Thursday, March 19, 2015

The lifestyle structural economic shift (insensitivity alert)


Each month the press and those who follow the press go through the data releases on employment.  The more you wish to listen, the more you get granularity – claims, jobs, changes in the workforce, hours worked, earnings, part time vs full time, and one unitary number (the unemployment rate) that may or may not make sense at all. Arguments abound concerning the validity of all of it, but it is a consistently gathered and reported set of statistics that are done with rigor. The diligence of the exercise does not prevent it from wrongheadedness because its ceteris is not paribus.

The entire basis of labor statistics is a basis that remains the same, and I am convinced that at the high middle and low end of all of these data series there has been material structural change in this basis – in short, lifestyle decisions determine employment decisions throughout the U.S economy.

First, I insensitively consider the family formation  decision to be a lifestyle issue, so let us just say the family unit of 2015 is quite different than in the past.  Data has emerged that households without married couples surpass those with a married couple. Beyond this characteristic, the former extended family rarely exists, and thus the support for child care which leads us to…

The decision to not work and allocate efforts towards family is a choice, but it is exacerbated by the lack of extended family and the high cost of commercial child care.  Worsened by the dispersion of mothers and mothers in law away from the grandchildren, it often make sense to simply not work; now more than ever.  But the decision to form a family is a lifestyle decision, and even worse the proliferation of ‘accidental’ families (again to be insensitive) is a lifestyle choice.(I won’t go in detail to avoid outrage)

Compounding the change in the basis a third lifestyle issue that I find remarkably absent from the expert articles.  A brief review of the want ads shows hundreds of good pay with benefit jobs all around the US that go begging.  Not requiring advanced education these jobs are unfilled because the applicant cannot pass a drug test. This is not limited to the millennials, but there is a core of our population that has chosen a lifestyle that includes drugs (including prescription meds) and/or alcohol that eliminates them from full labor force participation. We do not see the ‘cannot pass the follicle test’ category in the statistics but we know them well…they are our friends family and neighbors. An $18 per hour CDL job with benefits is the low end of available compensation that this broad cohort self-disqualifies.

Good arguments do not rely on anecdotes and include data.  I have none, but the strength of the anecdotes is that they compound.  The nontraditional family also has accidental children to care for and has a lifestyle that includes substances that prevent proper employment and advancement. For the older cohorts, individuals and groups have chosen paths that are compatible with these lifestyles and they do not affect the employments statistics (but they do affect the government transfers as they age).  The younger cohorts may actually have an acceleration effect where nontraditional household leverages the child care lifestyle and accelerates the use of recreational substances.

But I am insensitive. This is a free society, and these morons have the right to their lifestyle choices.  Just don’t ask me to listen to the arguments for more transfer payments to the long term unemployed. It is a lifestyle choice or choices that got them there.

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