by Ryan Streeter on December 7, 2013. Follow Ryan on Twitter.
I had this Cowan and Kessler op-ed from the WSJ the other day open in my browser, and I thought it was worth pulling out these factoids before shutting it down:
[S]ince 2010 Social Security payouts to seniors have exceeded payroll taxes collected from workers. This imbalance widens inexorably until it devours the entire Social Security Trust Fund in 2031…At that point, benefits would have to be slashed by about 23%…
In 2030, a typical couple reaching the eligibility age of 65 will have paid $180,000 in lifetime Medicare taxes but will get back $664,000 in benefits…
In the 1960s, the federal government spent $3 on [public investments like infrastructure, public schools and college financial aid] investments for every $1 on entitlements. Today, the ratio is flipped. In 10 years, we will spend $5 on the three major entitlement programs (Social Security, Medicare and Medicaid) for every $1 on public investments.
We’ve heard all this before, but it never hurts to keep reminding ourselves of what past policy choices mean for the future of today’s younger workers. The interest on the debt required to keep fueling this will also grow sharply in the coming decades. The lack of urgency on these issues is astounding to me.
by Ryan Streeter on December 4, 2013. Follow Ryan on Twitter.
We’ve covered this before, but it’s worth a refresher: in just one generation, America has undergone a tremendous demographic shift. Specifically:
Married households with children were 40.3% of all US households in 1970; in 2012, that share had fallen by more than half to 19.6%. Interestingly, the share of households that were married without children has stayed at about 30%. Other Family Households, usually meaning single-parent families with children, has risen.
Overall, as “household” in America decreasingly refers to a family as traditionally understood, the size of households has shifted as well, most notably when you look at the drop in large families and the rise in people living alone:
He also notes that the trend of young adults moving back in with their parents began before the recession, an important data point given that conventional wisdom holds this trend was caused by the downturn.
These trends portend much bigger challenges for the future than we usually discuss in our public policy debates.
by Ryan Streeter on November 30, 2013. Follow Ryan on Twitter.
In this Business Insider interview, Scott Winship offers some interesting ideas relevant to our mobility challenges today: a married parent tax credit and a human capital voucher. He explains:
It’s worth thinking about a married parent tax credit that would similarly provide a bonus and an incentive for parents to marry and maybe the bonus could be for parents to wait until they were married to have children. Out of wedlock childbearing is one of the more distressing problems that we’re facing.
Another interesting approach would be to promote a voucherized human capital investment program. The idea would be that if you’re disadvantaged you qualify for a voucher that you could use for whatever services you think would most benefit your kid. That will vary by family obviously. Maybe it’s tutoring. Maybe it’s summer school. Maybe it’s an after school program. Maybe it’s violin programs. Essentially, you give folks vouchers. You create a regulated market of organizations that can receive vouchers and people who could receive the vouchers. But then you rigorously evaluate both overall approaches and individual providers and those who are ineffective at some point no longer qualify for the vouchers. What would be potentially interesting about that is you could attack this cultural element of poverty as well where people particularly in neighborhoods of concentrated poverty have kind of ended up with bad norms that inhibit mobility.
It would be voluntary so it would encourage personal responsibility as well. If parents decided not to use these vouchers then they wouldn’t help their kid at all so you’re sort of building in an incentive for them to think about their kid’s future and investing in it.
by Ryan Streeter on November 27, 2013. Follow Ryan on Twitter.
Tech growth is a good indicator of where entrepreneurs and the capital that follows them want to be. If you had to make a list of the top 25 aspirational cities – those that are leading the nation in tech growth – you might be surprised when you compare it to this list, courtesy of Joel Kotkin in Forbes:
Where should we look for future tech growth? Certainly long-term you can’t count out Silicon Valley and its enormous, and uniquely deep reservoir of engineering expertise. Seattle also seems a safe bet, in part due to its lower energy and housing costs, at least compared to San Francisco and the Valley.
But perhaps the biggest trend over time will be dispersion. After the top five on our list come a series of less-celebrated metro areas, including Salt Lake City, Indianapolis, Baltimore, Jacksonville, Kansas City and Denver. These areas are generally less expensive than the trendier cities, and could attract more tech investment once the current bubble conditions die down.
by Ryan Streeter on November 26, 2013. Follow Ryan on Twitter.
45% of children living with a single mother live below the poverty line.
The share of family households — in which at least two occupants are related by blood, marriage or adoption — has fallen sharply in recent decades. This year, roughly two-thirds, or 66%, of households were family households, down from 81% in 1970.
Households in America that are married couples with children has declined by about half, to 19% this year versus 40% in 1970.
by Ryan Streeter on November 25, 2013. Follow Ryan on Twitter.
The latest jobs report shined some light on the skills gap. Caroline Baum writes:
Job openings rose to a five-year high of 3.9 million in September, before the government shutdown. The jobs opening rate (2.8 percent) matched the highest level since May 2008.
Despite an unemployment rate over 7%, lots of employers can’t find people to fill jobs they have open.
Many small manufacturers complain that they can’t find skilled workers. Today’s [Job Openings and Labor Turnover] report supports the second story, which may reflect a skills mismatch or the inability of families to move to where the jobs are.
The post-recession skills gap has sent a much-needed wakeup call to how we approach vocational training and certification. Many jobs with solid upward mobility potential don’t require a 4-year college degree but require much more than a high school degree.
This is especially true in manufacturing-intensive states such as Indiana. Indiana Governor Mike Pence has created Indiana Works Councils across the Hoosier state to ensure industry-relevant skills training is available in every high school. I expect other states will follow this approach.
The new BEA numbers on metropolitan economic growth are out. Overall, growth was lower in 2012 compared to 2011, unless you happen to live in a city dominated by oil and gas:
Midland, Texas was the fastest growing MSA, in terms of personal income, for the third year in a row. Odessa, Texas, which grew 11.5 percent, was second fastest, as it was in 2011. For both MSAs, the mining industry, which includes oil and gas extraction, contributed more than any other industry to personal income growth. North Dakota’s three MSAs were also among the fastest growing MSAs in the country in 2012: Grand Forks grew 10.5 percent and ranked third, Bismarck ranked fourth (10.1 percent), and Fargo ranked sixth (8.3 percent). Personal income in the nonmetropolitan portion of North Dakota—where the booming mining industry is located—grew at an even faster 26.3 percent pace.
Here’s how growth looks on a map:
by Ryan Streeter on November 11, 2013. Follow Ryan on Twitter.
Kids who grow up with with single moms have a tougher go of it – but especially boys.
“[J]ustice experts have long known that juvenile facilities and adult jails overflow with sons from broken families,” writes Kay Hymowitz.
So we need to provide more generous welfare support to single mothers, right? Well, maybe we do, but that question is unrelated to outcomes among boys. Hymowitz writes:
[T]he link between criminality and fatherlessness holds even in countries with lavish social welfare systems. A 2006 Finnish study of 2,700 boys, for instance, concluded that living in a non-intact family at age 8 predicted a variety of criminal offenses.
Even those boys who don’t get in trouble with the law struggle.
Several studies have concluded that boys raised in single-parent homes are less likely to go to college than boys with similar achievement levels raised in married-couple families; girls show no such gap.
So, conventional wisdom goes, a boy raised by a single mom needs a man in his life, right? Unfortunately, research doesn’t show that a mentor, an uncle, or a friend makes that much of a difference. Stepfathers, especially, don’t make up the difference:
Professors Cynthia Harper and Sara McLanahan found that among boys they studied, the ones without fathers were more likely to be incarcerated, but they also found that those who lived with stepfathers were at even higher risk of incarceration than the single-mom cohort.
Unfortunately, Hymowitz concludes, we just don’t have very good answers for this conundrum. She suggests that “clear rules” and “structure” and literacy programs can help make up for what boys lose by not having their dads at home. But ultimately, she says, when boys see that men have become superfluous in their communities, it cannot help but “depress their aspirations.”
by Ryan Streeter on November 11, 2013. Follow Ryan on Twitter.
A new Pew study shows how important saving money is to people’s future upward mobility:
Those who left the bottom of the income ladder had 6 times higher median liquid savings, 8 times higher median wealth, and 21 times higher median home equity than did those who remained stuck at the bottom.
The authors expand on the finding a bit here:
Those who had higher liquid savings were significantly more likely both to have left the bottom and to have reached at least the middle. Someone with $10,000 in liquid savings, for example, is 6.5 times more likely to have moved up and 5.5 times more likely to have made it to at least the middle compared with someone with only $1,000 in liquid savings.
A decent Forbes column on these findings is here.
by Ryan Streeter on November 5, 2013. Follow Ryan on Twitter.
From today’s front-page WSJ story on who’s signing up on the Obamacare exchanges:
Insurers say the early buyers of health coverage on the nation’s troubled new websites are older than expected so far, raising early concerns about the economics of the insurance marketplaces (emphasis added).
The “older than expected line” is also in the article’s headline. I’ve heard this line and its variations uttered quite a bit on mainstream news outlets the past week, too.
It raises the question: expected by whom? For at least 3 years now, many commentators have been warning that young people didn’t have sufficient incentives to sign up on the Obamacare exchanges. I think a good many people across the country actually expected exactly what’s happening now. There’s nothing surprising about it.