recently over the last 12 months in the Labor Force Participation rate has risen by about one percentage point. We know that its not immune to the health of the economy, but we also know from historical pattern that its not all about the economy. This is a demographic chart to make one point. Its great to focus on 25 to 54yearold man. But in that category of men 2554, they get older on average. If you look at the 3544yearold bracket with the highest Labor Force Participation, that represents less. So its really important to think about demographics and you do it. The 25 to 54 euros category takes care of most of it but not all of it. Whats going on . A couple observations. American manufacturing is change. We produce a lot of stuff. These were the jobs you can get with muscle and not brains. Its not very hard to get a factory job without some kind of education, some kind of computer skills. So theres something going on. That doesnt mean we will not come we dont want to bring back manufacturing for the 1950s. We have to think about how this affects prime age men. Secondly, when you look at the question about demand or supply, you can ask this question. If there was a shortage of unskilled men willing to work, their wages would be going up. What do we see . These are High School Grads to college pages. You can see relative to college rages, high school wages are going down. Thats part of the argument this is something about demand. To change the workplace in ways that do not ever lesser educated men that are more likely to be in this pool. Finally, i didnt realize what was going to show this incarceration thing is really important. Incarceration five education. If your High School Dropout at any rate, higher for blacks and whites are more likely to have had incarceration. These are people between i think these are people in their 30s. Most likely. So you can see they dont have skills and education at the Workforce Demand and a higher proportion have this advantage. Finally, i couldnt resist this war based on survey evidence he asked about these men who are not in the work for us about whether they were in pain and lots of them say they worry he peered this one shows whether they took pain medication. As you can see, the blue line as men. That rate minus the name. 43. 5 of the men who are not in the labor force had taken pain medication the previous day. Two thirds of that prescription drug. So as nick said, we dont know what his cause and effect, but we know from the work that theres something going on, opioid addiction with white workingclass men and it cant be any accident here that we see this pattern more likely to be unpaid med, whether to cause you not to work or because youre not working then if you were in the labor force. Ill leave it there. I want to remind people watching online think you can send a question to sli. Do and answer the code is aei event. You can send a question and if i can remember to look at the ipad i might answer them. Nick, lets talk about the supply and demand thing. Why do you think it is so much more supply than say jason furman . I guess they think it is more supply dave jay said the cda. By the way, they deserve a huge so that for putting this on washingtons agenda. There are very few in the administration of the congress who have done as much to put this on the agenda. It is really a question of the proportions, whether we talk about demand 70 per demand 40 . I tend to think that both the institutional barriers have been severely underestimated. This is the incarceration, felony, criminalization of a large proportion of american population. Obviously, mostly younger men. I think that has been severely underestimated in part because government kind of forgot to collect the information which would allow us to examine this. I think that the supply aspect has solved the bed to some degree understated our underestimated in the general meredith because i dont think most of the general work has actually taken to comprehend the book at the role of disability programs in the overall tableau. I can understand why theres an insert amount of oversight they are. We do not have any Central Government already to collect information on all of the crazy quilt of programs that we have in the disability area. That is why jasons excellent report, the cda brief court focus on one program in particular, asset vi. They concluded this maybe didnt have such a big role because only 28 of the men nod in late force were enrolled in not one program. I think when a show in my book is that the overall proportion is well over half. If you take into account ssi, veteran disability, other programs people report being apart of. Its a much bigger aspect. We get into questions about reservation wages and things like that as well. I think those are quite complex to research. Its quite complex to answer those in a rigorous way. I would say for the reasons that i mentioned already and for some other reasons i mentioned in the book as well in the notion this is overwhelmingly a demand problem meet some reexamination. Would use a supply problem, you need something that is keeping the skies are looking for jobs . We know in general a pool of 7 million men is pretty much everybody. We know over represented by men with lower education, africanamerican men, nativeborn american men and men who have never been married or dont have kids at home. Those are the overall patterns. There are some striking irregularities in the patterns. For example, if you are a black guy a black guy in your marriage can earmark likely to be in the labor force than a white guy who isnt married. So without respect, marriage trumps ethnicity. If you are foreignborn and you have no highest diploma, your profile looks like a college grad. So the nativity of our immigration trumps education in that particular case. There are enough of these irregularities to sit just that the motivational aspect may have been neglected and much of the work that is done so far. So i think the demand supply, which in some cases and if i double demand and contacts end quote some of these men off the sidelines but they also make them more to sue employers, your diagnosis to influence what you think the desired. So if you were thinking about how to attack those problems, what would you put on your list . Well, in the book, i am pretty light on policy prescriptions. In part because i dont want to be seen as trying to bigfoot is being. In my view, we need to have voices from all over the political spectrum come in from very different points of view so they can build a sustainable consensus having also is a different viewpoint that this is important, dont dedicate forgotten about. I suggest in this book three times at various investigation. One is trying to reinvigorate business and particularly smaller businesses for more job generation. I think that probably wins on its own merit. But i think as you know very much better than i from your work, we have added that Business Environment as 2007. More businesses closing and opening. That cant be good and all sorts of different ways. I suggest in the book that we should look out a serious overhaul of disability programs. Obviously we need to have some sort of disability guarantees and insurance. Thats why the programs i dare. We also want to make sure the unintended consequences of the programs arent enormous and perverse and i think we can argue they may be today. The sword of direction that i think we might talk about actually assigned to them that we. You heard it first here at aei guy talking. In sweden today, some of the aspects of their employment policies or workers. They are heavy on training a skilled. The incentive by showing up for job place. Incentive by showing up for work. If we take a look at the welfare reform in the night demand a summit and ranchers that we say that was fairly successful. Someone can say eberstadt, you, dont you realize that a good economy in the 90s that is out. Fair enough, but theres been very interesting work done in brookings papers on the parsing of the impact of the welfare reform in the macroeconomic environment according to some of that work was actually rather smaller part in the change in 10 days. The last part i emphasize is its just a scandal that we dont collect data on the social and economics are consensus that the 20 million americans who have got some sort of a felony in their past, but are not behind bars. If we are a forgiving society unity we are, i hope we are, part of what we should want to be doing his feet. Not how we can get these exfelons back into the economy and back into the society. We cant have evidencebased is unless we have the evidence. That also is absolutely critical for the future. I think there is the beginning of some Research Agenda on this felony thing in them inside and outside the government. That is one im sure you would agree theres been an enormous focus, bipartisan related that we realized that has consequences that are not proceed with tight but so many people. You do agree that we can wiggle around the line with demand. If we had a stronger economy with more job creation, more pe