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Michel Euler / AP

For Americans, it seems like a terrific jobs market, with an astonishingly low,4.3% unemployment rate. Yet a closer look reveals a middle class hollowed out by automation, says Larry Summers, the former Treasury Secretary.

"This question of technology leading to a reduction in demand for labor is not some hypothetical prospect ... It's one of the defining trends that has shaped the economy and society for the last 40 years."

In an interview with Axios, Summers points out that 5% of American men aged 25 to 54 were jobless in 1968; today, that number is 15%. In this statistic, the U.S. trails most of Western Europe.

Expand chart
Data: OECD; Chart: Andrew Witherspoon / Axios

Why it matters: If the participation rate for this age group were at its 2001 peak, there would be millions more workers in the economy, making both the country and many families richer.

Summers says a lot of economists advocate "more dynamism and flexibility," but that the U.S. already has a freer market than most other wealthy countries. More flexibility isn't going to make a big dent in this jobs crisis. Meanwhile, "it is a close race between the United States and Italy as to who is going to avoid the cellar of the major industrialized countries" in terms of prime-age male joblessness, he said. And it doesn't seem likely to improve soon. Here is Summers again: "I suspect that if current trends continue, we may have a third of men between the ages of 25 and 54 not working by the end of this half century, because this is a trend that shows no sign of decelerating. And that's before we have ... seen a single driver replaced [by self-driving vehicles] ..., not a trucker, not a taxicab driver, not a delivery person. ... And yet that is surely something that is en route." What it says it about policy: Both Democrats and Republicans believe that able-bodied men and women should work. But there's a growing body of evidence that the conventional U.S. strategy of low taxes, skimpy welfare benefits, and prohibitively expensive higher education won't result in more of them getting jobs.

Mass incarceration could play a role: Former Obama Council of Economic Advisers Chair Jason Furman has presented evidence that the rise in prison populations have something to do with the problem, as employers often shy away from hiring ex-convicts, who are also barred by law from certain jobs.

Go deeper

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First glimpse of the Biden market

Photo: Jonathan Ernst-Pool/Getty Images

Investors made clear what companies they think will be winners and which will be losers in President Joe Biden's economy on Wednesday, selling out of gun makers, pot purveyors, private prison operators and payday lenders, and buying up gambling, gaming, beer stocks and Big Tech.

What happened: Private prison operator CoreCivic and private prison REIT Geo fell by 7.8% and 4.1%, respectively, while marijuana ETF MJ dropped 2% and payday lenders World Acceptance and EZCorp each fell by more than 1%.

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Biden-Harris, Day 1: What mattered most

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The Axios experts help you sort significance from symbolism. Here are the six Day 1 actions by President Biden that matter most.

Driving the news: Today, on his first full day, Biden translates his promise of a stronger federal response to the pandemic into action — starting with 10 executive orders and other directives, Caitlin Owens writes.

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Read: Pete Buttigieg's opening statement ahead of confirmation hearing

Pete Buttigieg, President Biden's nominee to be secretary of transportation, in December. Photo: Kevin Lamarque/AFP via Getty Images

Pete Buttigieg, President Biden's nominee to lead the Transportation Department, will tell senators he plans to prioritize the health and safety of public transportation systems during the pandemic — and look to infrastructure projects to rebuild the economy — according to a copy of his prepared remarks obtained by Axios.

Driving the news: Buttigieg will testify at 10 a.m. ET before the Senate Committee on Commerce, Science and Transportation. He is expected to face a relatively smooth confirmation process, though GOP lawmakers may press him on "green" elements of Biden's transportation proposals.