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Economics 101

Liberals, buckle your seat belts.

Economics 101
Eagle Rising

Liberals, buckle your seat belts because we are about to embark on an exciting journey. The name of this voyage is called Economics 101. Now, I know some of you guys are probably going to feel some type of way over the content of this article. But as we are nearing the presidential elections, and King Obama’s reign is coming to an end, I only thought it was appropriate to write on this topic. Partially because it is one of the most interesting and important topics of discussion rarely discussed in the democratic debate, and partially because I just turned in a huge information literacy project about this very topic yesterday.

Currently, as of March, according to the Bureau of Labor Statistics, only 63 percent of adults are either currently employed, or are unemployed. In order to be considered unemployed you must not have a job and you must be actively searching for a job within the past month. This means that 37 percent of adults are not in the labor force. That means that around 96 million adults in the United States are not working, nor are they searching for work.

Out of these 96 million adults, 1.46 million are actively serving in the US military, approximately 5.2 million are stay at home parents, and 20.2 million are students. Out of 20.2 million students 4 out of 5 are working at least part-time. So that means 4.04 million students are included in the 96 million that are not in the labor force.

This leaves a huge number of adult Americans just simply not looking for work. Now I don’t know every single person’s life story or their background or their reasoning for not working. But I do know that there is a huge number of Americans out of 96 million who are not working simply because it is easier for them not to.

The incentive to work has greatly decreased within the past six years. This can be attributed to the increase and variety of welfare benefits. University of Chicago’s economist, Casey B. Mulligan said that “the stimulus legislation, which lengthened the insured unemployment period, increased food stamp subsidies, and initiated programs related to health and mortgage assistance that required low income status,” (Litzinger, 7). The very structure of the welfare program that gives so much when someone is without work, but as soon as work is found these benefits get cut off. So why work? This isn’t to say that these people are bad people, one can look at it as them being rational, choosing which is easiest for them. However what is easiest isn’t always what is right- that and the way the government runs these welfare programs are to blame. “The best empirical analysis was written by Gary Alexander, the former Secretary of Public Welfare of the Commonwealth of Pennsylvania. He writes: “… a welfare recipient with two children earning a gross income of $29,000 would receive the sum of $57,327 in net income and welfare-assistance benefits, if you count the value of the housing – choice voucher, food stamps, daycare subsidies, and medical assistance. The same household would have to earn a gross income of $69,000, with a net income of $57,045 to enjoy a comparable standard of living. In other words, if the welfare recipient were earning a gross income of $29,000, the household would turn down an opportunity to earn a gross income of $30,000 because the benefits begin to fall off, making that household financially worse off.” (Litzinger, 7).

The welfare system was meant as a safety net so that people can get back on their feet. During Bill Clinton’s presidency, in 1996 the welfare system was reformed. “Before the Welfare Reform Act of 1996, welfare assistance was "once considered an open-ended right," but welfare reform converted it "into a finite program built to provide short-term cash assistance and steer people quickly into jobs.” And guess what happened? People found jobs! There was a 60% drop in people on welfare, employment rose, and child poverty decreased. This type of government assistance had a time limit. And it worked. It gave Americans the incentive to get a job and to support themselves and their families, rather than relying on support of the government funded by taxing the working class. This is how the welfare system should work.

Now before someone jumps me or tries to put words down my throat, I am not trying to shame people on government assistance. I do not think that there is anything wrong with receiving some help during a time of financial struggle. I do believe that people should be helped in order to get back on their feet. What I do think is wrong is for people to take advantage of this system simply because they don’t want to work. This doesn’t help anyone. I once met a man living completely off of government assistance because he didn’t find a job that he “liked” and he had informed me about his recent purchase of his second boat.

Now, to the picture floating around on Facebook of Barack Obama with a statement implying that he reduced the unemployment rate, that is only half true. Yes, within the recent years the unemployment rate has dropped. But so has the labor force participation rate. Unemployment rate has dropped because there are less people who are considered “unemployed.” Not because there are more people with jobs. If someone is not looking for a job, they are not considered unemployed so they are automatically excluded out of the unemployment rate. Liberals, this is not something to be proud of.

And to all of the people accusing republicans of being not empathetic towards the less fortunate or for hating poor people and only wanting to support the wealthy, I have a message for you: Most republicans do not have a problem paying a little more in taxes if the taxes were actually being spent well instead of being blown by the government. Have you hear about the social security dilemma? Yeah, that money was blown.

Most republicans, just like most people in general, do not have a problem giving some assistance to people who need to get on their feet and who have reached out for help as long as they are trying to help themselves as well. It becomes an issue when government assistance is given so loosely that people can remain on it for years and years without lifting a finger to try to even find work. Most “rich” people don’t have a problem giving extra money than people who aren’t as fortunate as long as it is going to a good cause. That is why the majority of wealthy people give to charities.

So please, next time you try to bash a republican for being an “insensitive a**hole”, educate yourself on the reasons behind the frustration and think about what will improve the economy as a whole in the long run. When the economy is doing well, it is beneficial for everyone.




REFERENCES

Bureau of Labor Statistics: bls.gov

Boundless. “Welfare Reform.” Boundless Political Science. Boundless, 13 Apr. 2016. Retrieved 14 Apr. 2016 from https://www.boundless.com/political-science/textbooks/boundless- political-science-textbook/social-policy-17/the-welfare-state-105/welfare-reform-560- 5931/

Litzinger, P. J., & Dunn, J. H. (2013). The labor force participation rate: An examination of the determinants of its recent precipitous decline. Journal of Applied Business Research, 29(6), 1873-n/a. Retrieved from http://search.proquest.com.ezproxy.gvsu.edu/docvie...

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