What If The Young Won’t Work?

Suppose the youth of this nation were unwilling or unable to work. What then would happen to the country? The answer to that question should be obvious. The country would become progressively poorer.

Government, no matter its intentions, cannot create product or wealth. They only redistribute it. If fewer people are willing to work and the population remains the same, then per capita wealth necessarily goes down. The rate at which it declines is a function of many things, although the labor participation rate is among the more important.

Productivity is an important element. People are more productive when they have better tools and equipment to work with. Included among their tools is an education. “Human capital”  is primarily a function of the quality and quantity of education, something that has been in decline for decades. Tools and equipment are a function of past wealth creation or savings. As this diminishes, so too does the productivity of workers.

As the population ages, demographics come into play. An aging population means proportionately fewer people working and more not. Fewer people then must support more. Social security and medicare were both programs that depended upon their funding from those working. They were based on unreasonable assumptions (if you prefer, they were Ponzi schemes from the start) regarding demographics. As a result of rosy assumptions and increased benefits, these program are insolvent and will not last much longer in their current configurations.

Now it appears another factor is coming into play. The participation of youth in the workforce is declining. Bruce Krasting describes the deterioration:

The most disappointing element of Friday’s NFP report was the drop in Work Force Participation (WFP). This important measure of the labor force fell to a 31 year low. A look at the details shows things are even worse than the headline report. Consider this chart of WFP for two groups; workers 22-55 (white) and those 55+ (brown). The lines crossed in 2002. The negative gap has widened every year. It’s fallen off the chart the past three years.

This chart describes a real crisis for America. The long term consequences to the economic health of the country are tied up in this chart. All long-term macro economic analysis of the USA assumes that the current crop of younger workers will evolve to be a productive group for the rest of their lives.

Why are the young not working as they did in the past? That is moot. Some blame our school system, others the ease of living off welfare and still others the moral and cultural decline in the country. I suspect all are factors in the decline. The important point is how this change alters the future.  The standard of living and the per capita wealth of Americans is going down. These results are already showing up in various competitiveness surveys.

If the trend continues, the US will turn into a third-world nation quicker than most anticipate.

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4 Comments

  1. This was a naive and superficial article!

    The younger you are, the more you are being lied to, cheated and robbed by the political system you were born into.

    Consider the travesty of student “loans.”

    That money is created out of nothing, as debt, which enslaves the students for the rest of their lives.

    Meanwhile, as the economy of the USA is DELIBERATELY imploded, youth are still desperate to go to school, as the only thing they could reasonably expect to actually be able to still do …

    The USA became the victim of a hostile takeover by the international banksters. There has been a runaway destruction of the American economy for the last 100 years. Especially since 1971 total debts have gone UP at an exponential rate, since everyone is TRAPPED within the fundamentally fraudulent money-as-debt system, ruled by the FRAUD KINGS at the Federal Reserve Board.

    People work according the schedule of reinforcement during their lives. When the system get sufficiently screwed up, people appear to become “lazy.” However,
    it is the system that the driving force here, throughout all of its aspects, like the profit from disease system, and the profit from junk food system, and so on and so forth, all of which are automatically getting worse and worse, faster and faster, and adversely affecting the youngest the most!

  2. Perhaps young people feel that they have little chance of living as well as their parents, so why bother trying. Also, we have the dominant media and politicians criticizing high achievers and hard workers with comments like “you didn’t build that”. The public school system has also worked hard to diminish student’s competitive instincts. For example, youth sports eschew keeping score, because it might hurt the losing teams sense of self esteem. The Progressive mindset is taking hold and the youth’s lack of ambition is a consequence. Thank the public school system and big government politicians for this.

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