John Mauldin looks at angst in the US and other western societies, the changes wrought over the past few decades, and why many working age men aren't working

John Mauldin looks at angst in the US and other western societies, the changes wrought over the past few decades, and why many working age men aren't working

By John Mauldin*

“America was not built on fear. America was built on courage, on imagination and an unbeatable determination to do the job at hand.” 

– Harry S. Truman 

“Unemployment is a weapon of mass destruction.” 

– Dennis Kucinich 

“Ever since 2000, basic indicators have offered oddly inconsistent readings on America’s economic performance and prospects. It is curious and highly uncharacteristic to find such measures so very far out of alignment with one another. We are witnessing an ominous and growing divergence between three trends that should ordinarily move in tandem: wealth, output, and employment. Depending upon which of these three indicators you choose, America looks to be heading up, down, or more or less nowhere.” 

– Nicholas Eberstadt, “Our Miserable 21st Century” 

           “Depression Breadline,” 1991, by George Segal.

Angst is “a feeling of anxiety, apprehension, or insecurity.” Many of us feel it acutely right now – and that’s new. Angst isn’t a temporary, individual thing anymore. Now we all feel it together – or at least most of us do – and it’s not at all temporary. Millions can remember feeling no other way. 

There’s a general sense in much of the developed world that we’re headed for more difficult times. Deficits increase, unemployment rises, and the benefits of the future – or at least the future that is already here (to paraphrase William Gibson) – have been unevenly distributed throughout society. It is not just in voting patterns that you can recognize the sense of malaise. You can see it in the economic numbers and in a lot of the psychological/sociological research. 

Angst manifests differently in different countries. Consider Japan: 

Recent research by the Japanese government showed that about 30% of single women and 15% of single men aged between 20 and 29 admitted to having fallen in love with a meme or character in a game – higher than the 24% of those women and 11% of men who admitted to falling in love with a pop star or actor. 

The development of the multimillion-pound virtual romance industry in Japan reflects the existence of a growing number of people who don’t have a real-life partner, said Yamada. There is even a slang term, “moe”, for those who fall in love with fictional computer characters, while dating sims allow users to adjust the mood and character of online partners and are aimed at women as much as men. A whole subculture, including hotel rooms where a guest can take their console partner for a romantic break, has been springing up in Japan over the past six or seven years. (The Guardian). 

Is it any wonder that there is a dearth of babies in Japan? It’s hard to get pregnant when a computer avatar is your companion. Young British women are literally 20 times more likely to have a pregnancy out of wedlock than young Japanese women. The cultural oddity of moe partially explains that fact. 

While researching this topic I came across literally scores of similarly disconcerting statistics. For instance, the difference between the income and employment status of young males who grew up in two-parent versus one-parent homes is staggering, especially when you realize how fast the number of single-parent homes – generally, though not always, led by the mother – is rising. Less than half of US children live in a traditional family setting, according to Pew Research. 

This week we begin a series of letters exploring the new economic and sociological anxiety. I want to look at what causes it and think about what we can do to ease it. I don’t know how many letters this dive will take. I may break away for other topics and then come back to the topic of angst. The one thing I know, based on my own experiences with family, friends, and business associates and the feedback I get from readers, is that we have a big problem. 

In his first inaugural address, Franklin D. Roosevelt famously said, “The only thing we have to fear is fear itself.” In 1933 that wasn’t even close to true. They had plenty to fear: The US was already in the throes of a depression that would only get worse, and war clouds were forming across the Atlantic and Pacific. 

Roosevelt didn’t have all the right answers, but he did one thing very well: He gave people hope. My generation heard from our parents, even decades later, how FDR helped pulled them through those hard times. 

Of course, he had an important advantage today’s leaders lack: Television, talk radio, and the internet weren’t constantly reminding everyone how terrible things were. We didn’t know or care about the intimate details of our leader’s lives. Today, I am not sure even FDR himself could do what he did back then. Conditions are different now. 

It is becoming increasingly clear to everyone that we are breaking ourselves up into tribes based on how we consume news. We consume our news from people who are generally ensconced in the same ideological bubble we are, which only reinforces our concerns and anxieties. If you think Donald Trump and Paul Ryan are taking us in the wrong direction, there are plenty of people who will agree with you and tell you so. If you think the people opposing them don’t understand and are distorting the truth, there are plenty of sources that will confirm your thinking. And both sides talk/shout over the other. 

We have always had polarization among our news sources (even back in colonial times), but it has never been so ubiquitous before, or so extreme; and the news has never been so readily accessible, so that numerous “tribes” can live in the same physical neighborhood yet hear different versions and interpretations of the problems and directions in our country and the world. We no longer all listen to Walter Cronkite on the radio or TV or read the local newspaper for our news. There is no unifying national experience, just a disjointed series of intra- and intertribal interactions. (This is not just a US problem, but I’m going to be citing mostly US data.) 

Labor market limits 

It’s no wonder that so much of our angst is job-related. Some people don’t have jobs at all while many others don’t like the jobs they have. The millions of unemployed, underemployed, or unhappily employed touch all of us in some way. 

If our nation’s work rate today were back up to its start-of-the-century high, well over 10 million more Americans would currently have paying jobs. And that employment shortfall makes a real difference to the growth of the economy. There are only two ways to grow the economy: You either have to grow the number of people working, or you have to increase their productivity. If you remove 10 million American workers from the labor force, not only are they not producing anything, the vast majority of them are obviously consuming the fruits of the labor of those who are employed. 

As we will see, the number of people dropping out of the labor force is increasing, and if that trend is not turned around, the hope that we will get back to 3% GDP growth is simply wishful thinking. Couple that trend with reduced productivity and we will be lucky to see even 2% growth for the rest of the decade. If we have a recession, we will end up with a lower GDP than we have today. Think about that, and then plug it into federal budget projections. 

Meanwhile, employers feel a different kind of angst. Many either can’t find qualified workers or their workers require constant attention and extensive training to be productive. Neither side of the labor-management divide is happy with the arrangements. Everybody is apprehensive about the future. The common complaint from businessmen is not that they need more capital and the ability to borrow money from banks, but that they need more good workers in order to attract more good customers. 

This widespread dissatisfaction among employers, employees, and those who aren’t working is one big reason Donald Trump is now president. He paid attention to a large group of voters that others ignored, spoke to their anxieties, and won the White House. It was not simply working-class white males that he appealed to; that is far too simplistic an analysis. It was also their bosses, spouses, parents, and friends. A huge swath of the country was experiencing a yawning disconnect between the reality of their daily lives and the supposedly growing economy touted by politicians and media pundits. We focus on the anxiety of the white working-class male, but I challenge you to find me an identity group (however you want to define it) that isn’t anxious and concerned that things aren’t heading in the right direction. 

American culture used to be known for its optimism, its can-do spirit. That quality hasn’t vanished, but it has surely lost some of its luster this century. You can see it fading in the statistics about the number of new business startups, which is now less than the number of businesses closing down. And that trend has been in place for almost a decade. The hope that the situation was temporary probably let people tolerate much worse conditions than they should have. But you can only look on the bright side so long before you get tired of waiting. 

The change in direction that began at about the turn of the century is described clearly in Nicholas Eberstadt’s biting essay in Commentary magazine entitled “Our Miserable 21st Century.” 

I will quote from that essay several times in this letter. If you take the time to read it, you should also read the pushback from my friend John Tamny, published in Forbes a few days ago, titled “Nicholas Eberstadt, Election 2016, and Self-Flagellation by the Elites.” 

Men without work 

One problem is data-related. The “labor force” from which we calculate unemployment statistics necessarily includes only those people who are either working or who wish to be working. It ignores the retired, those in school, the disabled, nonworking spouses, as well as those who are not interested in working. 

That’s always been the case, of course, but the percentages vary. Even a 1% variance in the size of the labor force represents millions of people in a nation as large as the US. So the data got even murkier as the Baby Boomers approached retirement age. The oldest of that very large cohort turned 65 in 2010. Some probably retired early for various reasons. Others worked or will work well beyond the theoretical retirement age of 65, either voluntarily or not. 

Regardless, it is definitely the case that a smaller percentage of the adult population is working now than in the past. The percentage declined in the early-2000s recession and never fully recovered before plunging in 2008–2010. We see only a very slight upturn after the recession ended. 

The problem is particularly acute for men, though it affects women as well. Recently I read a marvelous book called Men Without Work: America’s Invisible Crisis by Nicholas Eberstadt, who wrote the essay in Commentary. The book is fairly short, and I highly recommend it. Eberstadt, who is a researcher at the American Enterprise institute, is very concerned with the large number of men in their prime who simply aren’t working. This isn’t a new development, nor is it restricted to men, but it is becoming more obvious. (At some point I will do a full review of the book.) 

When Federal Reserve officials gathered last week to raise interest rates, they reviewed the data that says the economy is near “full employment.” That notion is laughable to millions of regular Americans. We all know, or at least observe, plenty of working-age males who could be working but are not. They don’t appear in the stats as unemployed unless they are “actively looking” for work. Or they may count as “employed” because they spent an hour or two doing odd jobs that month. But for all practical purposes they’re unemployed, and someone else is supporting them. 

Eberstadt digs into the data and estimates that for every unemployed American male between ages 25–55, there are three more who are neither working nor looking for work. The number of those males presently in the labor force is down almost 4 percent since 2000. That’s about 5 million men who, for whatever reason, have dropped out of the labor force. 

Here’s another and possibly even more startling number. Between 2000 and 2015, the total paid hours of work by all American workers rose 4 percent. The prior 15-year period saw a 35-percent increase in work hours. That’s bad enough, but it gets worse. In that same 2000–2015 period, the adult civilian population grew almost 18 percent. 

With the population growing far faster than the total number of work hours, it shouldn’t be surprising that so many people aren’t working. And maybe they should be –you could surely argue that the work hours will appear if these people get busy and demonstrate their worth. In some cases that’s likely true, but the full picture is more nuanced. The downturn in labor force participation is a trend that has been going on among working-age men for over 60 years, and recently (and somewhat alarmingly) we have seen the same negative trend in working-age women. Let’s look at a few charts from the FRED database of the St. Louis Federal Reserve Bank. 

This first chart shows the overall civilian labor force participation rate, which grew from the mid-’60s right up until the beginning of the century. 

But that chart is misleading. It looks like things were just fine up until 2000, but that’s not the case. The next two charts show what really happened. The first chart is the male labor force participation rate. There is a bit of a statistical illusion in the way the data is framed, but let there be no mistake: The drop-off has been significant. 

The next chart shows the labor force participation rate for both men and women. Note that the participation rate for women doubled in the 50 years up till 2000, while for men it went from almost 90% (87.4% to be precise) to just below 70% today. And that falloff has been steady throughout the entire period. This is not a recent phenomenon, although the downturn has worsened significantly since 2000. Notice that the participation rate since 2000 among women has been dropping at roughly the same rate as for men, at least in the last 6–7 years.

How does it start?

The progression from childhood to working adulthood used to be fairly standard. In an idealized form, which now seems almost mythological, it went something like this. 

You grow up seeing at least one parent go off to work every day. You know from an early age that this is normal and necessary to support the family. When you reach your preteens, you get a starter job of some kind – paper route, mowing lawns, babysitting, etc. Maybe you get a regular job after school or in the summer. You finish high school and gain some independence from your parents by going to college or into the military, or by getting a full-time job, which may involve learning a trade. After a few years of saving your money, you’re ready for marriage and the purchase of a starter home. Then you live happily ever after. The End. 

That sequence, to the extent it ever existed, is pretty rare now. The majority of children grow up in broken homes, see parents hop from job to job with little satisfaction, and in some areas grow up surrounded by crime and welfare dependence. Overcoming that kind of start to get on a positive path is hard. People still understand that education is critical, but it’s also more expensive than ever. Young adults take on student debt only to find the wonderful career they imagined isn’t so easy to come by. 

Then there’s a second category. These are people who may grow up in stable surroundings, make all the right moves, get a good education, and start a rewarding career, only to run into a buzzsaw recession like we had in 2007–2010. They get laid off, burn through their savings, spend months or years looking for work, and eventually give up in despair. Then families break up, people move back in with parents, addictions form, and everything gets worse from there. And if such people do finally get another job, it comes with lower pay and fewer benefits. 

On this topic, here are some quotes from “Our Miserable 21st Century.” 

A short but electrifying 2015 paper by Anne Case and Nobel economics laureate Angus Deaton talked about a mortality trend that had gone almost unnoticed until then: rising death rates for middle-aged US whites. By Case and Deaton’s reckoning, death rates rose somewhat slightly over the 1999–2013 period for all non-Hispanic white men and women 45–54 years of age – but they rose sharply for those with high-school degrees or less, and for this less-educated grouping most of the rise in death rates was accounted for by suicides, chronic liver cirrhosis, and poisonings (including drug overdoses)…. 

All this sounds a little too close for comfort to the story of modern Russia, with its devastating vodka- and drug-binging health setbacks. Yes: It can happen here, and it has. Welcome to our new America…. 

By 2013, according to a 2015 report by the Drug Enforcement Administration, more Americans died from drug overdoses (largely but not wholly opioid abuse) than from either traffic fatalities or guns…. 

In Dreamland, his harrowing and magisterial account of modern America’s opioid explosion, the journalist Sam Quinones notes in passing that “in one three-month period” just a few years ago, according to the Ohio Department of Health, “fully 11 percent of all Ohioans were prescribed opiates….” 

[N]early half of all prime working-age male labor-force dropouts – an army now totaling roughly 7 million men – currently take pain medication on a daily basis. 

The Big Question: Why? 

Again, both men and women are dropping out of the labor force at higher rates, but Eberstadt shows it is more common for men to do so. The trend is getting worse, too. 

Larry Summers shared the above trend chart in his Men Without Work book review. You can see that the trend goes back way before NAFTA and factory automation were big factors. The percentage spikes higher in each recession then falls back, but in a series of “higher lows.” I generally hesitate to extrapolate this far into the future, but after six economic cycles with the same effect, I think it’s fair to call this a persistent pattern. 

If the trend since 1970 does continue, nearly a quarter of all men aged 25–54 will be voluntarily jobless by mid-century. We should all hope the pattern does not persist, because I can’t imagine this scenario being good for anyone. Large numbers of unoccupied young males are rarely beneficial to social order. 

But that outcome is totally possible. Let’s go back to what I was writing a few weeks ago. When six million truckers and taxi drivers are put out of work starting in 2025 (but will surely be out of the driver’s seat by 2040), along with most auto-industry repair and maintenance workers who now repair gasoline and diesel engines, and the auto insurance business too has been decimated, it is not hard to imagine a world in which 20%+ of the population is not part of the labor force. (And that’s just one industry.) 

Set aside the future, though. We have millions of unoccupied working-age males right now. What are they doing all day? Survey data suggests they spend much of their time staring at screens, either TV or video games. They watch a lot of pornography. On average, they are in front of a screen for 2000 hours a year, about what most people spend working a full-time job. Many live with relatives or couch-surf between friends’ homes. They say they’ll look for a job when conditions improve, but that’s always tomorrow. They just drift. 

I can’t find hard data, but I suspect this group works more than the surveys indicate. Much of the work happens off the books as they try to preserve government benefits or avoid child support payments. Nevertheless, they surely don’t have stable careers. Why not? What are the barriers? Here are a few, in no particular order. 

Education: Many of the aimless males barely made it through high school and aren’t ready for college. Maybe they could get ready, but that would take money and dedication few of them have, especially after they are 30 years old. This limits their options to manual labor, low-end service work, or even less positive options. 

Now, it’s easy for someone like me to say these men should swallow their pride and buckle down at whatever kind of work they can get. Yes, they should. But it’s one thing to work in the salt mines when you know you’re on your way to something better, and quite another when you know it’s the end of your road and you’ll never do better. That’s got to be discouraging. Given a choice between jobs like that and playing video games, it’s no wonder so many choose the virtual life. 

Safety Nets: Our well-intentioned social programs can create a disincentive for people to work. That’s not always the case; sometimes people fall on hard times and need a temporary hand up, and society benefits by making them productive again. We need to do a better job of creating the right incentives and avoiding the wrong ones. 

This also goes for disability benefits. You’ve seen the statistics on how many people suddenly acquired debilitating medical conditions during the Great Recession. To my non-physician mind, it seems like distinguishing between genuine disabilities and fraudulent ones would be simple. Apparently it’s not. Here again, we need to consider incentives and deliver the right ones. Eberstadt notes (again quoting from “Our Miserable 21st Century”): 

By the way: Of the entire un-working prime-age male Anglo population in 2013, nearly three-fifths (57 percent) were reportedly collecting disability benefits from one or more government disability program in 2013. Disability checks and means-tested benefits cannot support a lavish lifestyle. But they can offer a permanent alternative to paid employment, and for growing numbers of American men, they do. 

The rise of these programs has coincided with the death of work for larger and larger numbers of American men not yet of retirement age. We cannot say that these programs caused the death of work for millions upon millions of younger men: What is incontrovertible, however, is that they have financed it – just as Medicaid inadvertently helped finance America’s immense and increasing appetite for opioids in our new century. 

Addictions: A startlingly high number of men without work take prescription pain medicines. Others use alcohol or other drugs. I’m sure many really are in pain, especially older men who worked on assembly lines or did other hard labor. Physical pain plus the discouragement of being unemployed plus happiness-inducing substances is a toxic and sometimes deadly combination. Quoting again from “Our Miserable 21st Century”: 

You may now wish to ask: What share of prime-working-age men these days are enrolled in Medicaid? According to the Census Bureau’s SIPP survey (Survey of Income and Program Participation), as of 2013, over one-fifth (21 percent) of all civilian men between 25 and 55 years of age were Medicaid beneficiaries. For prime-age people not in the labor force, the share was over half (53 percent). And for un-working Anglos (non-Hispanic white men not in the labor force) of prime working age, the share enrolled in Medicaid was 48 percent. 

If you qualify for Medicaid, then for your $3 co-pay you can get a prescription for OxyContin. The street value of that prescription is theoretically around $10,000. It’s just the most expensive street drug available. All you have to do is find a doctor willing to write that prescription, which is evidently not that hard to do. (Some 20 years ago, I was prescribed OxyContin in Mexico as a sleep aid (from a very reputable doctor), because I wanted something different from what I’d been taking. One pill knocked me for a loop for 24 hours, putting me into a very strange, mind-altering situation. I threw that bottle away and can’t imagine how anyone can function normally taking that drug. It should be banned.) 

The addictions don’t simply harm the men themselves. They lead to broken homes, unwanted pregnancies, domestic violence, lost job opportunities, criminal records, and more. Eventually you get whole communities riddled with dysfunctional, addicted people. It becomes very hard for anyone to escape the cycle. 

Crime: I am not talking about an increase in crime, because overall US crime is actually in a real downtrend and has been for some time. The actual, often overlooked, problem is the large number of people with criminal records. Obviously, we shouldn’t ignore crimes, but we’ve developed a system that punishes people long after their formal sentence has been served. Many jobs are simply off limits to people with a felony or drug offense on their record, and easily accessible databases mean more employers do background checks now. In Texas, as in many states, you can’t get a simple apartment lease if you have a felony conviction or, in many areas, just a felony charge. Many potential employers simply never follow up if they see that criminal record. And we are talking about a significant part of our population. While there may be “only” 1.5 million men in prison today, that population turns over and has accumulated to startling proportions. Eberstadt sizes up the problem in “Our Miserable 21st Century”: 

We have to use rough estimates here, rather than precise official numbers, because the government does not collect any data at all on the size or socioeconomic circumstances of this [felony convict] population of 20 million, and never has. Amazing as this may sound and scandalous though it may be, America has, at least to date, effectively banished this huge group – a group roughly twice the total size of our illegal-immigrant population and an adult population larger than that in any state but California—to a near-total and seemingly unending statistical invisibility. Our ex-cons are, so to speak, statistical outcasts who live in a darkness our polity does not care enough to illuminate – beyond the scope or interest of public policy, unless and until they next run afoul of the law. 

Think about what this approach does. Even if a man has every intention of reforming his life, he probably can’t do so unless he gets a steady job. That won’t happen unless some employer overlooks his background and gives him a chance. The alternative is to drop out of the labor force and drift, creating and participating in all the other disorderly conditions we’ve outlined. 

Elusive solutions 

As you can see, “men without work” is a tough problem. It’s as much sociological as economic, but it has a serious economic impact. Our moribund economy will have a hard enough time supporting millions of Baby Boomers who lack sufficient retirement savings (that’s a topic for another letter). Adding millions of nonworking young and middle-aged men to the dependency pool doesn’t help. 

Technological solutions may not come to our rescue this time. If anything, technology is aggravating the problem by making it cost-effective for machines to do entry-level work that once needed humans. And while technology does create jobs, it is not creating entry-level jobs that don’t need education and training. 

I started this letter talking about Franklin Roosevelt. He faced a similar problem when the Great Depression put millions of able-bodied men out of work. One response was national service programs like the Civilian Conservation Corps. I’m not sure something like that is feasible now. But doing nothing is not feasible, either. 

My editors, Charley and Lisa Sweet, shared with me these photos of the CCC camp established in the tiny mountain community of Suches, Georgia, in 1933. The Corps helped to build and improve roads, construct three lakes, create infrastructure at two nearby state parks, improve the Georgia portion of the Appalachian Trail, and build trail shelters that still serve hikers today. Camp Woody afforded purposeful work for about 130 men and made a lasting impact in the area. (Photos are from Arthur Woody and the Legend of the Barefoot Ranger, by Duncan Dobie. Arthur Woody was Lisa’s great-grandfather.) 

Men without work eventually become men without hope, and that’s bad for everyone.


* This article is taken from Thoughts from the Frontline, John Mauldin's free weekly investment and economic newsletter. It first appeared here and is used by with permission.

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Brilliant! John Maudlin puts substance to a perspective I have presented before - that meaningful employment that provides a reasonable standard of living is important to national, societal and economic success. Without it the price will likely be more than what we can afford to pay, and likely even today is more than we are willing to admit we pay even now. His perspective is American, but I doubt that it is invalid for NZ

In the absence of jobs, we'll have to somehow unshackle work from income. Unless we go the usual human way and mop up the excess in wars, or set the killer drones to 'civilian'. Humans are happiest with something to do, create, make and produce. How to channel that when the demand for labour often just doesn't exist any more?

According to government accounts in 2016 we spent 28.9 Billion on Social security and welfare (representing 30.16% of total spending). Given the vast bulk of that goes to people who do not work I think it reasonable to suggest we have already unshackled work from income.

Actually it is a bit of a myth that wars are taking an increasing toll of our population. This chart says otherwise.

Historically, it's been the way we've gone when there's excess population pressure and labour capacity to get rid of.

evidence ?

I think we should have a Conservation Corps (voluntary in the sense that one can choose to or not to take it up) - with a maximum period of employment in it being three years between the ages of 17 - 23 years.

The wage would be far better than the minimum wage - enough to allow an individual to provide their own food and accommodation and to save (mandatory) to a level that, after three years would allow the individual to pay the equivalent in fees for their own tertiary education; put a down payment on a property; start a small business - or do with whatever they like with it.

The mandatory savings account would not be able to be withdrawn from until a 24th birthday (once the individual no longer qualifies to work in the Conservation Corp).

Idea being - no unemployment benefits available to individuals within this age group (unless the full three years service has already been served) and no student loan programme, given everyone able to work can afford to pay fees for their own education from the fruits of such guaranteed labour.

and how or who would run it? and doing what?

Likely a new branch of DoC, perhaps the military instead. Masses of work on/in our environment available - work we just don't do at present. Think only on the amount of coastline we haven't regenerated with native plantings yet. The work would be across both CG/LG public land, as well as on private land (e.g., fencing off waterways, reestablishing native forest/wetlands etc).

Here's a link to the US programme mentioned in the article;

Huge amount of work to be done to achieve an introduced predator free country by 2050, much better to be out in the countryside doing your bit than stuck at home on the dole.

I suggest you read up on gene drives.

Exciting stuff, I was vaguely aware of this kind of thing regarding mosquitoes but there's certainly some more potential there.

The problem is that it will be compared to the "workhouse" or slave labour by a certain section of society.

One year of under graduate law degree at Auckland Uni is $6212 so I'd have to save that much (after any tax). Assuming I can live for free for a year in Auckland.

But my birthday is in August so I would have to have a gap year because I couldn't get any of that money in time to pay for my course.

But if I was using the common 20% of income as savings rule I need to get $31,060 after tax, so about $38,000 before tax. Assuming no dependants and no student debt.

Although you say it would be voluntary you also say I can't get any unemployment benefit, so I suppose there isn't as much "choice" as it might first appear.

I hadn't calculated the type of wage that would be needed but figured in the $40Ks. What I think you are objecting to is that having completed your service, and assuming you'd completed the full three years, that you would be disadvanaged given your August birthdate - in that you couldn't start in uni until Feb of the following year - and neither could you collect an unemployment benefit in that time - but you could work, of course. And you'd have three years of valuable work experience with (one assumes) good references as well.

I have never liked our unemployment benefits for two reasons
you get paid for no return to the state (ie work)
it does nothing towards good working habits.
I have always believed it should be set up like a job
you should show up each morning, don't show up on time or with a docs cert get docked
and there are plenty of things that need doing and can be done.
especially around our DOC areas, hospitals and schools
if you get a job interview you get time off to go to it

While I agree, unfortunately, it runs against the leo-liberal paradigm holding pattern. It also runs against the free-market theorem, because these people wouldn't be providing any quantifiable value in some cases.

It would actually cost extra for these people to be employed in this way, as they would need supervision. accomodation, work equipment, and management. Hence higher taxes.

Until we start factoring in externalities, such as societal, and environmental costs, I don't think we will see anything like this.

I thought these people were filling a vital role as soldiers in the Reserve Army of Labour. Capitalism uses them to suppress wages.

yes that is why they now class full employment around 4 %, above that helps keep wage inflation down due to competition for jobs.
below that productivity falls as the least desirable get employed and wage inflation increases due to competition for better quality employees.

Spot on and neoliberalism needs weak individuals separated from family and society so they don't form unions or social groups that could threaten those profits.

Those two reasons can also be applied to property flipping / speculation.

For that to happen central and local government would also need to operate in a different revenue model.

Yeah, radical but we have to somehow break the cycle of poverty that we are committing our young people to.

Excellent article. I'd advise watching the documentary 13th as a companion piece to this..

Yes the 13th is an excellent documentary and quite an eye opener about the US. The BBC have also been running a really good series of radio documentaries about the US working lives heard directly from American public media. Very much worth a listen as it supports a lot of the views from this article.

The Response - America's Story

Here's the equivalent NZ graph.

We don't appear to have quite the same thing going on.

Currently it is still showing 25%+ for men and 35%+ for women as not participating in work. As Maudlin points out there are a number of reasons that this might be the case, but we are not far behind.

Something different happened in the US. With NAFTA free trade squashed a lot of their low end manufacturing jobs. The promise that Bill Clinton made is that US worker that lost their jobs would be retrained. In a sense he only fulfilled half of his promise in that worker lost their jobs, there was no training or education. At best they have non-dischargable student loans and medical bills holding them back.

I guess that social welfare for corporations is actually bad for workers and the economy.

...there is a reluctance of emotion to accept that the US and global economy has followed toward Japanification, a low growth paradigm that is far different than many seem able to more completely comprehend (the Fed hiding this interpretation they now, belatedly, share and giving the public no favors by doing so). Read more

Particularly in Australia and NZ, the general belief is that we're nothing like Japan because immigration is rocketing and housing supply is restricted by institutional rigidity. Therefore house prices will stay help thereby promoting consumer spending and keeping a bottle of Coke at $3.50 while the Japanese and Americans pay south of $2. Positive emotions are high. You can always put it on the house.

Good write up, thank you.

"Is it any wonder that there is a dearth of babies in Japan? It’s hard to get pregnant when a computer avatar is your companion. Young British women are literally 20 times more likely to have a pregnancy out of wedlock than young Japanese women. The cultural oddity of moe partially explains that fact. "

excellent we should adopt the Japanese right away.

The wages for women are 12% lower than men for the same job or so they say; why would a competitive business employ men at all?

An interesting article to read and I had to think about it a bit. What strikes me is the likeness to the Depression. All monetarism has done is lessen the impact and to an extent conceal it. A shame that politicians want to apply the neoliberal technique of blaming those with no jobs and seemingly no purpose for their predicament. Not uncommon during the Hoover era.

We do need to seriously rethink how our societies work and the obstruction to contributing (not necessarily directly paid work).


A while back we had Mary Lambie fair rubbishing our young Kiwi workers not to mention the PM chiming in with similar poison.
Here is an exert: "We were operating in that $15-$20 an hour model. I would put the ads out, I would be wanting workers. Some Kiwis would apply", Ms Lambie told Duncan Garner on The AM Show. "They were useless. Absolutely useless. Particularly young Kiwi men. I'm talking, sort of, under 21. Unreliable, dishonest, lazy." The full interview is available on this link:

So we have what appears to be a campaign to denigrate a sizable minority of our population - completely erroneously IMHO - with the (unintended?) consequence that any one listening will think twice before employing any young Kiwi men.
I questioned the Human Rights outfit about these comments and received this laughable response: "they do not reach the threshold of being discriminatory, i.e. there is no disadvantage to a person or group of people in an area of public life such as their employment, education or access to services"
So this is somehow OK; what would the reaction be if similar comments were aired about some other nationality/ethnicity?
I don't really mind Mary having a bit of a rave but are we really going to countenance the development of a massive double standard. We are on a seriously slippery slope if we are. What do you think?

80% of the work is done by 20% of the people.

I think it depends on whether it is true they were "unreliable, dishonest and lazy", or not.

If true, then you are simply describing poor character.

If not true, then you are unjustly judging others.

It's interesting that they have an expectation of a high quality worker while only offering $15-$20. Whoever you hire isn't going to give a damn with pay like that. Although I wonder if the workers just reflected the values of the employer.

If often seems immigrant workers are in fear of keeping a visa, and it has been known that immigrant workers pay money to get a low paying job (that job a step toward residency).

Subway, being a franchise business, may be like the other big franchise businesses in Australia, pizza hut, 7/11, petrol stations, that sometimes seem run so that franchise holders have difficulty paying even award wages.

So there is much wage fraud.
With the whole franchise business model relying on franchise holders paying fees as a % of turnover to the head group and buying inflated priced supplies from the head group and paying fees to the head group. The head group pits franchise holder against franchise holder.

There are cases where even if a worker obtains a payslip, chances are the wage slip is fake.
There are cases where 7/11 workers in the car park have had to hand back half there minimum wage back to the franchise holder.
There are stories of pizza hut folk using sweepings to save on toppings

best take sandwiches from last nights roast.
just eat the box.

There's always been an element of gormlessness, but you can train them out of it.

Meanwhile, criminal gangs are thriving, because in some places, that's the most reliable way to get into an industry at the bottom, albeit an illegal one, and also a way into the semi-legit businesses used to launder money.

I agree - thought of taking a BSA complaint regards Mike Hosking's rant on TVNZ repeating (and worse) English's incorrect facts on the Kiwi's can't pass drug tests matter - but got busy elsewhere.

The BSA are sometimes worthwhile however - my most recent complaint about The Rock FM skit with JK in the cage being discriminatory/offensive. That was upheld - although I requested that JK do the apology as well alongside the broadcaster... that part I didn't get (JK was not told by them to apologise but the Rock had to);

Lambie only gets the opportunity to rave via the media because she she was once part of the family.

David George, bravo for complaining about this. I see a connection with the recent trouble at Auckland Uni where some students wanted to set up a European Students Association with the motto, "strength through honour". They were shot down and threatened with violence for such audacity. Yet I would have thought such an ethos would be beneficial to being an employee and a citizen. Young European Kiwis probably need some community spirit and fraternity to raise them up a little if people are currently bypassing them for employment and choosing superior immigrants. Especially so if they are becoming "absolutely useless". It was a real shame to see this occur. It makes many of us think that multi-culturalism may be a sham. They are being asked to facilitate multi-culturalism while being denied participation.

Thanks Zach, scary how we are loosing objectivity when it comes to public discourse. One would expect that university students would be among the most open to various points of view but, given the level of hate directed at the European students group, they are clearly afraid of any position outside a preordained set of values. Likewise, it would appear, with the institutions set up to engender fairness to all with Susan Devoy (Race Relations Head) chiming in that she would be keeping an eye on the proposed group. I wonder if she has considered doing the same with Black Power Aotearoa?
Where all this came from is unclear but it looks to me that a "liberal" set of values is anything but.

In the mid 1800's we mandated a 40 hour week in the 160 years since the spoils of growth that been shared between capital and labour (helped ironically by a couple of culls mid the 20th century) but in the last few decades and looking into the near future it's all biased to capital, has been more so in the US due to their consumption heavy economy being prime for the soporific effect of cheap imports courtesy of globalisation.
My solution is to mandate a 32 hour week.
By the way I don't see any benefit in a guaranteed minimum income scheme, it is simply another social sedative.

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