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Monday, February 10, 2014

David Brooks, "The American Precariat": Would You Move to North Dakota?

If you were unemployed in the US, would you move to North Dakota? North Dakota has the lowest state unemployment rate of 2.6%, which is a fraction of the rates of California (8.3%), Michigan (8.4%), Illinois (8.6%), Nevada (8.8%) and Rhode Island (9.1%) (see: http://www.bls.gov/web/laus/laumstrk.htm).

In his latest New York Times op-ed entitled "The American Precariat" (http://www.nytimes.com/2014/02/11/opinion/brooks-the-american-precariat.html?partner=rssnyt&emc=rss&_r=0), David Brooks informs us regarding geographic mobility that Americans "are now at historic lows, no more mobile than people in Denmark or Finland." Brooks then describes the "Precariat," which he says is "the growing class of people living with short-term and part-time work with precarious living standards." Regarding this Precariat, Brooks concludes:

"The American Precariat seems more hunkered down, insecure, risk averse, relying on friends and family but without faith in American possibilities. This fatalism is historically uncharacteristic of America.

No one response is going to reverse the trend, but Michael Strain of the American Enterprise Institute believes government should offer moving vouchers to the long-term unemployed so they can chase opportunity. If we could induce more people to Go West! (or South, East or North) in search of opportunity, maybe the old future-oriented mind-set would return."

Well, if I had no job, I would leave for Fargo in an instant. However, we are also in an age when the American government is sponsoring disincentives to work, e.g. Obamacare. Earlier this month, the Congressional Budget Office released a report detailing the anticipated effects of the Affordable Care Act:

"The ACA’s largest impact on labor markets will probably occur after 2016, once its major provisions have taken full effect and overall economic output nears its maximum sustainable level. CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive."

Or stated otherwise by Douglas Elmendorf, Head of the CBO (see: http://www.nationalreview.com/corner/370398/cbo-head-obamacare-creates-disincentive-people-work-andrew-johnson):

"By providing a subsidy, these people are better off, but they do have less of an incentive to work."

Offer vouchers to the unemployed to move to North Dakota? Sorry, David, but I don't think they will help, when the government is concurrently providing incentives not to work.

1 comment:

  1. The 56 year old woman who can quit her job,early because she can buy affordable ACA and watch her grandchildren so her daughter with a deadbeat husband can use that child care money on the kids and get off food stamps. It is a win win for her family. Or the man who is stuck in a dead end job because he requires health insurance can now quit his job,get ACA and work on starting his own buisness. Win win. There are too many examples of how positive this will be for not just citizens but also the economy.

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