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The Guild-ed Age
The Blue Model’s War on the Young

Regular readers know that many of the burdens of what we call the blue social model fall most heavily on young people. Untenable state pension obligations reward retirees while driving up taxes and hollowing out services for younger workers; urban land use regulations are making it increasingly difficult for millennials to get a foothold in the real estate market; our heavily subsidized and regulated higher education system is failing to deliver skills to many students at a reasonable cost; and the $15 minimum movement poses an existential threat to teen employment.

So it’s not surprising to see data showing that another pillar of blue model labor economics—onerous occupational licensing rules—also hit youth hardest. FiveThirtyEight’s Ben Casselman reports:

Licensing rules are a particular problem for young workers trying to break into the job market, especially those without a college degree. The unemployment rate for adults ages 18 to 35 with neither a license nor a college degree was 9.9 percent in 2015; for those with a license (but still no degree), it was 5.2 percent. Those who do manage to find full-time jobs earn 13 percent less than those with a license… Licensing rules don’t explain all or even most of that gap — there are likely other differences between people who have licenses and those who don’t — but they probably do play a role. The earnings gap shrinks, but doesn’t disappear, after controlling for education, occupation and other factors.

The ultimate function of blue model-style regulation is to manage the economy by protecting organized interests—whether they are public sector unions, politically connected real estate owners, the higher education cartel, or, in the case of occupational licensing, professional guilds—from competition and disruption. Because young people are less well-off, less established in their careers, and less likely to have an inside track to city councils and state legislatures, rules designed to limit competition and protect insiders naturally put them at a disadvantage.

Neither party really speaks to this issue. Republicans, who rely overwhelmingly on older, whiter voters, tend to be less concerned about protecting markets when markets don’t serve the interests of that constituency. Meanwhile, Democrats tend to promise young people a massive expansion of blue model cronyism that would make the problem worse. There is a huge untapped demand for politicians who take the economic obstacles facing young people seriously, and who offer real solutions.

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  • rheddles

    Republicans, who rely overwhelmingly on older, whiter voters

    What an ageist, racist statement.

    • Beauceron

      What a ridiculous statement.

      It’s the simple unvarnished recitation of a simple statistical fact.

  • Aldus du Flaperon

    Interesting; isn’t this known as corporatism? In Europe, it is widespread, with Greece the prime example.

  • Blackbeard

    The Democrats have been very successful at the presidential level for some 20 years now and look likely to continue this trend in 2016. The Democrats would like to believe that this validates their narrative but I suspect it is more due to an utter lack of effective opposition from the Republicans. For example, as this article notes, actual liberal policies tend to disadvantage large segments of the population and yet the Republicans seem incapable of proposing attractive alternatives.

    Perhaps after Trump get finished destroying today’s Republican Party something more effective can be built.

    • Beauceron

      This is my hope.

      The GOP is its own worst enemy, have failed miserably to represent the majority of its voters interests, has been wholly ineffective, and stand for little more these days than corporate interests.

      My hope is that a better, more responsive party rises from the ashes of the GOP. Of course, there’s every chance nothing will be come of this and the Dems will just grind us all into dust.

      • FriendlyGoat

        Au contraire. Republicans stand for everything that Chuck Norris, Sarah Palin and the entire Duck Dynasty clan say that they do—–undoubtedly a long list. The problem from a millennial’s point of view is how would any of it add up to making family economics work for millions of pairs of young lovers with high school educations, big dreams and good attitudes?

  • Anthony

    Quote of day: “Untenable state pension obligations reward retirees while driving up taxes and hollowing out services for younger workers.” An aside: FiveThirty Eight excellent site with High Quality Young Talent.

  • Beauceron

    Feel the Bern!

    It’s more important to the young to virtue signal than to do what is best for them.

    • Boritz

      Quite right.

      “rules designed to limit competition and protect insiders naturally put them at a disadvantage.”

      Nothing is putting them more at a disadvantage than their own worldview. One is reminded of Kevin Bacon repeating, Thank you sir! May I have another!

  • FriendlyGoat

    What are the “real solutions” mentioned in the last sentence? Can you put anything on the table besides a vague (vague) criticism of pensions, taxes and regulations? After all, if you go ask the millennials whether they want the public and private sector pensions of THEIR parents and grandparents (including Social Security) cut, you know what the answer is going to be. And yes, the young people all have upline extended-family relatives on at least Social Security and Medicare and those young people whose elders don’t have pensions wish that they did. Pensions and Medicare have more to do with the direct possibility of real “trickle-down” in real families than do the oft-recommended tax cuts for already-rich CEO’s, entertainers, trial lawyers and financial traders or the deregulation wish list of the National Chamber of Commerce.

    On the licensing, here is the list of 130 licensed occupations in New York as referenced in the FiveThirtyEight link:

    I’d invite TAI and all readers to go over this list. When looking at the real job titles, it’s not hard to understand why licensing exists for a good majority of them. Yes, we could stop worrying about massage therapists and jockey agents and a few others on that list. But we need to be more honest with young people than telling them that these licenses are their MAIN problem. Just go look at the list.

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