Welcome to the October Law and Business issue of NorthBay biz magazine. In addition to all the stories, there’s a special report on Health and Medicine, plus more than a dozen columns and special features in the area’s only glossy, locally owned business publication. You can rely on NorthBay biz as your local source for business news and information.
Labor Day was observed over this past extended weekend and the event made me wonder exactly what we’re really commemorating by celebrating this holiday. I began by looking up the definition of Labor Day on the Internet. Here’s the result: Labor Day n. The first Monday in September, observed as a holiday in the United States and Canada in honor of working people. Pretty straightforward definition, but it nevertheless gave me pause because so many fewer people had reason to celebrate this year.
Here are some disturbing facts. While the nation’s and California’s economy has rebounded to some extent over the past year, it’s been a jobless recovery. According to the Bureau of Labor Statistics, since January 2009, the population of those aged 16 to 64 has increased by 5.3 million. This age group represents the core of our workforce. Startlingly, only 720,000, or slightly more than 13.5 percent, are employed.
The rest are no longer counted in the workforce because they’ve stopped looking for a job. Those not participating in the labor force, aged 16 to 64, have increased by more than 5 million since 2009. During that same time frame, the labor force participation rate for this group has fallen from 75 to 73 percent. Had that participation rate remained the same, another 3 million people would have jobs.
When you add it all up, there are almost 22 million people who, since 2009, can’t find full-time work or have given up looking for a job. Total labor force participation has dropped to 63.4 from 65.7 percent over this time span. And remember, these are the government’s own figures.
Yet it never fails to amuse me when the government’s “official” unemployment rate is reported to be 7.4 percent, as it conveniently doesn’t count all the long-term unemployed in its “official” employment numbers.
How can this many people be unemployed? How are they getting by? How do they pay their bills? Well, I’m glad I asked.
There have been many studies released decrying how close-fisted we are as a society when it comes to welfare benefits for the needy. Thinking of all the programs on the federal, state and local levels there are to serve this need, I’ve always consumed those reports with a grain of salt. It seems I was right to do so.
To begin, the official poverty level established by the government in this country is set well above the average income level in most of the rest of the world. And the poverty level oftentimes dictates eligibility for welfare. There’s a new study out (authored by the Cato Institute) that calculates and ranks the amount of welfare available in each state. And it’s in this report answers can begin to be found to the questions I posed a couple of paragraphs ago. It seems as though welfare benefits are so high in many states that they actually undermine the necessity of finding a job. Why work if your benefits equal the median income of someone who works? Collecting welfare becomes your job.
Collecting welfare pays more than a minimum wage job in 35 states. In 13 states, it pays more than $15 per hour. Currently, the federal government alone funds 126 separate programs aimed at helping low-income people. The Cato study went on to compare welfare benefits for a typical welfare family consisting of one adult and two children with the wages that a recipient would have to earn to have a take home pay equivalent to their benefits under the various available programs.
In California, which ranked 10th nationally in this study, this three-person household would have to earn $37,160 pre-tax to have the same lifestyle that’s available from the welfare system. That number represents 180 percent of the poverty level.
When you look at this study, it becomes clear very quickly why job seekers are willing to stop looking for a job. In the end, the lure of dependency is too great. Why continue to try to find employment, especially when it means you might have to work 40 hours per week to earn the same or less than you do by just staying home? The need for a safety net is unquestioned. People encounter rough patches along the road and need a bridge to better fortunes, but creating a level of redistribution so great that it encourages people to give up being productive members of society is destructive to the individual and society at large.
I’ll close with a few more of my favorite political quotes.
“Politicians are people who, when they see the light at the end of the tunnel, go out and buy more tunnel.” —John Quinton
“Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other.” —Oscar Ameringer
“The Democrats are the party that says government will make you smarter, taller, richer and remove the crabgrass on your lawn. The Republicans are the party that says government doesn’t work and then they get elected and prove it.” —P. J. O’Rourke
That’s it for now. Enjoy this month’s magazine.
