Thursday, April 13, 2006

Labor Participation and Taxes
The Recent Decline in Labor Force Participation
and its Implications for Potential Labor Supply
Stephanie Aaronson, Bruce Fallick, Andrew Figura,
Jonathan Pingle, and William Wascher
Division of Research and Statistics
Board of Governors of the Federal Reserve System
March 2006
Opinions on Taxes
Among U.S. Adults
Report written by
Jean Kalata, Research Analyst
National Member Research
Survey conducted by
International Communications Research
Americans still think Everyone should pay their fair share of Taxes, even the higher Income Households; though Those from the later Households know a lot more Individuals who cheat on their Taxes. Could it be poorer Incomes know fewer Individuals who have the ability to cheat, or is it that higher Income individuals possess more options to chose from with which to cheat? The Survey, anyway, was rather structurally limited in real determination because of loose Questions asking for Opinions rather than fact.

The second Report flows naturally from the Survey, as the perceived unfairness of the Tax Code remains one of the factors for lack of Labor participation. This Author thinks the major real reason comes from low initial Wages coupled with no potential for advancement. Small Startup salaries for Deadend Jobs does not incite enthusiastic performance. The delay in getting Youth into the Labor force (cited by the Report) in conjunction with bureaucratic snares canceling welfare and Disability programs when Labor attempts to reenter the Labor Force present extreme obstacles to Labor participation. All Factors interacting together destroy Incentive for Labor particaption. Why work when the combination of welfare programs and suppressed Wages plus Taxes leaves the Worker in the same economic strata?

The Scenario will become worse as the Baby Boomers age into the Elderly, especially if the rates of Immigration fall as this Author expects within the decade. The fall in Immigration will be due to greater safety and security along with greater individual economic opprotunity in Immigrants' native lands, where family size is also beginning to decline. The only real Solution will be for American business to again start to raise real Wages. lgl

1 comment:

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