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Cut taxes for young professionals
Reihan Salam
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Kai Ryssdal: The July unemployment report comes out Friday morning. But, as it happens, statistics have a way of never missing an opportunity to kick an economy when it's down. The Labor Department gave us this this morning: A report on metro-area unemployment. In a survey of more than 350 cities, the department says the unemployment rate rose in more than 90 percent of them.
Commentator Reihan Salam says that's especially troubling for one specific group.
Reihan Salam: Our jobless recovery has been bad news for all Americans. But it has been particularly harmful for the economic prospects of under-25s, who face an unemployment rate over 17 percent. And unless we do something drastic to help young workers now, we're looking at decades of economic stagnation.
The reason is that the starting point of our careers has a big impact on our lifetime wages. A person who graduates in a boom is more likely to land a paying job rather than slug through an unpaid internship.
But those who graduate in leaner times aren't quite so lucky. Finding that first job is a lot tougher in a recession than it is in a boom. Climbing to the next rung -- the job that pays a little better or offers a bit more responsibility -- takes much longer. Instead, people cling to jobs that don't fully realize their potential. The simple accident of when you happened to have been born can determine your entire economic future.
And this impacts the rest of us in a big way. Jobless young people can't afford strike to out on their own. They delay marriage and child-rearing. They're more likely to live with mom and dad rather than rent an apartment or buy a new home. They're less able to invest in their future. This depresses the economy even further.
To break out of this miserable cycle, we need to consider a permanent tax break for the young. We could, for example, exempt workers under 25 from paying their share of the Social Security payroll tax. Yes, this might strike you as fiscally irresponsible. But giving young workers an early boost can help guarantee that they will earn higher wages later in life. That first paying gig will lead to more, each of which will, as a general rule, pay a higher salary than the last. And that will put our entitlement programs on a much sounder footing. A tax break for the young is a win-win.
Ryssdal: Reihan Salam is a policy adviser at e21 -- that's an economics think-tank. We'd love to hear what you think -- send us a comment.
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"And unless we do something drastic to help young workers now..."
Well, there it is. I would usually quit reading at that point, as I know the rest of the article will be collectivist drivel, but I didn't. And, to my surprise, I found one actual good idea!
Exempt workers under 25 from FICA taxes? Great idea, but let's not stop there. Let's exempt all workers under 55, and also exempt them from the burden of receiving benefit checks when they retire.
People could do a lot better if they could plan there own retirement, without being forced to contribute to a Ponzi scheme that is now broke, and has a $20 billion unfunded liability.
I don't think it is a good idea because social security should be an investment into our children's retirement security (if the government don't spend it all).
The REAL economic problem is systemic all the way from the top. A congressman needs LOTs of money in order to keep his job. As much as we like to think voters chose laws it has been shown in survey after survey that whoever spends the most money in a campaign has a FAR greater chance of winning a election. Political circles know this fact. Because of this "money well" required by both democrats and republicans to win re-election, large domestic and foreign corporations "broker" with parties and individuals for their votes on issues. Lobbyists inform clients of which bills they wish to support (or even have power to write the bills themselves->example Verizon net neutrality law). What makes it not bribery by the "letter" of the law is a congressman can of course refuse and it would be illegal for a lobbyist to demand votes for money. But if the lobbied do not vote in line with what they are "informed" the lobbyist will shift the needed money to another congressman who wants the election security of deep pockets. Make no mistake. Congressmen just like us worry about what will happen to their job.
With money being the absolute biggest known factor of being re-elected (save perhaps a major political mistake) there is often NO hope of getting a majority congress vote that helps the majority if this country if the large lobbyists do not support it. Congress hands are tied to vote for people/companies with deep pockets who want short term profits. The laws being passed no longer favor the majority of businesses or the average person.
It's also not illegal for a company to offer for example a 10million dollar (1 yr) job to a congressman to roll a pen across a desk for getting a profitable vote approved (happens frequently).
I feel most congressmen must only favor high spending lobbyists goal of short term gains and until that can be fixed the systemic government corruption will keep rolling down the hill hurting all of us the economy businesses and the people at large.
My biggest issue with this editorial is that there is absolutely no correlation between getting a better job and reducing tax your liable. Paying less taxes has no bearing on how good or career advancing a job I get might be. This "tax break" solution doesn't solve the problem. If anything, the unintended consequence would be employers would just pay younger workers even less, as take home pay would remain the same despite the tax break.
So the answer is to "give" a special group something no one else has. Typical looney thinking, an attempted band aid on a perceived, not proven, wound. Why is it impossible for people to think about fixing the problem, the cause of an economic downturn, the reason for business sending production overseas to places where they get more bang for their buck, the reason that employers are asking more from existing employees rather than hiring. The government has been slowly and steadily placing road blocks in the path of business in taxes, regulations, and outright hostility for more decades than most can imagine, and now you're seeing the fruits of that. I once heard a 20 something college kid in a group cheering and yelling, "kill capitalism"; well it is being done, and now those same kids are whining about not having a job. Think the fools will ever see the connection between their stupidity and their whine? Naw.......too much to ask for.
What a thought, releasing people from the tyranny of their birthdate. I wonder what the people who turned 18 during the years 1941 through 1945 would have thought of this idea?
There are too many times when peoples lives have been perturbed by events to list them, When I heard this piece I had to check my calendar to make sure it was not April first
I think it is refreshing, as a young person myself, to finally be recognized for the struggles that we are facing. I graduated undergrad just as the economy tanked and couldn't find a job beyond part time gigs (mind you I graduated with Honors top in my class), that is sad. I did everything right from graduating in the top 1% in school, to getting a quality education from a quality school. I graduated only to find myself working anywhere upwards of 5 part time jobs at once, and close to 80 hours a week. That isn't right, but there was nothing else available to me.
The older generations moan and complain about all the hardships that they are going through, when they were given all the opportunities to succeed, and squandered them. Now they are the ones being bailed out of their own messes. Where does that leave our younger and obviously forgotten generation? Working crummy part time jobs, with piles of student loans and no way to pay them. What a great way to start out life. I feel like Salam was SPOT on finally giving the younger generation air time and making an attempt to help us. Everyone is concerned with cutting social security and medicare, for the current generation, but my generation has given up all hope that those benefits will even be around for us at all. All I can hope is when we do get our chance to shine, we do a better job than what has been done.
Do I think a tax break is the right idea? Perhaps not, but it's nearly one of the only remarks I have heard in regard to my generation. I believe in paying my fair share of taxes, however I do appreciate the notion of helping out THE FUTURE rather than dwelling on a dying past.
Thank you Mr. Salam for recognizing the forgotten generation.
Tax cuts for the unemployed! Brilliant!
"But giving young workers an early boost can help guarantee that they will earn higher wages later in life."
This came from the same study that suggested eating avocados would lead to winning Olympic gold in badminton.
"And that will put our entitlement programs on a much sounder footing."
Right, because once young people receive a tax break I'm sure they'll be happy to give it up once they're no longer eligible.
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