“Are we seeing the beginning of the end of work?”

That is a request from Hoover.  Catherine Rampell writes:

In February, for example, just 64.2 percent of adults were either in a job or actively looking for one, representing the lowest participation rate in 25 years.

At the same link you will see evidence that the number is likely to decline.  Some women are less eager to work, some men are quitting the search for work, and there is a general aging of the population.  Fewer students work while they are in school.  Here are further links to future projections.

That’s hardly the end of work but one thing dramatic recessions can do is to reveal new pieces of information.  By overturning the table, we (sometimes) see which pieces of the puzzle did not fit in the first place.  One result of this recession is that we will revise downwards our estimate of the labor force participation rate, both current and future.

A few questions are:

1. What is the political economy of a world where so few people work?

2. What kind of low-rent areas will evolve to accommodate some of these people?

3. Will we in fact move to some form of a guaranteed annual income?

Note that the answer to #2 will affect the feasibility of #3.  And our current notion of “protecting all the old people” against major health care catastrophes may someday be seen as an anachronism.  The more progress medicine makes, the harder this will be to achieve and afford.  Feasible future equilibria all seem to involve death panels, which actually may make #3 seem more attractive, relatively speaking, than spending so much money on Medicare.  Rationally or not, once the moral principle is admitted of not giving everyone absolute protection against every extreme health care event, this may encourage a shift toward cash transfers.


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