The United States — a nation of takers?

In a post about the inability of the German national soccer team to win tournaments recently, I wondered whether this failure had something to do with a change in the German ethos. But what about the American ethos? Has it changed?

Recently, Nicholas Eberstadt, a distinguished scholar at the American Enterprise Institute, gave a talk in which he suggested that the work ethic in American may be declining as we become, in his words, “a nation of takers.”

Eberstadt’s talk centered around a series of statistics that indicate (1) we are, indeed, becoming a nation of takers and (2) our national work ethic does seem to be on the decline.

As to the first point, Eberstadt noted that the percentage of U.S. households receiving means tested public benefits has risen from 7 percent in 1979 to slightly more than 30 percent in 2009. This jump is not the result of an increase in unemployment or in the poverty rate. From 1979 until 1992 (an era of Republican presidencies), the percentage of households receiving means tested public benefits more or less equaled the unemployment rate, except during the recessionary years of 1982-83 when the unemployment rate was slightly the higher of the two. But by 2003, the percentage of households receiving means tested benefits was four times greater than the unemployment rate (roughly 24 percent vs. 6 percent). And the ratio remains almost the same even with the unemployment rate at 8 percent.

As for the poverty rate, it fluctuated between 9 percent and 12.5 percent during this period, according to Eberstadt’s statistics. It too tended to mirror the percentage of households receiving means tested benefits until around 1992. Since then there has been a growing disconnect.

What happened to America’s work ethic during this period? Work ethic is difficult to measure, of course, but Eberstadt presented some very suggestive (and in my view alarming) numbers.

First, the labor force participation rate for U.S. males age 36-39 has decreased from more than 96 percent in 1979 to less than 93 percent in 2009. The decrease is not a function of the latest recession. The male labor force participation rate for this age group dipped below 93 percent in approximately 2001 and hasn’t exceeded that number since. By contrast, the labor force participation rate for males age 35-39 in Greece held steady at around 97 percent throughout the same decade.

Similarly, the labor force participation rate for males as a whole declined from 80 percent in 1979 to around 73 percent in 2009. Looking further back, we find that the rate was 88 percent in 1948.

Some of this decline is, I assume, the result of women entering the workforce en masse. But now consider this statistic: the number of people receiving federal disability benefits per person age 18-64 in America grew from 0.05 in 1960, to 0.17 in 1970, to 4.6 in 2006. This huge increase occurred, moreover, in the context of an ever-healthier American workforce. During the same period, 1960-2006, the odds of dying during working ages declined by 40 percent (from 0.25 to 0.15).

Thus, even as the work force grew healthier, it became more “disabled” from working. Not only are we a nation of takers, we may increasingly be a nation of malingerers.

Eberstadt was careful to present his data as suggestive, rather than conclusive. But he expressed the concern, which I share, that the explosion in government transfer payments may be changing the concept of U.S. citizenship and transforming us into an entitlement state.

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