Thursday, November 7

Holy Cow! Can this be True?

And if it is, my wife should divorce me right now, and I’d be a fool to stand in her way.  We could both come out way, way ahead.  If I then, quit my job and went on welfare, we’d be making more money than we do now.

source: Captain Capitalism

Crowding Out the Private Sector Husband

I was listening to Stefan Molyneux and he said something that made my economic spidey senses tingle a bit:

That the average unwed mother, supporting a family, received somewhere around $70,000 per year from the government in the various forms of social services, welfare, etc.  He then went on to add if you considered public school that was another roughly $10,000 per child.

The number seemed a little high, and I cannot find the specific podcast, but I trust Stefan's veracity to ensure those numbers are correct, so for the purpose of this particular post, I'm going to assume it's true (if somebody has better data or can cite the study, please let me know).  But the point Stefan was making was how this essentially supplanted men as the role of a provider.  If the government is going to pay a single parent (typically the mother, but not always) $70,000 per year, then why would she bother looking for a husband, at least in the capacity of a provider?

Simple, she won't.

But this got me thinking.  Assuming the $70,000 is accurate, what that essentially does is put a price floor on the marriage market.  No woman is going to consider any man who makes less than $70,000 because that's the MINIMUM she's going to get from the government.  So as a man, if you wish to participate in this market you need to make more than $70,000.

But what percent of men make that much?

Well off to do some research I went and found on wikipedia's entry on personal income that 87% of the population makes less than $75,000 per year (close enough).  Yes this included women as well, which probably increased that percent, but let's just say 80% of men make less than $75,000 for the sake of argument.  That's 4 out of every 5 men who cannot provide at the level the government does.  4 out of 5 men cannot compete in the marriage market.

Now, naturally, women don't just marry for the provider role, and there are a whole host of other variables that go into it, but the government at least at some level is crowding out men from this marriage market.  And we all know from Economics 101 what happens when you set price floors and crowd buyers out of a market -surpluses.

The chart above graphs your standard supply and demand curve market.  The "supply" of women is in pink and denoted "S, women" while the "demand" for women (obviously by men) is in blue and denoted "D, men."  Had there been no government interference, the market would "clear" at an equilibrium price that would be around what the median income is for your average man.  This would be "normal" and normal women would marry normal men.  You would have a normal house and normal children.  And life would have gotten on like it always has, normally.

However, with the government essentially providing a $70,000 price guarantee, it throws the whole marriage market out of whack.  At such a high income level, many more women are willing to get married, and so the supply of women increases and is denoted by the green S.  But with only 20% of the male population making that kind of money or more, the demand drops to the green D.  The difference between the plethora of women who are willing to get married and the few men who can afford it, is a surplus of women who constantly ask "where have all the good men gone?"

Of course, it is impossible to put precise numbers on this market.  But it does go a long way in explaining, at least economically, why there seems to be a shortage of men (or a surplus of women).  Government has crowded men out of the market by making it too expensive to compete in.  It would be no different if the government came in and created a law putting the price of Playstation 4 at $5,000.  Some people would buy it, but most others would simply not be able to afford it.  However, instead of less video games being played, government's vying for the affection of women has resulted in less marriages.  Perhaps they can design a government check that will hug you back at night.


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