The Great Vacation

by Dave Schuler on January 16, 2013

I must say that I disagree with Richard Vedder’s explanation for why fewer Americans are working than ever before. In essence he subscribes to the “Great Vacation” theory of decreasing labor force size and blames the following:

  • Food stamps
  • Social Security disability payments
  • Pell grants
  • Extended unemployment benefits

I think that those measures do have some effect but probably not more than few percent of those who’ve left the labor force have done so because those handout programs have made not working so darned attractive. I think that any of the following are probably more significant in explaining what’s changed:

  • The rise of temporary and part-time work, at least partially as a response to various government requirements
  • Transportation costs
  • Two (or more) job families
  • Regulation or fear of regulation inducing companies to move jobs that people are actually able to do overseas
  • Currency manipulation by foreign governments making imported goods cheaper than domestically-produced goods

That’s just off the top of my head. I also think there’s a larger factor. People today don’t realize how hard we used to work. I used to work 60, 70, or 80 hour weeks. I didn’t get paid overtime or even receive comp time. It was just what the job required so I did it.

{ 60 comments… read them below or add one }

TastyBits January 16, 2013 at 10:30 pm

@steve

We got mediocre health reform.

The problem is that 20% of people use 80% of the healthcare budget, and the bill does not address this problem. Instead, the bill solves a problem that did not exist, and it creates a problem where there was none.

What would complete failure look like?

Janis Gore January 16, 2013 at 10:48 pm

What the hell are we going to do next?

I like windows. Maybe I’ll wash windows. Nobody does that.

Janis Gore January 16, 2013 at 10:49 pm

That doesn’t begin to address Icepick’s problems, but it might mine.

Janis Gore January 16, 2013 at 10:52 pm

Residential windows.

Janis Gore January 16, 2013 at 10:58 pm

How do you price it?

People will trust me. I’m Travis Gore’s daughter-in-law.

Janis Gore January 16, 2013 at 11:00 pm

I like physical work. It’s a problem when it comes to income.

Janis Gore January 16, 2013 at 11:09 pm

Dammit, I look just like Daddy.

Icepick January 17, 2013 at 12:14 am

Janis, I will not help you with statistics. I never liked the subject. It lacks the elegance of algebra, the trickiness of analysis and the mind-warping properties of number theory. When the time comes I will teach my daughter, but she is the only person for whom I would make that sacrifice.

Janis Gore January 17, 2013 at 12:19 am

Cool. Preserve your best for your daughter.

Dave Schuler January 17, 2013 at 8:03 am

I think it will take a long time work off that debt overhang.

The terribly sad thing is that so little attention has been paid to working off the debt overhang compared to, for example, ordinary pump-priming efforts via infrastructure spending or tax cuts. The assumption of the pump-priming effort was that we were experiencing a conventional cyclical recession. That was wrong.

Tax cuts don’t do much about debt overhang for the simple reason that the people who have large debts aren’t the same as the people who pay lots of taxes. What good is a couple of grand in tax cuts when you’ve got a half million in debts you can’t pay off?

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