Economists Catching Up With BTL

Have we created a Lost Generation?

This is not a good time to be starting out in life. Jobs are scarce, and those that exist often pay unexpectedly low wages. Beginning a family — always stressful and uncertain — is increasingly a stretch. The weak economy begets weak family formation. We instinctively know this; several new studies now deepen our understanding.

When the labor market operates smoothly, it creates an economic escalator. Just out of high school or college, young workers typically switch jobs frequently until they find something that fits their talent and temperament. Job changes often mean higher pay; people move to advance themselves. The more they succeed, the more confident they feel in marrying and having children.

The most startling evidence of the broken escalator is the collapse in marriages and births. Marriage has been declining for years. Now, in a new study, the Pew Research Center finds that in 2011 the U.S. birth rate (births per 1,000 women between the ages of 15 and 44) fell to its lowest level since at least 1920, the earliest year of reliable statistics. From 2007 to 2011, the U.S. birth rate dropped almost 9 percent. The total fertility rate — the estimated number of children born to adult women in their lifetime — has fallen four straight years to 1.9 (the replacement rate is 2.1).

States with large economic setbacks suffered steeper birth rate drops, Pew says. Interestingly, births to immigrants fell more sharply than for native-born Americans. In 2010 — the latest detailed data — they dropped 13 percent from 2007 compared with a 5 percent decline for native-born women. Hispanics, both foreign and U.S.-born, had big birth-rate declines, reflecting (Pew said) exceptionally high unemployment and wealth losses from the recession.

The bleak labor market has hurt all age groups, but none more than the young. Consider the 23.4 million Americans who, on average, were considered “underemployed” over the past year. This group consists of 12.7 million officially unemployed; 8.2 million working part time but wanting full-time jobs; and 2.5 million desiring work but so discouraged they’d stopped looking. Of all these workers, 41 percent (9.5 million) were 30 or under, far in excess of their labor force share of 27 percent, reports Heidi Shierholz of the Economic Policy Institute, a liberal think tank that provided these numbers.

And if you keep reading, you’ll just get more and more depressed.

- Aggie

2 Comments »

  1. Buck O'Fama said,

    December 11, 2012 @ 5:25 pm

    There was a story about the ObamaCare debate – one high-profile businessman was talking to a senator about ObamaCare and said, “Look, you’re gonna tax people for 10 years and pay out benefits in only the last 6. What happens when you get to year 11? What happens when you start having to pay for a full decade of benefits?” And the rely was “I’m 80!”

    That’s basically where we are today. Next generation? Who cares? Long as I get mine. It starts in Washedup, DC.

  2. Bloodthirsty Liberal said,

    December 11, 2012 @ 10:42 pm

    I agree with you, Buck. We are the most selfish people that have ever infested this planet.

    - Aggie

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