Labor Force Declining : More Leaving

What this means for the working class is more pressure to not work, sit on the side lines taking the handouts from people that want to control the lives of everyone. This is the agenda of the socialist in Washington. Get as many people as you can depending on government to ensure they will vote to keep the survival kit money and stuff coming in. Debt out of control by spending trillions of dollars we don't have and no jobs created. Millions still out of work.

Why is this so difficult to understand by so many?

When It Pays Not to Work
Source: Diana Furchtgott-Roth, "When It Pays Not to Work," Economic Policies for the 21st Century, September 9, 2013.
September 17, 2013

Congress should reconsider eligibility criteria and benefit levels for programs such as unemployment insurance, food stamps and disability insurance. These programs have ballooned over the past five years, discouraging work, says Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute.

It is understandable that people drop out of the labor force -- stop looking for work -- when unemployment is rising and they have become discouraged. But, since the employment rebound from when the 2007-2009 recession began in May 2010, the labor force participation rate has fallen for both men and women.

• It now stands at 63.2 percent, down two-tenths of a percentage point from July.
• That is the same level as in 1978, prior to the decade where millions of women marched into the labor force.

A reason for this continuing trend is the vast array of government benefits.

• Over 8.9 million adults received disability insurance from the Social Security Administration in July 2013, the latest data available.
• The number of people receiving benefits is 23 percent higher compared to five years earlier and 55 percent higher than 2003.
• Benefits are higher, too -- recipients get an average of $1,129 monthly, 12 percent more than in 2008 and 35 percent more than in 2003.
• Over 47 million Americans receive benefits from the Supplemental Nutrition Assistance Program (formerly food stamps).

Unemployment insurance is particularly relevant both because it represents a large share of all benefits paid to individuals and because of the dramatic extension of benefits, from 26 weeks to 53 weeks. During the recession, benefits were extended to 99 weeks.

The shrinkage of the labor force has profound implications for future economic performance. Reduced economic growth will lead to steadily higher tax burdens on existing workers, which will in turn discourage labor force participation. This race to the bottom needs to be stopped.
Source: Diana Furchtgott-Roth, "When It Pays Not to Work," Economic Policies for the 21st Century, September 9, 2013.