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A Labor Force Participation Rate Update

I wish I could say there is good news in this report. But the best I can offer is that some trends seem to have leveled off. At this point, however, it’s safe to say the U.S. economy has lost a substantial number of young potential workers who will never make up the ground they have lost.

In some of my other research I’m exploring the possibility that these younger people may actually be working in the “informal sector” (also called the underground economy or hidden economy). It’s possible that the growth of this sector has absorbed some young people, meaning that the reported LFPR’s are lower than the actual participation rate. … Consider the Affordable Care Act. This plan fundamentally requires young people to subsidize health insurance for older people. One way to avoid this tax is to not report any income (and therefore not file any tax returns). Working off the books for cash probably looks like a pretty good deal to some of these folks. Continue Reading →

“Freeing Workers From the Insurance Trap”

The Times editorial board has now officially become a propaganda wing of the Obama administration. Updated Feb. 6 to include a video clip showing CBO Director Dr. Douglas Elmendorf replying to questions from Rep. Paul Ryan (R-Wisconsin). Dr. Elmendorf confirms that the reduction in labor supply directly leads to the CBO forecast of lower economic growth. Continue Reading →

The Times Has Discovered That Costs Matter in Obamacare

“The Chapmans acknowledge that they are better off than many people, but they represent a little-understood reality of the Affordable Care Act.” … Perhaps this was “little-understood” by the geniuses who run the New York Times. But many economists, including me, pointed out that costs and prices would inevitably rise given the mandates and rules included in Obamacare. Continue Reading →