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Category: economy

I don’t wanna work, I just wanna play Gears of War all day

[ 139 ] July 17, 2017 |

The crew of the Red Dwarf play Better than Life

Once upon a time the entertainment favored by the kidsthesedays was fraught with mundane risks: Drug use. Satan worship. Suicide.

Incredibly bad books and movies created to exploit the moral panic du jour.

Now, according to an article in Fortune, researchers have discovered that men aged 21-30 are choosing to live with their parents and play video games, rather than work a low wage job. Or two. Shocking, no?

A research team including faculty from Princeton and the University of Chicago now argues that “innovations in gaming/recreational computing”— and not, say, lower demand for less-skilled workers—explain as much as 79% of the difference in working rates between younger and older men.

From the outside, the lives of the young men in question may seem grim. The researchers found that 67% of non-working young men now live with a parent or close relative, compared to 46% of the same group in 2000, suggesting that many are relying on family to support them long-term. They average 520 hours a year on their computers, and 60% of that is spent on gaming.

But the paper further cites survey data showing that these men reported increased happiness overall despite their reduced circumstances, suggesting that advances in gaming are making imaginary worlds more enjoyable than the real one.

Or perhaps to the man aged 21-30, the real world is starting to stink so much that online ones are preferable? Table 5 on p. 19 of the study indicates that other people, such as women of the same age, are not succumbing to the alleged allure of eTopia. I haven’t had a chance to see if the researchers explored why – beyond a greater increase in leisure time compared to other groups – men in that age group have increased the amount of time they spend gaming.

That sense of satisfaction with giving up on work might be the paper’s scariest finding for those concerned about the health of the U.S. economy.

And that says not good things about capitalism. But those concerned will have to stay concerned. This country is not moving in the direction of entry-level jobs that are more attractive, or available. Perhaps they should go ahead and advance to anxious.

But the new research points to the possibility that it also reflects permanent lifestyle changes for some. Lower labor force participation is a serious headwind for the economy, meaning video games could ultimately cause a permanent downshift in U.S. growth—particularly since the advent of virtual reality is making permanent escape even more alluring.

And here I was thinking that the chain of corporate greed which results in outsourcing and stagnant wages, which in turn restricts people’s buying power, might be the problem.

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Debt

[ 7 ] August 13, 2011 |

Sarah Jaffe has an excellent if depressing piece about the recent spike in consumer debt:

So why the jump in buying on credit, if people still don’t have money to spend? Carlos X. Alexandre at Seeking Alpha explained:

“…the most logical interpretation is that as other sources of cash are drying up – jobs, equity lines, etc. — consumers are now turning to credit cards for basic expenses, and as credit lines become exhausted another round of defaults is in store. Some may say that cash sales are not reflected in the data, but the American way of life and the core economic engine has been plastic-based for as long as we can remember, and is not about to change anytime soon.”

In other words, a jump in consumer credit isn’t a sign of confidence, but of desperation.

“When you look at unemployment being above 9 percent, housing prices not really coming back to a good space, that will impact the mood and the consumer confidence,” MasterCard Chief Financial Officer Martina Hund-Mejean told Bloomberg. “It’s impacting it today and it will impact tomorrow.”

Hund-Mejean’s company, meanwhile, is profiting handsomely, whatever the reasons for the uptick in consumer borrowing. Bloomberg notes that MasterCard, “[t]he world’s second-biggest payments network reported that its second-quarter profit rose 33 percent. Its U.S. debit- card spending surged 19 percent in the second quarter to $98 billion from a year earlier, and U.S. credit-card climbed 6.1 percent to $129 billion.”

Ugh.

But hey, no doubt our policy makers will help us out of the mess. Take for instance, the legislature of my new state of Rhode Island:

When the small, beleaguered city of Central Falls, R.I., filed for bankruptcy this month, it sought to cut the pension checks it has been sending its retired police officers, firefighters and other workers by as much as half. All the city promises now is that its retirees, many of whom do not get Social Security, will not have their benefits cut to less than $10,000 a year.

But investors who bought the city’s bonds could do much better: Rhode Island recently passed a law intended to make sure that they would be paid in full, even in bankruptcy.

Retirees are wondering how the city can cut what they believed was a guaranteed benefit. “We put our time in, we put our money in,” said Walter Trembley, 74, a retired Central Falls police officer. “And the city, through their callousness and everything else, just blew it. They were supposed to put money in and they didn’t.”

Cities and local governments make lots of promises: to their citizens, workers, vendors and investors. But when the money starts to run out, as it has in Central Falls, some promises prove more binding than others. Bond lawyers have known for decades that it is possible, at least in theory, to put bondholders ahead of pensioners, but no one wanted to try it and risk a backlash on Election Day. Now the poor, taxed-out city of Central Falls is mounting a test case, which other struggling governments may follow if it succeeds.

I see the future and it is the return of debtor’s prisons.