One of the reasons the labor force participation rate is falling is the aging of the population, which increases the percentage of the population that is retired. In the long run this is a major threat to the economy by making Social Security and Medicare less sustainable.
Another reason is that many older workers are dropping out of the labor force since they believe they are being discriminated against due to age. What can be done about this?
Another reason is because of a surge in the number of people on disability. What can be done about this?
Another reason (which is a more positive reason) could be because more people are pursuing higher education and trade schools.
Yet even these factors can’t explain the entire drop in the labor force participation rate. What else do you think is going on?
I think that surging skilled immigration could facilitate more product development, innovation and productivity, more investment, more business creation, increased labor force participation rates, and substantially lower long term projected budget deficits (by increasing the share of the population that is working, increasing the number of high income taxpayers, reducing the percentage of the population that is old).
Sadly though, immigrants tend to go to parts of the US that are already doing well (Bay Area, Orange County, greater Boston, greater Washington DC, Seattle, Silicon Hills in Texas, North Dakota, South Dakota,hedge fund and big bank alley in Connecticut and Deleware etc.) The areas that really need help are unlikely to benefit as much from immigration.
Lack of good jobs and the ability to not work (as you stated disability claims and numerous welfare programs). Large corporations are making a profit but not expanding. Small to mid size businesses are bogged down in regulations they can’t afford to go around. This leads to less jobs created. And of course complete chaos in healthcare hasn’t helped.
You are right that big government regulation is doing a lot to stifle product development, business formation, and investment. This is both reducing the quality of jobs on the aggregate, and reducing their number.
Companies can easily hire contractors (suppliers) from all over the world ; why should they mess with big regulation jurisdictions?
The National Health Care reform act forces companies with over 50 workers to offer health care to their workers. This is going to create a lot of 49 employee companies in America who refuse to hire more workers. Similarly any employee who works more than 30 hours needs health care. This is going to create large numbers of 29 hour part time jobs across the economy.
What do you think can be done with the surging number of people in America on disability, in mental health wards, etc.?
They are afraid that if they get a job, their health insurance will be astronomical for the rest of their lives because of pre-existing conditions.
Maybe we could set up a system that people on disability who choose to go off disability get 10 years of government funded health care. (They will be getting it anyway if they stay on disability, instead of work.) That way they are more likely to take the risk and work.
Many of them are scared that after 6 months (or a year) of working, their cancer (or other illness) might relapse, forcing them to quit. They are also afraid that it could take years to get themselves eligible to get disability again (or maybe they will never qualify for disability again.)
If they are guaranteed at least government funded health insurance, they might be more willing to take the gamble that their health will hold up after they rejoin the work force.
It would be great if there was some system to track people who received disability so that they could be forced to exercise extensively and eat an appropriate diet. Without that, most of them are unlikely to see a major improvement in their health, energy, creativity and drive.
For that matter, if every American (for whom it was medically safe) exercised regularly, it would sharply the quality of jobs in America (they would pay a lot more) and sharply reduce unemployment. It would balance the budget deficit (sharply higher tax revenue, sharply lower government social spending, much lower health care costs). Easier said than done.
“What do you think can be done with the surging number of people in America on disability, in mental health wards, etc.?”
The problem with Disability is the standards. The fact someone can’t work should not be enough. Lots of people can’t work do to their own decisions. That is not my problem and I don’t want pay them period. I don’t recall seeing in the US Constitution where I’m required to have my government support anyone. So if we do, it should be on a very limited and continually tested basis. Again like welfare this should not be easy to maintain. If someone is completely incapacitated that would be easily verified and I have no major objection to disability in that case. But if someone has the capability to work in any form the disability should be limited.
This won’t happen right now as we have nearly half of the country receiving some form of disability. As Benjamin Franklin wrote, “When the people find they can vote themselves money, that will herald the end of the republic.”
“It would be great if there was some system to track people who received disability so that they could be forced to exercise extensively and eat an appropriate diet. Without that, most of them are unlikely to see a major improvement in their health, energy, creativity and drive”.
It would make a major difference if people watched their diet and exercise considerably. Many ailments are reduced by just such action. If you want on the government dole then it seems a few requirements would not be out of line.
But again I refer to Benjamin Franklin. I frankly don’t see an answer that this country would now vote for.
So if we do, it should be on a very limited and continually tested basis. Again like welfare this should not be easy to maintain.
A Japanese type solution is to redistribute the power and wealth further downwards. Instead of having the feds or even the state do welfare, welfare would be constituted primarily at the level of the housing zones and housing standards. Let the people who live well, take care of their neighborhoods. Let the people most at risk of violence and poverty, take care of their fellows. While this on paper would see less resources allocated, more work and good would result due to the way humans treat independence and risk taking.
The people that care the most, will provide the most money, and see that the money is actually put to good use. If they have 10 people in their neighborhood on crack, drugs, prostitution, etc, they cannot afford to spend most of their money on the 7 deadbeats. They’ll re allocate automatically to save the ones that want to be saved.