An Idle Generation
Following on Ashton’s post below (many of the themes of which appear in my column for this week), it’s crucial to note that the hazards presented by Obamacare’s incentives for lower-income Americans to stay out of the workforce are compounding a pre-existing problem. As noted by Mark Peters and David Wessel in yesterday’s Wall Street Journal:
More than one in six men ages 25 to 54, prime working years, don’t have jobs—a total of 10.4 million. Some are looking for jobs; many aren’t…
… The trend has been building for decades, according to government data. In the early 1970s, just 6% of American men ages 25 to 54 were without jobs. By late 2007, it was 13%. In 2009, during the worst of the recession, nearly 20% didn’t have jobs.
To the crisis amongst men, we can add the crisis amongst youth. As noted earlier in the week by Zara Kessler at Bloomberg:
According to a Pew Research Center analysis of U.S. Census Bureau data, 36 percent of the country’s 18- to 31-year-olds were living in their parents’ homes in 2012 — the highest proportion in at least 40 years. That number is inflated because college students residing in dorms were counted as living at home (in addition to those actually living at home while going to school). Still, 16 percent of 25- to 31-year-olds were crashing with mom and pop — up from about 14 percent in 2007 and 10 percent in 1968. In a Pew survey conducted in December 2011, 34 percent of adults aged 25 to 29 said that due to economic conditions they’d moved back home in recent years after having lived on their own.
Every trend line is pointing in the wrong direction. Yes, there are structural issues (technology, offshoring) that complicate the employment picture, but free markets generally resolve such issues given enough time. Markets can’t resolve, however, the pathologies imposed on the economy by government — whether Obamacare’s perverse incentives or the consistently anti-growth policies of the White House.
If nothing changes, the upshot will be the Europeanization of the American economy: fewer workers toiling to support a growing class of government beneficiaries.
Future generations may note the irony of Mitt Romney being so thoroughly pilloried during the 2012 election for his infamous 47 percent comment. While you can quibble with the statistics, the underlying theme is correct: we’re headed towards an economy with fewer makers and more takers. Changing that trajectory will be the responsibility of the next president — and it won’t be an easy one.