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Home Publications Blogs Beat the Press If We Stopped Coddling Doctors Would the Kids Still Be at Home?

If We Stopped Coddling Doctors Would the Kids Still Be at Home?

Sunday, 22 June 2014 07:56

Adam Davidson has an interesting piece in the NYT Magazine noting the rapid growth in the percentage of young adults who continue to live in their parents’ home well into their 20s. The main explanation for this shift is the deteriorating labor market prospects for young people. While the piece does note this fact and has some discussion of the causes, it would be worth going into the latter in a bit more detail.

The country has pursued a set of policies over the last three decades that have the effect of redistributing income upwards. The most important of these at the moment is the high unemployment policy being pursued by Congress. Congress decided that it wanted to rapidly reduce the budget deficit after the 2009 stimulus. This has slowed growth and prevented millions of workers from getting jobs. It has also meant that many workers with jobs are working fewer hours than they would like.

Perhaps most importantly, high unemployment substantially weakens the bargaining power of workers in the bottom half of the wage distribution (these are disproportionately younger workers), so that they end up with lower wages. (See my book with Jared Bernstein, Getting Back to Full Employment.) In short, the decision by Congress to run lower budget deficits has forced millions of young people to move back with their parents.

There are many other policy decisions that have also hurt the wages and job prospects of young people. The decision of the Clinton Administration to have a highly valued dollar back in the late 1990s led to a large trade deficit which is another major cause of high unemployment. The protection of doctors and other highly paid professionals from international competition raises the costs of health care and other services, thereby reducing the real wages of most workers.

And of course the massive government support of the financial sector, in the form of too big to fail services, bailouts, and tax subsidies (other industries are taxed more so that the financial industry can be taxed less), has come at the expense of the rest of the economy which might otherwise be better situated to employ young workers.

Anyhow, the tales in this piece are striking, as many young people continue to need substantial support from their parents at ages where they would have been on their own in prior decades. It is important to recognize the policies that led to this outcome.

Comments (7)Add Comment
Obama Also Deficit Obsessed
written by david s, June 22, 2014 8:26
Why call out only the Congress for the post-stimulus deficit mania?

The President also jumped onto the deficit reduction bandwagon.
"All across America, families are tightening their belts and making hard choices. Now, Washington must show that same sense of responsibility." President Obama 2009

Many Democrats love the Clinton years, and see the (unfortunate) budget cutting as the cause of the prosperity of those years. They believe that the budget surpluses of those years were why the economy was growing. I think many of those unfortunate ideas found their way into the Obama Administration.

Home Sweet Home: Ode to a Hammock Safety Net
written by Last Mover, June 22, 2014 9:56

If there was a hammock safety net
For whom oh whom should it be?

For the 47%, the 99% or the 1% in need?

For makers of stuff who huff and puff
That need is not greed
When freed to proceed
Behind walls of protectionist rackets?

Who create jobs for mobs and mobs
Of young people who just want to hack it?

Through thick and thin, from bottom to top
The young need only to match it?

The progress that is, by mom and dad
who got a job and home with smart tactics?

Go forth ye young and seek before you
The home you deserve to have

Forego the home of mom and dad
A hammock trap that will halve

Your future earnings with socialist yearnings
As takers from makers of value to add

As takers from moms and takers from dads
Your generation has really been had

That you met the enemy and it is them
Intergenerational moms and dads

Who took your job and took your house
Then took you into their pad
none, Low-rated comment [Show]
written by Last Mover, June 22, 2014 4:45

Rakesh what is it with you and the doctors? Just about anyone in America who could go to college would go to medical school to make the kind of money they do, especially these days.

If they would stop turning down so many applicants to jack up the enormous shortage they created, including hospital residency slots, artifically inflated class and training time would fall too as more graduate to earn lower salaries and treat more patients dying in waiting lines like veterans did.

As educated and trained you imply doctors are, they just don't seem to get it do they, as they arrogantly demand a guaranteed right to income high enough to pay for their education.

Why doesn't this apply to anyone who goes to college or specialized training? An overpaid occupation where a job is guaranteed by a controlled shortage when they graduate to pay for the overpriced education.

Why not stop your whining and demand all college and other graduates have the same job security and comparable pay as doctors? At least it would be a level playing field.
That good ol' passive voice
written by Victor, June 22, 2014 5:16
The photos in that article were compelling, humanizing a major phenomenon. Unfortunately we still hear all too often that the solution for anyone who wants a secure future life is to go to college, it never made sense to me that everyone should go to college, instead of demanding better paid and more fulfilling work with or without a degree. But It was a typical Adam Davidson piece, trying to shift the discussion from the benefits that's the wealthy and powerful have engineered for themselves over the last decades. He thinks the top 20% are the ones who have really benefited not the 1% or .1%. And of course, he won't blame anyone for these results. Instead he writes about changes in economic policy in the passive voice,blaming "computer technology and global trade" for reduced earnings that accompanied the great reversal of the last decades. He further removes any attribution of responsibility for these changes by means of the good ol' passive voice, "taxes were cut, welfare programs were eliminated". As readers of Dean's commentaries should know by now, these changes came as a result of specific choices by politicians and bureaucrats in response to the ideology of some economists and at the behest of the .1%, Hardly passive at all.
Rakesh...Dean thinks doctors and patents are our only health care problem
written by pete, June 22, 2014 8:17
Nurses and techs get a free ride because they are.............wait for it......unionized. The AMA is not a union, per se. So the AMA doesn't pay Dean's salary like the SEIU. So if nurses and medical techs earn more than their European counterparts, cool! Docs? Bad! In fact all are overpaid, mucho, on a global basis. We need more Philipino and Nigerian nurses, not fewer, and more Canadian and British docs, too! More H1 visas, in other words, especially for health care workers. Equalize it, don't criticize it.
written by LSTB, June 23, 2014 9:06
The Times Magazine piece says one in five young adults are living with their parents, but according to the Census Bureau[http://www.census.gov/hhes/fam...dults.html], 31 percent of people aged 18 to 34 are children of the householder. For the 25-34 bracket, the percentage has crept up to 14 percent, mainly driven by women.

There are a lot of problems with the article, but not citing sources (at least in the version I read) is one of them.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.