Today's Economic History: Alexander Hamilton: "A National Debt Can Be a National Blessing"

Must-Read: Martin Wolf: America’s Labour Market Is Not Working: "In 2014... close to one in eight...

...of US men between the ages of 25 and 54 were neither in work nor looking for it... far higher than in other members of the group of seven leading high-income countries: in the UK, it was 8 per cent; in Germany and France 7 per cent; and in Japan a mere 4 per cent.... The proportion of US prime-age women neither in work nor looking for it was 26 per cent, much the same as in Japan and less only than Italy’s.... Participation rates for those over 16. These fell from 65.7% at the start of 2009 to 62.8% in July 2015... 1.6 percentage points of this decline was due to ageing and 0.3 percentage points due to (diminishing) cyclical effects.... Yet... the UK experienced no decline in labour-force participation after the Great Recession, despite similar ageing trends.... Back in 1991, the proportion of US prime-age men who were neither in work nor looking for it was just 7 per cent. Thus the proportion of vanished would-be workers has risen by 5 percentage points since then.... What has been happening to participation of prime-aged women is no less striking....

The comforts of idleness cannot be a plausible explanation since the US has the least generous welfare state among high-income countries. High minimum wages cannot be blocking job creation.... In the case of prime-aged women, the absence of affordable childcare would seem a plausible explanation.... The numbers with criminal records created by mass incarceration might also help explain the difficulty in finding jobs.... The relentless decline in the proportion of prime-aged US adults in the labour market indicates a significant dysfunction. It deserves attention and analysis. But it also merits action.

http://www.ft.com/intl/cms/s/0/4dcb5c58-818d-11e5-8095-ed1a37d1e096.html#axzz3qSsrnALR

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