Is that ubiquitous smell in America’s great cities the smell of sensible liberal drug policy? Or is it the smell of America’s work ethic going up in smoke? If the work ethic is the product of cultural change, it can be destroyed by cultural change. America is the world’s leading example of the power of the work ethic. “The US work ethic is really strong and healthy,” Nicholas Eberstadt of the American Enterprise Institute quipped to me in an interview, “except where it isn’t.” The post-work revolution was led by men without college degrees. Eberstadt produces some astonishing statistics on the number of prime-age men (25 to 64) who have fallen out of the labor market. More than 11% of these men — some seven million souls — are neither working nor looking for a job. Barely half of native-born prime-age men with no high school degree are in the job market. The “not in labor force” number has gone up by a percentage point every seven years since 1965 regardless of the state of the economy or the number of job vacancies.
- Date Posted:
- January 31, 2023
Bringing in the changes in both components, debt, and equity, into the assessment, we computed the costs of capital for US and global companies in US dollar terms. The cost of capital for a median US (global) company rose from 5.77% (6.33%) at the start of 2022 to 9.63% (10.60%) at the start of 2023. To understand the implications of a rising cost of capital, it is worth remembering that the cost of capital is the Swiss Army knife of corporate finance, affecting almost every decision within a business.