Turn on, tune in, drop out
-Timothy Leary
Not long ago, I began to wonder about the part-time work phenomenon in general, but the non-economic part of the equation, specifically. In 2006, the average month saw 2.2 million people forced into part-time work because of the economy, while 19.6 million chose to work part-time for other reasons. Fast forward; 7.2 million Americans are working part-time for economic reasons, and after declining those working less than full-time for non-economic reasons, is back to 19.2 million. This is part of a long-term trend sure to continue, now that the new healthcare law has made it so enticing to 'turn on, tune in, and drop out.'
The long-term trend (see chart) is clear that while many complain about limited options and onerous work demands on Americans, more and more choose to work part-time for reasons that have nothing to do with the economy. In fact, that segment of the work force has expanded 375% since the mid-1950s, while overall labor force is up 156%.The ability to collect more and more government benefits over the years has been a major underpinning of this trend. For many that have accepted this Faustian deal, the fact is life isn't any better when you become a ward of the state, and you accept a place in society devoid of pride.
"We need a better work-life balance. Ask a working mother if she could use a few more hours in a day to take care of her family." -Congressman Keith Ellison
Democrats went all out over the weekend portraying the 2.5 million people that will flee full-time work as a good thing, assuming many would be women, particularly single mothers (Chuck Schumer brought up the same single mother with three children used in the minimum-wage debate, making me wonder if that's off the table now?) When Congressman Ellison (D-MN) said, a mother could use a few more hours in a day to take care of her family, it made me wonder if these guys think women have no dreams of owning businesses, being successful, or having career-oriented fulfillment goals; beyond household chores.
But it was this old chestnut, the underpinning of the socialist movement in America; if the Europeans are doing it; it has to be the right thing.
"If you look at international comparisons country by country, Americans work way more that the average of industrialized countries around the world." -Congressman Keith Ellison
It's long pastime that we should be using Europe as an example of what NOT to do. Still, somehow there are enough people out there that think their free healthcare is really free and really effective. It's neither; it just means that our healthcare quality and availability will deteriorate as well. In the meantime, see how GDP of the hardest working nations in the world have stacked up against those enlightened, industrial nations that work less hard.
Working Hard to Stay Number One
It's not a coincidence that America's peak and largest percentage of global GDP happened in 1950, (see colorful chart) when the average worker put in 1,920 hours annually. That number has drifted steadily since then to 1,798 hours, keeping the nation in the top-ten, but not for much longer. America put it in neutral, and saw major industries lose their grip on supremacy...the same could happen to the entire nation.
The idea that people should be working the hardest to climb off the lower rungs of the economic ladder should be cheered, and encouraged to move to the sidelines makes no sense to me, and it isn't about kindness. It's about a form of indentured servitude. It comes from the same wellspring that took a city like Detroit, and turned it into a modern-day American ruin.
Today's Session
All eyes will be on Janet today. The Yellen Fed swings into full view with testimony on Capitol Hill today. Her prepared statement leaves a lot to be desired, and opens up serious questions.
"The recovery in the labor market is far from complete" - Janet Yellen
A threshold of 6.5% unemployment and 2.0% inflation will be reiterated but with the current unemployment rate at 6.6%, this implies more tapering not less. Of course Ben Bernanke made sure everyone knew his parameters were more or less guidepost not triggers for automatic action. Yellen has taken the same position, which means we have no idea what parameters determine Fed policy decisions. I will say it is obvious real unemployment is too high, and to coin a phrase, "far from complete."
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