The Americans Who Never Went Back to Work After the Pandemic

With pre-Covid rates of participation, almost three million more people would be in the labor force today

By Nicholas Eberstadt. Mr. Eberstadt holds a chair at the American Enterprise Institute. He is author of “Men Without Work: Post-Pandemic Edition,” forthcoming Sept. 19. Excerpts:

"Americans actually had more money in their pockets during pandemic emergency years than they cared to spend—so their savings rates doubled. In 2020 and 2021, a windfall of more than $2.5 trillion in extra savings was bestowed by Washington on private households through borrowed public funds. That nest egg could supplement earnings—or substitute for them.

Before the pandemic, as my study “Men Without Work” details, work rates for men of prime working age (25 to 54) had already collapsed to late-Depression-era levels, driven down mainly by a half-century-long “flight from work.” For each jobless prime-age man looking for work, another four were neither working nor looking by 2019.

But the current manpower shortage highlights the new face of the flight from work in modern America. With pre-Covid rates of workforce participation, almost three million more men and women would be in our labor force today. Prime-age men account for only a small share of this shortfall: Half or more of the gap is owing to men and women 55 and older no longer working. Strangely, workforce participation rates for the 55-plus group remain lower now than in summer 2020, before the advent of Covid mRNA vaccines. Why?

Many appear to have gone into a sort of premature retirement, thanks in part to pandemic policy “wealth effects.” Covid-era subventions, for example, transformed the financial profile of America, nearly doubling the net worth for the bottom half of American households. In effect, those 64 million households reaped an average of about $25,000 from this Covid-policy lottery.

Just before Covid, almost nine million homes headed by men and women 55 to 69—more than 1 in 5—had less than $25,000 in savings. Covid-era windfalls generated by pandemic policies may have played a role in the withdrawal of many older men and women from the workforce—for now."