Why Isn’t Anybody Working?
Posted on January 10, 2014
Despite the fact that the Obama economy created only 72,000 jobs last month, the unemployment rate dropped down to 6.7%.
If that doesn’t make much sense to you, it doesn’t make much sense to any of the smart economists out there either.
Mark Zandi, perhaps the most quoted of Presidential economists out there, said this morning that the job creation number must be wrong, and will likely be revised.
Others have theorized that the cold weather or the government shut-down must have had something to do with the anemic results.
Of course, there is another, much easier explanation. More and more people have just stopped looking for work. These folks have either found ways to make money doing things that are illegal (selling drugs, prostitution, on-line poker, fraud, check-kiting, theft) or are more successful getting disability payments. Some may have also decided to stay at home with the kids and let their spouses work.
In fact, about 92 million Americans have taken themselves out of the labor force, and at 62.8%, that is the lowest labor participation rate since 1978, year two of the Carter Administration.
As Senator Jeff Session put it, for every one person who found a job, 5 people stopped looking for one.
The Democrats have two talking points on this news. First, we need to extend unemployment insurance and two, we need to increase the minimum wage.
But those talking points don’t work when people simply decide to stop looking for work. You only get unemployment insurance is you keep looking for work. Raising the minimum wage only gives businesses an incentive to not hire new employees.
Policy makers don’t need to be naïve about this.
As we found out in a scandal in New York yesterday, where dozens of former cops were indicted for trying to defraud the city’s disability system, the potential for fraud in our welfare system is pretty overwhelming.
60 Minutes did a segment earlier this year about a county in Appalachia, where ripping off the disability system was as routine as waking up in the morning.
I read an article in National Review yesterday, written by Kevin Williamson, entitled “White Ghetto”, about how folks in rural America use their food stamps to buy massive amounts of soda pop, which is then used as the currency to purchase things like cigarettes, booze and drugs, which are currently not allowed under SNAP program. As you can tell by the article, these are white people ripping off the system, so this in no way a racist thing.
During the Obama years, there are two Americas: Folks who go or want to work every day, and folks who have no intention of ever going to work again. And the folks who have no intention of ever working again have figured out ways to survive, and America’s welfare system allows that to happen.
This is the reality, and if we are going to change the system, we have to confront that reality, not with a naïve belief in the better angels of the common man, but with the unsentimental truth that you give somebody an inch, they are going to take a mile.
Republicans are starting to proffer ideas about dealing with poverty. Marco Rubio unveiled a plan to block grant the myriad of federal anti-poverty programs back to the states. I would be okay with that, but with one huge caveat. While I have little faith in the ability of federal politicians to control these types of programs, I have even less faith in the local politicians getting their hands on these honey pots of money.
I am from Chicago, so I have a built-in skepticism about the ability of local politicians to spend the taxpayer’s money wisely without lining their own pockets, especially on things like nebulous anti-poverty or job-training programs.
Looking at the latest revelations of two politicians that I wanted to run for President – and who I thought would make good Presidents (Bob McDonnell and Chris Christie) – I have even more reason for skepticism.
The Federal government might be corrupt and inefficient, but compared to most State Legislatures, it is a paragon of virtue.
Republicans are going to get grief for being heartless because they want to crack down on corruption, protect the taxpayer and come with some real ideas to spur economic growth (like cutting regulations, opposing the minimum wage hike, cutting corporate taxes) etc. But my guess is, going into a midterm election, along with that grief, they will also get the quiet support of those who pay taxes every week, and desperately worry that this country is going both morally and financially bankrupt.