On Putting the Freeloaders Back to Work

In case you still believe that Donald Trump is not accomplishing important work behind the Twitter smokescreen, consider the issue of “welfare reform,” otherwise known as putting the freeloaders back to work.

According to government statistics, there are about 6.9 million unemployed in the US, and roughly 6.2 million available jobs. The match between jobs available and people currently out of work is not perfect, but people who want to and intend to work can usually find a starter job to work up from in the Trump economy.

Overly Generous and Over-available Welfare Shifts Incentives

Unfortunately, it is in the human nature of many persons to not want to do work unless they need to do so. And if someone will pay them not to work — as in welfare etc. — their incentives are shifted toward not working.

President Trump wants to shift the incentives back:

Right now, America combines near-record-low unemployment with near-record-high welfare dependency — the result of state-level eligibility exemptions, federal loopholes and policies that put work on the back burner. Many of these policies created incentives for able-bodied adults to sit on the sidelines — even though there is good, well-paying work to be done. The resulting safety net isn’t a safety net at all — it has entrapped able-bodied adults in dependency and threatened resources for the truly needy.

But welfare reform can change that. And the Trump administration has just given agency leaders a road map to do so.

The executive order, signed Tuesday afternoon, lays out principles to encourage economic mobility through work — a tactic that we’ve seen succeed in states across the nation. It calls for a strengthened work requirement for able-bodied adults, building off the requirement established in the 1996 bipartisan welfare reform that requires able-bodied adults on food stamps to work, train or volunteer for at least 20 hours per week. __ New York Post

The late president Obama expanded availability and generosity of welfare benefits to record levels, with predictable results. The number of people on welfare exploded. Of course, with the dismal economy that Obama provided to them, opportunities were not what they should have been. Even so, perhaps every grammar school student should be sent on a tour of sub Saharan Africa to gain an understanding of what true poverty and lack of opportunity look like.

Manufacturing Jobs Reappear

According to the U.S. Labor Department, the number of manufacturing jobs nationwide grew by just 0.1%, or 18,000, in 2016, the last year of the Obama presidency. But since the beginning of 2017, manufacturing employment growth has averaged more than 18,700 a month, according to National Association of Manufacturers economist Chad Moutray. In March, even as overall payroll job growth slowed, manufacturers added another 22,000 workers.

The surprising resilience of manufacturing employment is good news for American workers.

On average, according to the U.S. Commerce Department, annual compensation (including the cash value of health insurance, pension fund contributions, and other noncash benefits as well as wages and salaries) per American manufacturing employee is $77,268, or roughly 60 percent higher than per employee compensation across the entire nonagricultural private sector. __ Source

Start-ups and the Gig/Patchwork Economy

Besides jobs that are available already, US residents can “create their own jobs” by starting their own businesses and/or dipping their feet into the gig-patchwork economy:

The gig economy is booming. And some think gig work could become the norm in the future. A study released in September by the Freelancers Union and Upwork predicts freelancers will make up a majority of the U.S. workforce within a decade.

“The world of work is changing, the gig economy is here, it’s here to stay, it’s growing, and you best prepare to work that way,” says Diane Mulcahy who teaches a class on the gig economy at Babson College.

And the gig economy is not just about tech-based platforms, like TaskRabbit. That’s less than 1 percent of the gig economy, according to a 2016 Harvard-Princeton study. The gig economy is mostly freelancers, contractors and part-time workers. That’s because companies now offer fewer full-time jobs.

“If you look at our most highly valued and high growth companies out in Silicon Valley — Facebook, Dropbox, Twilio, Twitter — they’re not creating full-time jobs at the same rate as, let’s say, you know, the old GEs of the day where they have 300,000 full-time employees,” says Mulcahy, who has also written a book about the gig economy.

Gig work is also on the rise because people like the flexibility of it, and technology has made it easier to connect people to jobs.

The patchwork or “gig” economy consists of people who choose to go from “gig” to “gig,” in a freelance manner. It is a form of self-employment or independent contractor status. At this time, most patchworkers act as the agents, brokers, and managers of their work. But there is an entire looming industry and software sector growing up around the phenomenon.

Once a person experiences success in self-employment, he will look at the entire economy — and how politics infringes on the economy — in a different way.

Education for the Gig/Patchwork will Be A Horse of a Different Colour

The dominant viewpoint toward education in North America revolves around the old “train to get a job or specific career” mentality. But what happens when most people have several different careers? What happens when they are able to shift from one area of work to another at the drop of a dime — or a shift in economic conditions? In such a situation, it is the broadly competent and highly flexible worker who is at an advantage. How do you educate and train someone to be that kind of worker? Certainly not via the mainstream antiquated system of education that exists now.

Dangerous Children master at least 3 distinct ways to achieve financial independence by the age of 18. But they are not conventional children, and stay far from the mainstream in virtually every way — especially in the sense that they are always ready to deal with rapid changes.

Pay attention. Make provisions for a changing world.

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6 Responses to On Putting the Freeloaders Back to Work

  1. JerryO says:

    Great post, as always !

  2. Pandora says:

    The “gig economy” is not the panacea you seem to think it is.

    When yeoman farmers lost their farms to mechanization and had to find manufacturing work in the cities, it was a step down, not up.

    When lifelong “career” employees found themselves unable to negotiate higher pay at their current companies and had to resort to hopping between companies at 3-year intervals, it was a step down, not up.

    When the availability of full-time work, even full-time work at 3-year intervals, disappears, it will be a step down, not up.

    It is not that “self-employment” is the future, it is that the line between so-called “self-employers” and itinerant laborers is to become increasingly indistinct.

    • alfin2101 says:

      Panacea? Of course not. Still, facing facts, the age of going to work for one company until retirement is long gone. Even universities are cutting back on tenure and trying to find ways to revoke it more commonly, where possible.

      Each person must find his own way to cope with inevitable change. Making oneself as broadly competent as possible — including business and entrepreneurial skills — is not a step down. Strong societies need strong citizens — not one trick ponies for life, no matter how comfortable they may have it.

  3. Craig Willms says:

    Correct… The gig economy is reality and probably the future – but I agree it is not a step up unless your partner/spouse has a job with health benefits and can cover you. I’ve looked into it and at my age it may be the only way I get work in the future, but my wife is going to keep her steady job because she can cover our health care if we need it. If we had health care system that worked, not tied to your job then the gig economy might be fabulous for a lot of people. But our health care system is a mess (and I don’t advocate a government controlled system – just something reasonable, rational and logical)

  4. I read the piece on the internal social decay prevalent in Russia. This “gig economy” looks like America’s version of it. How do a couple bond together and successfully produce the 2.5 children necessary to maintain population with such an uncertain income — especially when you look at how much it costs just to birth a child into the world now, much less to raise one? We like to believe that economics is the foundation of everything, but ultimately it is our own biology. We must have an economic system that works with human biology and not against it.

    • alfin2101 says:

      Quite right. Clearly current economic systems from Europe to the Anglosphere to Russia to East Asia do not readily facilitate a sustainable human population.

      Paradoxically, in sub Saharan Africa and a few other places of the impoverished third world, population growth is exponential. But the strategy for creating progeny in such places is quite different, without the heavy investment in child raising one sees in developed nations. And such places would never be able to build these population booms without the outside assistance of more advanced populations, and market dominant minorities living within the backward nations.

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