labor force participation

Not-So-Random Thoughts (XXI)

An occasional survey of web material that’s related to subjects about which I’ve posted. Links to the other posts in this series may be found at “Favorite Posts,” just below the list of topics.

Fred Reed, in a perceptive post worth reading in its entirety, says this:

Democracy works better the smaller the group practicing it. In a town, people can actually understand the questions of the day. They know what matters to them. Do we build a new school, or expand the existing one? Do we want our children to recite the pledge of allegiance, or don’t we? Reenact the Battle of Antietam? Sing Christmas carols in the town square? We can decide these things. Leave us alone….

Then came the vast empire, the phenomenal increase in the power and reach of the federal government, which really means the Northeast Corridor. The Supreme Court expanded and expanded and expanded the authority of Washington, New York’s store-front operation. The federals now decided what could be taught in the schools, what religious practices could be permitted, what standards employers could use in hiring, who they had to hire. The media coalesced into a small number of corporations, controlled from New York but with national reach….

Tyranny comes easily when those seeking it need only corrupt a single Congress, appoint a single Supreme Court, or control the departments of one executive branch. In a confederation of largely self-governing states, those hungry to domineer would have to suborn fifty congresses. It could not be done. State governments are accessible to the governed. They can be ejected. They are much more likely to be sympathetic to the desires of their constituents since they are of the same culture.

Tyranny is often justified by invoking “the will of the people”, but as I say here:

It is a logical and factual error to apply the collective “we” to Americans, except when referring generally to the citizens of the United States. Other instances of “we” (e.g., “we” won World War II, “we” elected Barack Obama) are fatuous and presumptuous. In the first instance, only a small fraction of Americans still living had a hand in the winning of World War II. In the second instance, Barack Obama was elected by amassing the votes of fewer than 25 percent of the number of Americans living in 2008 and 2012. “We the People” — that stirring phrase from the Constitution’s preamble — was never more hollow than it is today.

Further, the logical and factual error supports the unwarranted view that the growth of government somehow reflects a “national will” or consensus of Americans. Thus, appearances to the contrary (e.g., the adoption and expansion of national “social insurance” schemes, the proliferation of cabinet departments, the growth of the administrative state) a sizable fraction of Americans (perhaps a majority) did not want government to grow to its present size and degree of intrusiveness. And a sizable fraction (perhaps a majority) would still prefer that it shrink in both dimensions. In fact, The growth of government is an artifact of formal and informal arrangements that, in effect, flout the wishes of many (most?) Americans. The growth of government was not and is not the will of “we Americans,” “Americans on the whole,” “Americans in the aggregate,” or any other mythical consensus.

I am pleased to note that my prognosis for Trump’s presidency (as of December 2016) was prescient:

Based on his appointments to date — with the possible exception of Steve Bannon [now gone from the White House] — he seems to be taking a solidly conservative line. He isn’t building a government of bomb-throwers, but rather a government of staunch conservatives who, taken together, have a good chance at rebuilding America’s status in the world while dismantling much of Obama’s egregious “legacy”….

Will Donald Trump be a perfect president, if perfection is measured by adherence to the Constitution? Probably not, but who has been? It now seems likely, however, that Trump will be a far less fascistic president than Barack Obama has been and Hillary Clinton would have been. He will certainly be far less fascistic than the academic thought-police, whose demise cannot come too soon for the sake of liberty.

In sum, Trump’s emerging agenda seems to resemble my own decidedly conservative one.

But anti-Trump hysteria continues unabated, even among so-called conservatives. David Gelertner writes:

Some conservatives have the impression that, by showing off their anti-Trump hostility, they will get the networks and the New York Times to like them. It doesn’t work like that. Although the right reads the left, the left rarely reads the right. Why should it, when the left owns American culture? Nearly every university, newspaper, TV network, Hollywood studio, publisher, education school and museum in the nation. The left wrapped up the culture war two generations ago. Throughout my own adult lifetime, the right has never made one significant move against the liberal culture machine.

David Brooks of The New York Times is one of the (so-called) conservatives who shows off his anti-Trump hostility. Here he is writing about Trump and tribalism:

The Trump story is that good honest Americans are being screwed by aliens. Regular Americans are being oppressed by a snobbish elite that rigs the game in its favor. White Americans are being invaded by immigrants who take their wealth and divide their culture. Normal Americans are threatened by an Islamic radicalism that murders their children.

This is a tribal story. The tribe needs a strong warrior in a hostile world. We need to build walls to keep out illegals, erect barriers to hold off foreign threats, wage endless war on the globalist elites.

Somebody is going to have to arise to point out that this is a deeply wrong and un-American story. The whole point of America is that we are not a tribe. We are a universal nation, founded on universal principles, attracting talented people from across the globe, active across the world on behalf of all people who seek democracy and dignity.

I am unaware that Mr. Trump has anything against talented people. But he rightly has a lot against adding to the welfare rolls and allowing jihadists into the country. As for tribalism — that bugbear of “enlightened” people — here’s where I stand:

There’s a world of difference between these three things:

  1. hating persons who are different because they’re different
  2. fearing persons of a certain type because that type is highly correlated with danger
  3. preferring the company and comfort of persons with whom one has things in common, such as religion, customs, language, moral beliefs, and political preferences.

Number 1 is a symptom of bigotry, of which racism is a subset. Number 2 is a sign of prudence. Number 3 is a symptom of tribalism.

Liberals, who like to accuse others of racism and bigotry, tend to be strong tribalists — as are most people, the world around. Being tribal doesn’t make a person a racist or a bigot, that is, hateful toward persons of a different type. It’s natural (for most people) to trust and help those who live nearest them or are most like them, in customs, religion, language, etc. Persons of different colors and ethnicities usually have different customs, religions, and languages (e.g., black English isn’t General American English), so it’s unsurprising that there’s a tribal gap between most blacks and whites, most Latinos and whites, most Latinos and blacks, and so on.

Tribalism has deep evolutionary-psychological roots in mutual aid and mutual defense. The idea that tribalism can be erased by sitting in a circle, holding hands, and singing Kumbaya — or the equivalent in social-diplomatic posturing — is as fatuous as the idea that all human beings enter this world with blank minds and equal potential. Saying that tribalism is wrong is like saying that breathing and thinking are wrong. It’s a fact of life that can’t be undone without undoing the bonds of mutual trust and respect that are the backbone of a civilized society.

If tribalism is wrong, then most blacks, Latinos, members of other racial and ethnic groups, and liberals are guilty of wrong-doing.

None of this seems to have occurred to Our Miss Brooks (a cultural reference that may be lost on younger readers). But “liberals” — and Brooks is one of them — just don’t get sovereignty.

While we’re on the subject of immigration, consider a study of the effect of immigration on the wages of unskilled workers, which is touted by Timothy Taylor. According to Taylor, the study adduces evidence that

in areas with high levels of low-skill immigration, local firms shift their production processes in a way that uses more low-skilled labor–thus increasing the demand for such labor. In addition, immigrant low-skilled labor has tended to focus on manual tasks, which has enabled native-born low-skilled labor to shift to nonmanual low-skilled tasks, which often pay better.

It’s magical. An influx of non-native low-skilled laborers allows native-born low-skilled laborers to shift to better-paying jobs. If they could have had those better-paying jobs, why didn’t they take them in the first place?

More reasonably, Rick Moran writes about a

Federation for American Immigration Reform report [which] reveals that illegal aliens are costing the U.S. taxpayer $135 billion.  That cost includes medical care, education, and law enforcement expenses.

That’s a good argument against untrammeled immigration (legal or illegal). There are plenty more. See, for example, the entry headed “The High Cost of Untrammeled Immigration” at this post.

There’s a fatuous argument that a massive influx of illegal immigrants wouldn’t cause the rate of crime to rise. I’ve disposed of that argument with one of my own, which is supported by numbers. I’ve also dealt with crime in many other posts, including this one, where I say this (and a lot more):

Behavior is shaped by social norms. Those norms once were rooted in the Ten Commandments and time-tested codes of behavior. They weren’t nullified willy-nilly in accordance with the wishes of “activists,” as amplified through the megaphone of the mass media, and made law by the Supreme Court….

But by pecking away at social norms that underlie mutual trust and respect, “liberals” have sundered the fabric of civilization. There is among Americans the greatest degree of mutual enmity (dressed up as political polarization) since the Civil War.

The mutual enmity isn’t just political. It’s also racial, and it shows up as crime. Heather Mac Donald says “Yes, the Ferguson Effect Is Real,” and Paul Mirengoff shows that “Violent Crime Jumped in 2015.” I got to the root of the problem in “Crime Revisited,” to which I’ve added “Amen to That” and “Double Amen.” What is the root of the problem? A certain, violence-prone racial minority, of course, and also under-incarceration (see “Crime Revisited”).

The Ferguson Effect is a good example of where the slippery slope of free-speech absolutism leads. More examples are found in the violent protests in the wake of Donald Trump’s electoral victory. The right “peaceably to assemble, and to petition the Government for a redress of grievances” has become the right to assemble a mob, disrupt the lives of others, destroy the property of others, injure and kill others, and (usually) suffer no consequences for doing so — if you are a leftist or a member of one of the groups patronized by the left, that is.

How real is the Ferguson effect? Jazz Shaw writes about the rising rate of violent crime:

We’ve already looked at a couple of items from the latest FBI crime report and some of the dark news revealed within. But when you match up some of their numbers with recent historical facts, even more trends become evident. As the Daily Caller reports this week, one disturbing trend can be found by matching up locations recording rising murder rates with the homes of of widespread riots and anti-police protests.

As we discussed when looking at the rising murder and violent crime rates, the increases are not homogeneous across the country. Much of the spike in those figures is being driven by the shockingly higher murder numbers in a dozen or so cities. What some analysts are now doing is matching up those hot spots with the locations of the aforementioned anti-police protests. The result? The Ferguson Effect is almost undoubtedly real….

Looking at the areas with steep increases in murder rates … , the dots pretty much connect themselves. It starts with the crime spikes in St. Louis, Baltimore and Chicago. Who is associated with those cities? Michael Brown, Freddie Gray and Laquan McDonald. The first two cities experienced actual riots. While Chicago didn’t get quite that far out of hand, there were weeks of protests and regular disruptions. The next thing they have in common is the local and federal response. Each area, rather than thanking their police for fighting an increasingly dangerous gang violence situation with limited resources, saw municipal leaders chastising the police for being “too aggressive” or using similar language. Then the federal government, under Barack Obama and his two Attorney Generals piled on, demanding long term reviews of the police forces in those cities with mandates to clean up the police departments.

Small wonder that under such circumstances, the cops tended to back off considerably from proactive policing, as Heather McDonald describes it. Tired of being blamed for problems and not wanting to risk a lawsuit or criminal charges for doing their jobs, cops became more cautious about when they would get out of the patrol vehicle at times. And the criminals clearly noticed, becoming more brazen.

The result of such a trend is what we’re seeing in the FBI report. Crime, which had been on the retreat since the crackdown which started in the nineties, is back on the rise.

It is well known that there is a strong, negative relationship between intelligence and crime; that is, crime is more prevalent among persons of low intelligence. This link has an obvious racial dimension. There’s the link between race and crime, and there’s the link between race and intelligence. It’s easy to connect the dots. Unless you’re a “liberal”, of course.

I was reminded of the latter link by two recent posts. One is a reissue by Jared Taylor, which is well worth a re-read, or a first read if it’s new to you. The other, by James Thompson, examines an issue that I took up here, namely the connection between geography and intelligence. Thompson’s essay is more comprehensive than mine. He writes:

[R]esearchers have usually looked at latitude as an indicator of geographic influences. Distance from the Equator is a good predictor of outcomes. Can one do better than this, and include other relevant measures to get a best-fit between human types and their regions of origin?… [T]he work to be considered below…. seeks to create a typology of biomes which may be related to intelligence.

(A biome is “a community of plants and animals that have common characteristics for the environment they exist in. They can be found over a range of continents. Biomes are distinct biological communities that have formed in response to a shared physical climate.”)

Thompson discusses and quotes from the work (slides here), and ends with this:

In summary, the argument that geography affects the development of humans and their civilizations need not be a bone of contention between hereditarian and environmentalist perspectives, so long as environmentalists are willing to agree that long-term habitation in a particular biome could lead to evolutionary changes over generations.

Environment affects heredity, which then (eventually) embodies environmental effects.

Returning to economics, about which I’ve written little of late, I note a post by Scott Winship, in which he addresses the declining labor-force participation rate:

Obama’s Council of Economic Advisers (CEA) makes the argument that the decline in prime-age male labor is a demand-side issue that ought to be addressed through stimulative infrastructure spending, subsidized jobs, wage insurance, and generous safety-net programs. If the CEA is mistaken, however, then these expensive policies may be ineffective or even counterproductive.

The CEA is mistaken—the evidence suggests there has been no significant drop in demand, but rather a change in the labor supply driven by declining interest in work relative to other options.

  • There are several problems with the assumptions and measurements that the CEA uses to build its case for a demand-side explanation for the rise in inactive prime-age men.
  • In spite of conventional wisdom, the prospect for high-wage work for prime-age men has not declined much over time, and may even have improved.
  • Measures of discouraged workers, nonworkers marginally attached to the workforce, part-time workers who wish to work full-time, and prime-age men who have lost their job involuntarily have not risen over time.
  • The health status of prime-age men has not declined over time.
  • More Social Security Disability Insurance claims are being filed for difficult-to-assess conditions than previously.
  • Most inactive men live in households where someone receives government benefits that help to lessen the cost of inactivity.

Or, as I put it here, there is

the lure of incentives to refrain from work, namely, extended unemployment benefits, the relaxation of welfare rules, the aggressive distribution of food stamps, and “free” healthcare” for an expanded Medicaid enrollment base and 20-somethings who live in their parents’ basements.

An additional incentive — if adopted in the U.S. — would be a universal basic income (UBI) or basic income guarantee (BIG), which even some libertarians tout, in the naive belief that it would replace other forms of welfare. A recent post by Alberto Mingardi reminded me of UBI/BIG, and invoked Friedrich Hayek — as “libertarian” proponents of UBI/BIG are wont to do. I’ve had my say (here and here, for example). Here’s I said when I last wrote about it:

The Basic Income Guarantee (BIG), also known as Universal Basic Income (UBI), is the latest fool’s gold of “libertarian” thought. John Cochrane devotes too much time and blog space to the criticism and tweaking of the idea. David Henderson cuts to the chase by pointing out that even a “modest” BIG — $10,000 per adult American per year — would result in “a huge increase in federal spending, a huge increase in tax rates, and a huge increase in the deadweight loss from taxes.”

Aside from the fact that BIG would be a taxpayer-funded welfare program — to which I generally object — it would necessarily add to the already heavy burden on taxpayers, even though it is touted as a substitute for many (all?) extant welfare programs. The problem is that the various programs are aimed at specific recipients (e.g., women with dependent children, families with earned incomes below a certain level). As soon as a specific but “modest” proposal is seriously floated in Congress, various welfare constituencies will find that proposal wanting because their “entitlements” would shrink. A BIG bill would pass muster only if it allowed certain welfare programs to continue, in addition to BIG, or if the value of BIG were raised to a level that such that no welfare constituency would be a “loser.”

In sum, regardless of the aims of its proponents — who, ironically, tend to call themselves libertarians — BIG would lead to higher welfare spending and more enrollees in the welfare state.


Economic Horror Stories: The Great “Demancipation” and Economic Stagnation

UPDATED 08/03/13

Alternate title: “What We Can Learn from the Labor-Force Participation Rate”

The wholesale entry of women into the labor force after 1960 was considered (and still is, by many) to be a key sign women’s “emancipation.” Because of the baleful effects of that “emancipation,” I prefer to call it “demancipation.” What baleful effects? I begin with this, from a post that I wrote more than eight years ago:

Monetary measures of GDP exclude a lot of things that might be captured in the term “quality of life”; for example:

[F]ailing to account for the output produced within households may lead to misleading comparisons of economy-wide production, as conventionally measured. The female labor force participation rate in the United States has grown enormously since the early part of the 20th century. To the extent that the entry of women into paid employment has reduced the effort women devote to household production, the long-term trend in output, as measured by gross domestic product (GDP), may exaggerate the true growth in national output. [Committee on National Statistics (CNSTAT), Designing Nonmarket Accounts for the United States: Interim Report (2003), p. 9 in HTML version]

The “effort that women devote to household production” involves a lot more than shopping, cooking, cleaning, and all of the other activities usually associated with the term “housewife.” Not the least among those activities is the raising of children. Child-rearing (a quaint but still meaningful phrase) includes more than feeding, bathing, and toilet training. Parents — and especially mothers — impart lessons about civility — lessons that are neglected when children are left on their own to disport with friends, watch TV, and imbibe the nihilistic lyrics that pervade popular music.Yet, the apparently robust growth of real GDP per capita between owes much to the huge increase in the proportion of women seeking work outside the home. The labor-force participation rate for women of “working age” (14 and older in 1900, 16 and older in 2000) grew from 19 percent in 1900 to 60 percent in 2000, while the rate for men dropped only slightly, from 80 percent to 75 percent. Who knows how much damage society has suffered — and will yet suffer — because of the exodus into the workforce of women with children at home?

I went on, in that post and in later ones, to address the damage.

As it turned out, both the female participation rate and the overall rate peaked around 2000 (details here, Table 585). Here is a picture of the overall rate since 1960:

Labor force participation rate_Jan 1960 - Jul 2013
Source: Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, Civilian Labor Force Participation Rate (LNS11300000).

The end of demancipation around 2000 wasn’t necessarily an unmixed blessing. Why? Because the graph points to another horror story: economic stagnation.

Look at relationship of the labor-force participation rate and recessions, which are represented by the gray columns in the chart. (The recessionary periods are those defined by the National Bureau of Economic Research, here.) Each recession has marked a reduction or leveling off of the labor force participation rate. This is an unsurprising relationship because dimmed prospects for employment will deter persons from joining or rejoining the labor force.

But the decline since 2000 — and especially since 2009 — is eloquent testimony to a growing lack of faith in the country’s economic prospects. That lack of faith is entirely justified, as I have explained in many of the following related posts:
The Laffer Curve, “Fiscal Responsibility,” and Economic Growth
The Causes of Economic Growth
In the Long Run We Are All Poorer
A Short Course in Economics
Addendum to a Short Course in Economics
The Price of Government
The Price of Government Redux
The Mega-Depression
As Goes Greece
Ricardian Equivalence Reconsidered
The Real Burden of Government
The Illusion of Prosperity and Stability
Estimating the Rahn Curve: Or, How Government Inhibits Economic Growth
Taxing the Rich
More about Taxing the Rich
America’s Financial Crisis Is Now
A Keynesian Fantasy Land
The Keynesian Fallacy and Regime Uncertainty
Why the “Stimulus” Failed to Stimulate
The “Jobs Speech” That Obama Should Have Given
Say’s Law, Government, and Unemployment
Unemployment and Economic Growth
Regime Uncertainty and the Great Recession
Regulation as Wishful Thinking
The Real Multiplier
Vulgar Keynesianism and Capitalism
Why Are Interest Rates So Low?
The Commandeered Economy
Estimating the Rahn Curve: A Sequel
In Defense of the 1%
The Real Multiplier (II)
Lay My (Regulatory) Burden Down
The Burden of Government
Economic Growth Since World War II
More Evidence for the Rahn Curve
The Economy Slogs Along
The Obama Effect: Disguised Unemployment
The Stock Market as a Leading Indicator of GDP
Government in Macroeconomic Perspective
Where We Are, Economically
Keynesianism: Upside-Down Economics in the Collectivist Cause
The Economic Outlook in Brief
Obamanomics: A Report Card