Bad Economic Situation for Young College Grads Made Worse by Obamacare

The economic situation in America seems to be hitting young people with bachelor’s degrees especially hard. 44% of 2011 and 2012 college grads are still living at home, and the unemployment rate for newly grads with a bachelor’s degree is 8%, compared to 5% in 2006. Overall young adult unemployment is at 13.1% according to RealClearMarkets. In fact most new jobs created in the last year (1.2 million out of 1.6 million) have gone to people 55 and above, while “Americans 55 and older had the highest labor force participation rate since 1961”, suggesting that some people have had to come out of retirement, or delay retirement to make ends meet. This should also explain why younger people are finding it harder to get jobs, because more experienced older people are applying for jobs that would at one time go to recent college grads. The labor force participation rate for young people is the lowest since 1972. “The biggest decline in labor force participation rates can be observed for workers aged 16 to 24.”

As if a 13 percent unemployment rate and average students loans of $25,000 weren’t enough, the Affordable Care Act wants young adults to sign up for insurance. Based on a survey of 17 major insurance companies, a new study by the Republican House Energy and Commerce Committee, released last week, reported that the Affordable Care Act would lead to a 180 percent premium increase for young, healthy males.

Under Obamacare older people’s premiums cannot be more than 3 times the cost of younger people’s premiums in order for young healthy people to subsidize older people’s care, which is why the premiums for younger people will rise. The obvious problem becomes that many young adults are still unemployed and underemployed. Essentially the people who are having the hardest time making ends meet for themselves, are now responsible for paying for the care of older people. Furthermore, health insurance is now guaranteed to be issued, which means a person can wait until they are sick to sign up. It therefore makes the most sense for healthy young adults to not get health insurance, pay the fine, and if they get sick sign up at that point. Again, this makes premiums rise because only sick people will be covered by insurance. Insurance however, is meant to cover unexpected costs, not be a prepayment plan for medical expenses. “It is as though people could sign up for auto insurance after a car crash: no one would bother to sign up before.”

Under the Affordable Care Act, there’s no employer penalty if the employee works fewer than 30 hours. Not coincidentally, in April those working part-time because they could not find full-time work rose by 278,000.
Youth unemployment is a serious matter, and not just for the young.

A society that cannot offer young people work will see the brightest flee to countries that have more opportunities. Others, less entrepreneurial, will stay and collect welfare benefits. Society will see more crime, as young people congregate on the streets. Hard-won college degrees will atrophy. The vaunted American work ethic admired by Alexis de Tocqueville will slowly disappear.

This is all the more reason for young people to stop taking what mainstream politicians have to offer. With all that is going on in today’s world it is time to take a vastly different approach than giving government unlimited power to “solve” our problems. The more the government has intervened and the more “solutions” that get put into law (bailouts, Obamacare, regulations), the worse the situation gets for everyone, and today’s youth are taking the brunt of the situation. Young people need to wake up and stop drinking the Kool-Aide (hope, change, forward), stop listening to lofty promises and accepting special privileges and handouts (free condoms), because this is where it leads. We need a youth voting revolution that puts real problem solvers in power, not the type that will promise goodies and an easy ride, the type that will clear the path for prosperity and allow individuals to do what individuals do best, work together to make the best possible life for themselves and those around them.

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