Friday, April 22, 2016

The government makes it too easy to not work

In a report issued last week, the Conference Board -- one of the most trusted voices in economic research – gave some sobering news to US employers. They will be dealing with a major labor shortage for the next 15 years.

The researchers cited various reasons for the crisis. Among them were: economic growth going step-for-step with employment growth; new entrants to the workforce being ill-prepared for working in health care or skilled trades; retiring baby boomers; and very weak labor productivity growth.

What they failed to mention as a key contributor to this matter is the simple fact that fewer people are interested in working.

The workforce participation rate is currently at 63 percent after bottoming out at 62.4 percent in September, which was its lowest mark in almost four decades. More than 94 million working age Americans are not employed or interested in employment (compare that to the 122 million Americans who are working at least 35 hours a week).  

This indifference to breaking a sweat can only occur when the government makes it too easy to not work. In a 2012 study I did for the New American magazine I looked at a market basket of federal programs related to health coverage, housing, food, heating, and cell phones and found that families that were collecting all such things from the public dole were receiving over $44,000 in benefits per year. While cash poor, they weren’t poor in the truest sense because they had access to all of the needs and some of the wants that the working class had to, as their name implies, work to get. 

That study looked only at benefits and not any incomes that people could receive while not working. Such incomes would include but are not limited to child tax credits, unemployment, and, what has become the new welfare – disability.

Disability has had a great impact on the decision to not work, thanks to modified federal programs which make it easier than ever before to collect a government check, morphing from their original intent to do good for those who are actually physically or mentally unable to work. It is now a system rife with fraud and abuses, all for a $1,000 to $1,200 monthly stipend.

A telling 2013 report from National Public Radio (which does not have a tradition of attacking social welfare programs) looked at this in-depth and found that people were collecting checks for made-up ailments and manageable woes like high blood pressure and diabetes, while costing US taxpayers $260 billion annually, threatening to bankrupt Social Security in 15 years.

If you don’t think that disability is being abused, consider this: 27 percent of Lockport city residents are considered disabled. Drive around the city and take a look at the residents; do you really think that more than 1 in 4 working adults in the Lock City are unfit for work?

Unless there is some wholesale change in federal programs that could theoretically cover someone’s whole existence from cradle to grave, almost 100 million Americans (and growing) will continue to choose the easy way out and not work, accounting for the long-term labor shortage that is primed to deeply affect the economy. Our economy – and our federal finances -- will continue to be on the shoulders of the 122 million Americans who are toughing it out and working for their personal benefit and, obviously, that of too many others.

From the 25 April 2016 Greater Niagara Newspapers 

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