Funemployment!

In a brilliant article, Richard Vedder dissects the incentives government welfare programs have created to attract Americans to a life of sloth, and the impact a nation of layabouts is having on our economic growth.   Here's an excerpt:

If today the country had the same proportion of persons of working age employed as it did in 2000, the U.S. would have almost 14 million more people contributing to the economy. Even assuming that these additional workers would be 25% less productive on average than the existing labor force, U.S. gross domestic product would still be more than 5% higher ($800 billion, or about $2,600 more per person) than it actually is. The annual growth rate of GDP would be 2.2%, not 1.81%. The retreat from working, in short, has had a real impact.

 

Why are Americans working less? While there are a number of factors, the phenomenon is due mainly to a variety of public policies that have reduced the incentives to be employed. These policies include:

 

• Food stamps. Above all else, people work to eat. If the government provides food, then the imperative to work is severely reduced. Since the food-stamp program's beginning in the 1960s, it has grown considerably, but especially so in the 21st century: There are over 30 million more Americans receiving food stamps today than in 2000.

The sharp rise in food-stamp beneficiaries predated the financial crisis of 2008: From 2000 to 2007, the number of beneficiaries rose from 17.1 million to 26.3 million, according to the Department of Agriculture. That number has leaped to 47.5 million in October 2012. The average benefit per person jumped in 2009 from $102 to $125 per month.

To be sure, we would expect the number of people on food stamps to increase with rising unemployment, poverty and falling incomes in late 2008 extending into 2009 and perhaps even into 2010 (even though the recession was officially over in late 2009). But more is going on here.

Compare 2010 with October 2012, the last month for which food-stamp data have been reported. The unemployment rate fell to 7.8% from 9.6%, and real GDP was rising steadily if not vigorously. Food-stamp usage should have peaked and probably even begun to decline. Yet the number of recipients rose by 7,223,000. In a period of falling unemployment and rising output, the number of food-stamp recipients grew nearly 10,000 a day. Congress should find out why.

I can tell you why.   Human nature is why.   Government programs that reward sinners -- the natural sloths among us -- are bound to expand.