I recently heard Carolina Panthers quarterback Cam Newton say that he loves to play video games in his spare time. Here’s a guy who can hop on a jet to any resort in the world, get front-row seats to any concert, and literally go dancing with the stars. But he’d rather throw virtual touchdowns and kill zombies. Few Gen X and Baby Boomer economists understand the gravitational pull that video games have on young adult men. For all the hype at the Oscars, the Emmys, and the Tonys, video game sales dwarf their entertainment competitors. Video games earned over $30 billion last year, almost three times the box office revenues for films. The League of Legends video game championships attracted 43 million streaming viewers last year. But there’s a serious side effect for economists: gaming helps explain recent shifts in the labor market.
The standard cliché of Millennials puts 20-something Josh on his mom’s sofa fiddling with a video controller instead of reporting for a desk job. Sure enough, the data do show that the labor participation rate for young people plunged during the Great Recession and has hardly rebounded since. From 2000 to 2015, labor hours for twenty-something men fell by 203 a year. You might call these “lost work hours.” We can debate contributing causes: (1) eroding work ethic; (2) paltry wage gains discouraging would-be employees; and (3) Obamacare requiring firms to keep 25 year-olds on their parents’ healthcare plan.
But it’s too easy to conclude that Millennials are coddled, uninspired snowflakes fearful that a boss might yell at them. Yes, Millennials are playing more video games and video game playing has taken up about 60 percent of the lost work hours. But there’s another factor to think about: video games have become ever more enticing! A recent study published by the National Bureau of Economic Research estimated that half the decline in work hours can be chalked up to better video game technology. Virtual and augmented reality tools will only get better, creating more immersive sports, soldier, spy vs. spy, and porn experiences. John Maynard Keynes saw a prosperous future in which people would work only a few hours a day and then go out and admire “lillies in the field.” He never imagined that idle people would be busier than ever – while still sitting on their mom’s sofa.