Sentence of the day

by Russ Roberts on May 4, 2012

in Work

From John Merline, Investor’s Business Daily:

The civilian labor force shrank in April by 342,000 workers, and remains below where it stood when the economic recovery started 34 months ago, according to data released Friday by the Bureau of Labor Statistics.

From later in the article:

Compared with June 2009, the month the economic recovery officially started, the labor force has shrunk by 365,000, a trend that has never occurred in any post World War 11 recovery. Those saw the labor force climb by the millions by this point in their recoveries, even as unemployment rates were driven down.

At the end of the article, Merline references the surge in disability applications (and check out this EconTalk episode with David Autor on the topic):

So far this year, nearly 1 million workers have applied to get on the disability program. According to the Social Security Administration, more than a third will eventually be enrolled in the program.

Almost 90,000 workers enrolled the program in April, pushing the total for new enrollees over 333,000 in the first four months of the year.

If you add in spouses and dependents, the number of beneficiaries added to the program so far this year climbs to 539,000.

AsĀ IBD reported recently, more than 5 million workers and their families have enrolled in the disability program since Obama took office.

The article closes on this cautionary note:

A report last fall from the Obama administration’s economic advisers warns that the mass exodus of workers who can’t find a job onto the disability rolls poses a long-term risk to the economy, since once enrolled, these workers almost never return to the active workforce. This can, the report said, result “in a loss to society of the economic contribution those workers could have made.”

What does it mean that having a lot of people not working results in “a loss to society of the economic contribution those workers could have made.” These non-workers have decided that taking disability is more pleasing than whatever else they might do. Is that really what’s wrong with people not working? They don’t contribute “to society?” I have always disliked the idea that there is something called “society” or the “economy” that is separate from the people who inhabit it or work (or don’t work) there. We are the economy. There’s no economy separate from us over there somewhere.

Rising dependency (especially the way the disability program is structured is not bad because it is a “long-term risk to the economy.” It is bad because it is not good for people to live off of other people without their consent or to be paid not to work if there is in fact something they can actually do that is productive. That is good for the rest of us and for them. The economy is not important independently of that.

 

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