Richard Vedder has an op-ed in the WSJ today discussing the costs to American productivity that having fewer people working is having. The cost is substantial: According to Vedder, whereas from the 17th century through the 20th American wealth averaged a robust 3.5% annual growth, during the first twelve years of the 21st century it has averaged only 1.8%.
Vedder lists several causes for the slowdown, including primarily increasing government benefits. More and more people are availing themselves of payments from the government for food, for being unemployed, for disabilities, for going to college. All of these things either lure people out of the workforce or subsidize them for staying out of it. That means fewer people engaging in productive labor, which means slowing wealth production.
There are any number of thresholds a civilization might cross before it reaches the point of no return, but if the European experience for the last several decades is an indicator, having nothing to work for is a big one. And that is what these programs amount to: a slow but inexorable removal of all the reasons one might have to work.
Imagine you were an average young person in America today, coming out of, let’s say, high school. What do you see before you? A lot of pointlessness. Consider: So far in your short life you have enjoyed an enormously, indeed historically unprecedentedly, high standard of living. You have hours and hours per day of leisure time (that includes many of the hours you spend “studying” in school). What did you do to earn or deserve this? Nothing—you showed up. And if you ask for anything, you’ll probably get it.
Consider also that the dominant theme in American politics recently has been that there is something wrong or suspicious about earning money. If the rich need to pay their fair share, it means that either they haven’t done so already or they need to make reparations for something they did that was wrong. And many young people think that one becomes rich not by producing benefits or services that improve other people’s lives but by cheating somehow. So rich people don’t deserve what they have. (Of course, our system of quasi-capitalism, which increasingly rewards people on political rather than on economic grounds, increasingly gives reason for such suspicions.)
And consider further that all the material comforts for which people in previous times would have had to work are now increasingly provided for one without any effort on one’s own part—food, shelter, education, and health care chief among them.
So: The game is rigged, you can’t keep most of what you earn, you can get paid for doing nothing, and many of the creature comforts of contemporary life are available to you whether you work for them or not.
William Graham Sumner’s famous 1883 essay “The Forgotten Man” claims that when politicians and reformers decide they need to help some downtrodden or underprivileged segment of the population, they inevitably do so by taking money from the honest, hardworking, pays-his-debts person who otherwise just wants to make a better life for himself and his family. This “forgotten man” often ends up being punished for his “bourgeois virtues.”
But another theme in Sumner’s essay is that as the programs to help the downtrodden expand, the more likely it is that this forgotten man—on whom these programs depend—will start to feel like a sucker. He will feel exploited, taken advantage of by an unholy alliance of do-gooders and free riders.
I think many young people today see their futures in America the way Sumner’s forgotten man would after some crucial thresholds have been passed. What point is there, really, in working hard? Working hard is, after all, hard. Is there really a reward in it that matters to me—that appeals to me viscerally? If we add into this person’s vision of the future the doomsday scenarios about our national debt, and how it is all going to come crashing down like a fiscal house of cards sometime soon anyway, what, really, would be the point?