Today's youth doesn't have what it takes to replace the economic void left by retiring Baby Boomers, says former Fed Chairman Alan Greenspan. They're just not productive enough.
"In the United States, we are in the process of seeing the baby boomers — the most productive, highly skilled, educated part of our labor force — retire," Greenspan tells The Globalist.
"They are being replaced by groups of young workers who have regrettably scored rather poorly in international educational match-ups over the last two decades."
The U.S. could address the problem by making it easier for educated foreigners study and live in the United States.
(Getty Images photo)
"My view is that we should give a green card to every immigrant who gets an advanced degree in the United States. The proportion of those people who will be terrorists is miniscule," Greenspan says.
"Most high-income people in our country do not realize that their incomes are being subsidized by their protection from competition from highly skilled people who are prevented from immigrating to the United States."
Increasing the number of jobs is good, but increasing the number of more productive jobs is better.
"As Milton Friedman used to put it, if half the workforce digs a hole and the other half fills it in, you can achieve full employment, but no economic output. He was obviously saying that facetiously, but I think it makes an important point."
Trade and Jobs
Trade policies, meanwhile, should not be tools to create jobs alone, which the U.S. has done for decades.
Trade policies should strive to increase output and productivity, and not just dents in rising unemployment rates.
"It has never been clear to me why jobs are the object of trade," Greenspan says.
"One has to recognize that increased jobs are the consequence of increased trade. Increasing jobs more than output implies a fall in productivity and standards of living. That surely cannot be our goal."
To cite an example of how not to use trade to create jobs, Greenspan looks to China, which manages an artificially weak currency to give its exports an edge.
That may create jobs in China, but not the kind of jobs the country really needs.
"They are distorting their economic structure and creating long-term economic damage. I don’t know why we should be attracted to that general principle."
We're Still Here
Greenspan can relax a little, if one poll is correct.
Baby Boomers may be getting older, but they don't feel like it.
A new poll finds three-quarters of all baby boomers still consider themselves middle-aged or younger.
Younger adults call 60 the start of old age, but baby boomers are pushing that number back, according to the Associated Press-LifeGoesStrong.com poll.
Old age now beings at 70, the poll finds, and a quarter of boomers insist you're not old until you're 80.
"In my 20s, I would have thought the 60s were bad, but they're not so bad at all," says 64-year-old Lynn Brown, a retired legal assistant and grandmother of 11 living in Apache Junction, Ariz., the Associated Press reports.
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