Wednesday, May 11, 2011

Pushing on a String and the Old Crowding Out Hypothesis

David Brooks has a provocative column yesterday, The Missing Fifth, about males ages 25 to 54 who are not employed. The lower bound of that range is presumably to allow traditional college students to fully matriculate, though those going for advanced degrees might still be in school at age 25 or, alternatively, to complete a tour of military service or perhaps to sow enough wild oats to figure out which way is up. The upper bound of the range signifies the end of the most productive years of our lives. Thereafter, we're on the down slope. I'm now 56. Thanks for the reminder. In the year before I was born, about 96 per cent of all males in this age category were employed. Now it is closer to 80 per cent. (Black unemployment, which Brooks' colleague at the Times, Bob Herbert, rails about frequently, has been horrific for as long as I can remember. I wasn't around in 1954, the year when the overall male employment rate was 96 per cent. I wonder what the Black unemployment rate was then.)

Brooks opts to focus on the disabled in his piece and argues that the incentives are all wrong to get people who suffer a workplace disability to later reenter the labor market and resume a productive life. That point is almost certainly true. On my campus we have many very strong advocates for equal education of people with disabilities (which is the law) so these people can be fully productive after they graduate and so they can be treated with decency while they are students. But the advocates meet resistance from otherwise liberal thinking faculty and administrators (and sometimes I've been in one of these roles) because making an accommodation in advance of the need seems too costly. This semester I've taken to caption the videos I produced for my intermediate microeconomics class, in part just to know whether it is do-able. If you stretch the meaning a bit it is, but it is also very time consuming. It is very hard to imagine other instructors producing videos who would likewise willingly caption them. These instructors would demand that the captioning activity be outsourced, on somebody else's nickel. That can work if not too much such video is produced overall. Otherwise, it will break the bank. This, I take, serves as a metaphor for other workplace accommodations that should be made. We should be doing these things. But at scale it won't happen unless there is a big push from government. Unfortunately, ADA is not in itself sufficient.

Brooks doesn't spend much time on the physically able but socially maladjusted males who don't find regular work. He has a few bromides in the piece about government programs that might help address the problem. I don't think he is convincing on that, however. How do such people survive? I can come up with some answers, but none of them are any good - selling drugs, pan handling, mooching off of other family members, etc. It is now a vogue to indicate that marriage is increasingly scarce among lower income adults. The males who are unemployed in this age category may very well be parents, but they likely don't live with their children. The sense of obligation that emerges from responsibility is likely missing. Government programs probably can't instill that sense of obligation. On that point, I'm probably more Republican than Brooks. But it also can't happen if when trying to be responsible these people see no upside whatsoever from making an effort. Perhaps government programs can help create such an upside, though contrary to what Brooks argues, that likely is near impossible as long as the overall unemployment rate remains distressingly high.

Near the end of the piece Brooks segues into talking about health care spending, and argues that in the Federal budget it is crowding out discretionary spending (the type that might be used to address the missing fifth problem). This argument is surely true, if the percentage of Federal spending in GDP is capped. Then as more is spent on health care for the elderly less must be spent on everything else. But capping Federal spending in this way is entirely artificial. If we have a fundamental structural change in our society due to extending length of life and the concomitant aging of the population, why shouldn't we adjust the Federal share of spending to reflect that change?

And then, if we do start thinking of using discretionary spending to reshape the future productive capacity of the male population, while money would be well spent in efforts to raise the productivity of the missing fifth, let's not ignore those older males who are on the down slope. The goal would be to flatten out the decline and extend that part of life where these people can contribute productively. We can endlessly debate how much health care should be consumed by those seniors who have gone over the cliff. But surely one way to keep that spending in check is for these people to defer hanging up the uniform.

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