Must-Read: Matthew Yglesias: We Still Haven’t Recovered

Matthew Yglesias: We Still Haven’t Recovered: “The long-term structural decline of American men’s attachment to the labor market is an interesting and important issue, [but] it’s not really an alternative to the theory that current low participation rates reflect an overall weak labor market…

…What’s true here is that non-working women are much more likely than non-working men to be spending their time on things like caring for children or for elderly or disabled relatives…. The paucity of jobs for men is arguably cause for a different level–or at least a different kind–of social concern. But in terms of understanding labor market dynamics, there is nothing special happening with American men that isn’t also happening to American women. What’s unique and different… is Americans in general…. Perhaps the best and clearest evidence that the labor market continues to be depressed is that employers have had an easy time getting people to work at a discount…. We have seen meaningful improvement in this metric over the past year, confirming that the labor market really has improved, but we’re still clearly not back to where we were before the crisis hit….

If the “missing” workers are really having so much fun playing video games that they refuse to work or are otherwise unhireable, then employment costs would be rising sharply and the Federal Reserve would have no choice but to tap the brakes to stop an inflationary spiral. The fact that employment cost growth is still on the low side suggests that the opposite is the case. The economy can safely keep adding jobs at the current pace–or, ideally, a faster one–for quite a while, just by drawing workers off the sidelines back into the labor force…. But to get this happy outcome we need patience from American policymakers…