Recent economic data releases show the changing nature of work preferences in America, or rather, non-work preferences.
The BLS unemployment numbers from December 7 show that the civilian labor force participation rate declined by 0.2%, the only really significant change from the previous month. That BLS report masks the true state of discouragement in the workforce. Check out Table A-16, which shows that the number of people not in the labor force is much higher now that it was a year ago. Multiple job holders are more numerous too. People give up on finding work when there's no work to be found. People take second jobs when one income isn't enough to pay for food and energy that the Federal Reserve's monetary stimulus has made more expensive. Stagflation is the new normal, until something breaks down and we head into another abyss.
Czars of government benefits programs like to see high unemployment because that drives demand for their programs. The Supplemental Nutrition Assistance Program (SNAP), aka the federally funded food stamps now delivered via EBT, showed an increase of 607,559 individual participants from August to September. The number of households participating increased by 289,235. That comes to about two people per household on the program, or in plain terms lots of single moms with one kid swiping their welfare card at Wal-Mart once per month. People respond to incentives, and many people are disinclined to look for work when welfare benefits are generous.
Some benefit programs are so generous, and the taxes levied to pay for them so onerous, that even productive people of means are looking for ways to opt out of success and become wards of the state. "Medicaid planning" is the hip new way for affluent people to become destitute enough to qualify for government-funded long-term care. People respond to incentives, and a blank check from the government for heroic end-of-life interventions care looks more attractive than a self-funded hospice stay.
It's hard for me to call poor people lazy when government EBT payments disincentivize them from seeking jobs. It's hard for me to call affluent people stupid when generous government care disincentivizes them from using their wealth productively. Public policy has become so perverse that many normal people are transforming from makers into takers because that's the financially sound thing to do. The 47% of our citizenry who see themselves as victims grows larger by the day. This will continue until the mass of takers overwhelms the productive economy's ability to support them through transfer payments.
My guess is that the madness will never cease of its own accord by reforming the policy system. The fiscal cliff negotiation pantomime under way shows us that Washington D.C. is not interested in anything other than the usual drama. The international bond market will have to be the adult in the room and stop this nonsense for us with a run on the dollar.
