By Kevin Mooney — Contrary to some of the key findings included within a new U.S. Government Accountability Office (GAO) report, unemployment is actually much worse among younger workers than older workers, according to recent congressional testimony. The GAO report recommends that lawmakers intervene on behalf of older Americans who have been out of work.
Congress should offer temporary wages and training subsidies to employers who hire older workers and negate the requirement that Medicare be the secondary payer for workers covered by employer-provided health insurance. But the GAO report’s own figures show since 2000 the labor force participation rates of workers age 55 and older have actually been rising, while the labor participation rates for workers who range in age from 16 to 24 have dropped, Diana Furchtgott-Roth, a senior fellow with the Manhattan Institute, told the Senate Special Committee on Aging in testimony. Moreover, young people just entering the workforce tend to be saddled with high debt, she noted.
“In addition to higher unemployment rates, large increases in college tuition in recent decades mean that young people are graduating with substantial debt,” Furchtgott-Roth said. “That is one reason why rates of recent graduates living at home with either a parent or a grandparent have increased. In 2005, the share of 20-24 year olds who had at least a bachelor’s degree, but were living at home was 36 percent, and it reached 43 percent in 2011.”
Furchtgott-Roth also cites a November 2011 Pew Research Center study entitled “The Rising Age Gap in Economic Well-Being,” which found that the gap between old and young is larger than it has ever been. The older age group had 47 times the net wealth of the younger group, the Pew study found. While older people would be expected to have more wealth since they have had more time to save and build assets, the increased separation between the two groups is cause for concern, Furchtgott-Roth suggested.
The employment prospects for all age groups remains uncertain in large because of public policy, she continued.
“Tougher regulations lead employers to locate elsewhere,” Furchtgott-Roth observed. “Friendlier regulations draw them back home. One proposed bill that would interfere with job creation is S. 1471, the Fair Employment Opportunity Act of 2011. The bill would set up another protected class of workers, the unemployed. The unemployed would be allowed to sue employers for discrimination, just as women can sue for sex discrimination, older people can sure for age discrimination, and different minorities can sue for racial discrimination.”
The legislation, which is sponsored by Democratic Sen. Richard Blumenthal of Connecticut, would only serve to further depress the job market because employers would know they could be on the receiving of expensive court imposed penalties, Furchtgott-Roth added.
As an alternative to Blumenthal’s bill, she recommends that members of Congress “add more certainty to the tax system.” The rates on income and capital are scheduled to rise in January. In her testimony, Furchtgott-Roth also calls for the elimination of new regulations the Environmental Protection Agency (EPA) has imposed on coal and for policymakers to approve the Keystone XL Pipeline.
The regulatory environment works to the disadvantage of all age groups. But GAO is clearly ignoring its own stats and figures that indicate it is youngest age groups that are most vulnerable to economically unsound policies that flow out of Washington D.C.
Kevin Mooney is a contributing editor to Americans for Limited Government. You can follow Kevin on Twitter at @KevinMooneyDC.
