OPINION:
President Obama and Democratic presidential candidate Hillary Clinton would like you to believe the U.S. is in the midst of a great economic recovery.
But I have to ask: what recovery?
The United States has the third-lowest labor-force participation rate for “prime-age men” among the world’s developed countries — meaning Greece, Slovenia and Turkey all percentage-wise have more men working than the U.S. does.
A new analysis from the White House’s Council of Economic Advisers released Monday shows among men ages 25 to 54 — what is considered their prime working years — only 88 percent are participating in the U.S. workforce.
Overall, the percentage of the U.S. population who have jobs or are looking for jobs has dropped more than three percentage points to 62.6 percent, its lowest point since the 1970s. The fact that so few Americans are actively seeking or holding work is troubling.
Mr. Obama’s team attributed the dropoff to a lack of demand for low-educated workers, low-paying jobs and a higher incarceration rate (those in prison can’t be counted as part of the population). They played down the fact that many men on government assistance may lack the incentive to find work, which many economists have claimed.
In response to the 2007 recession, several U.S. safety-net programs changed in ways that discouraged employment, University of Chicago economist Casey Mulligan concluded in a study published in December. Eligibility for food stamps was reduced, waivers for work requirements were granted with the monthly benefit increased, and unemployment insurance was expanded.
Mr. Mulligan points out the U.K. — which was also undergoing a recession at the time — made different adjustments in their federal stimulus endeavor to encourage work after the recession. For example, their hand-outs were smaller and their disability program had some accountability — where enrollees’ ability to work was frequently assessed and its benefits capped.
Undoubtedly, there are many factors that are keeping the nation’s workforce from climbing. All of them should be considered — no matter what the political ramifications are. The U.S. welfare system has long been abused, and it’s only common sense some in the system would rather take a free handout than a low-paying job where they had to work their way up.
Last year, Mr. Obama’s same Council of Economic Advisers acknowledged among the reasons why the British were outpacing the U.S. in workforce participation was because of British policy changes that “introduced more stringent job-search requirements for some welfare recipients.”
It’s time the U.S. did the same.
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