Has the United States Given Up on Good Jobs?

Related Post Roulette

261 Responses

  1. Avatar ACIS says:

    There’s plenty of room for good jobs but we have to fix the income inequality problems. It’s hard to have good jobs that sustain the majority of the population things are so fundamentally skewed.

    They asked about 55,000 people from 40 countries to estimate how much corporate CEOs and unskilled workers earned. Then they asked people how much CEOs and workers should earn. The median American estimated that the CEO-to-worker pay-ratio was 30-to-1, and that ideally, it’d be 7-to-1. The reality? 354-to-1. Fifty years ago, it was 20-to-1. Again, the patterns were the same for all subgroups, regardless of age, education, political affiliation, or opinion on inequality and pay. “In sum,” the researchers concluded, “respondents underestimate actual pay gaps, and their ideal pay gaps are even further from reality than those underestimates.”

    http://www.scientificamerican.com/article/economic-inequality-it-s-far-worse-than-you-think/Report

  2. both Rand Paul and Hillary Clinton are saying that the future of jobs in America is going to be a crummy service jobs with low-wages and low-benefits. The only difference between the two is that Paul is going to encourage people to work by gutting the social safety net and Hillary Clinton is going to make crummy service jobs more bearable via a variety of programs like child-care subsidies and paid parental leave. Childless and/or Single people stuck in low-wage service jobs get screwed over because no one is daring to mention mandatory vacations or universal sick leave yet.

    There’s a potential misperception and also some irony in that portion I just quoted. The (potential) misperception: I do understand that some people, and maybe Paul is one of them, want to gut the social safety net to “encourage people to work.” But another reason given for gutting the social safety net, at least that part of it that affects unemployment insurance, SSI, and employer provided health care is that reducing those obligations makes it less expensive to hire more people and less expensive to keep on those one already employes.

    The irony: that quoted portion criticizes HRC for wanting “to make crummy service jobs more bearable via a variety of programs like child-care subsidies and paid parental leave” and yet follows that criticism with that statement that “[c]hildless and/or [s]ingle people stuck in low-wage service jobs get screwed over because no one is daring to mention mandatory vacations or universal sick leave yet.” (And later on, the OP again seems to call for, or bemoan the fact that few are calling for, mandatory vacations, etc.) But programs like mandatory vacations and universal sick leave are the very things that if they work as intended, make crummy services jobs more bearable. They also, once they reach a certain point, probably increase the cost of hiring someone so much that there will be fewer jobs or more people working off the books at crummy jobs.

    The question that remains is why do so many elites in both parties and academic elites like Tyler Cowen feel like we are entering an age where bad jobs are the norm instead of the exception and why this is just something to accept.

    I don’t know if that’s something to accept or not, but if those academic elites truly believe we’re entering such an age, they’re wrong. We–by which I mean, most people on this earth–have been living in that age for a long, long time. For some of us–by which I mean those who live in industrialized countries–we have experienced greater wealth on average and jobs that are if not “better,” then at least less awful.

    large parts of the Democratic and Republican parties think that globalization is a force for good and that arguing for protectionism makes you a re horrible xenophobe.

    I’m not sure who makes the “xenophobe” argument

    For the record, I oppose most efforts to lower social supports and the safety net and in most cases would prefer there’d be more than there are now. I think I oppose mandatory vacations. I haven’t made up my mind yet on mandatory paid sick leave or childcare subsidies. I am probably lean toward free trade and against protectionism.

    Finally, when I say such things as I’ve said in this comment, I sometimes receive responses suggesting that I think the Triangle Shirtwaist Fire was a good thing or that I support fast-food managers verbally abusing their employees when the latter are injured on the job or that I think it’s desirable for people to have to work “clopens” or contingent scheduling. So again for the record, let me say that I think those are bad things even though I also believe that some (not all, but some) of the efforts to combat those bad things can be counterproductive.Report

    • Avatar Saul Degraw in reply to Gabriel Conroy says:

      I think Lee brings up a rather good point about economic life from 1965 until The Great Depression. Many people suffered and the elite and economists saw boom and bust cycles as natural and necessary. They also felt that it was morally wrong to help people during these times because it would go against nature. This is what caused people like Emma Goldman, Eugene Victor Debs, and Samuel Gompers to arise.

      You might be right about what many jobs have been like historically but I don’t get your acquiescence to the idea that it might be necessary for jobs to be like this. What is wrong with fighting for a better world for yourself and others?

      The reason that many on the left including garden-variety liberals like me distrust neo-liberalism is that it professes a belief in the welfare state but will quickly side the the right to gut the welfare state under the erroneous beliefs that people benefit via lower prices more than they benefit in higher wages, safe working conditions, and a society that believes in dignity and decency. I believe that many who call themselves neo-liberals advocate for these positions because they see themselves as being more immune to the downsides of globalization and outsourcing even though automation and globalization is coming for white-collar jobs as well now.

      I also wonder why the United States is seemingly unique in believing that job-creation means an unconditional kowtow to the bosses over everything. Where is your fight, man?Report

      • I don’t recall saying I “acquiesced” to anything. As to where “my fight” is, here:

        For the record, I oppose most efforts to lower social supports and the safety net and in most cases would prefer there’d be more than there are now. I think I oppose mandatory vacations. I haven’t made up my mind yet on mandatory paid sick leave or childcare subsidies. I am probably lean toward free trade and against protectionism.

        To this:

        I also wonder why the United States is seemingly unique in believing that job-creation means an unconditional kowtow to the bosses over everything

        I’m not a big believer in American exceptionalism. But I think I see your point. Here’s the rub. If one’s focus is on job creation, then the best way to attain that is to make it easier to hire people. If one’s focus is on other things, like access to decent healthcare, a guarantee of vacations, paid sick leave, and the like, then one will likely have to sacrifice some job creation to get that. For example, I support the ACA even though I believe it hampers job creation.

        I believe that many who call themselves neo-liberals advocate for these positions because they see themselves as being more immune to the downsides of globalization and outsourcing even though automation and globalization is coming for white-collar jobs as well now.

        The trouble with this argument is that it’s basically an ad hominem. It doesn’t address any of the policy proposals neo-liberals bring to the table and neither does it address the policy proposals non-neo-liberals support. For the record, my job is facing elimination due to budget cuts and a variety of austerity measures. So I’m torn. I want to keep my job. But I think my state is in fiscal trouble and budget cuts are part of the answer. I also think that my job–as much as I love it–is less necessary than others. Therefore, there’s a good reason why it’s a candidate for the chopping block. (To be sure, I’m in a comfortable situation and won’t want for food or shelter or even disposable income should I lose my job. So my straits aren’t as dire as some. I can’t claim to speak for others.)

        To this:

        I think Lee brings up a rather good point about economic life from 1965 [sic] until [t]he Great Depression. Many people suffered and the elite and economists saw boom and bust cycles as natural and necessary. They also felt that it was morally wrong to help people during these times because it would go against nature. This is what caused people like Emma Goldman, Eugene Victor Debs, and Samuel Gompers to arise.

        Since I do support a social safety net, I’m not sure how that’s a response to my comment.Report

      • Avatar Kim in reply to Saul Degraw says:

        “many people suffered” sure, but technological progress led to more employment, not less. Being upset that the horsemongers are out of a job (and thus suffering) when we’re getting cars (and car salesmen) is kind of silly.Report

    • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

      Maybe not you, but other people on this site have basically said hundreds of thousands of people dying in industrial accidents is just part of the process of advancing as a nation and if you oppose any sort of situation where labor may have a seat at the table, you’re dooming that country to become Third World forever because capital will just move to another nation that will happily crush labor.Report

      • Avatar Saul Degraw in reply to Jesse Ewiak says:

        To provide evidence for Jesse’s observation:

        http://www.slate.com/blogs/moneybox/2013/04/24/international_factory_safety.html

        Matty Y (Dalton, Harvard) telling us

        “Different Places Have Different Safety Rules and That’s OK”

        This was after a factory collapse that killed thousands.Report

        • Avatar Mike Schilling in reply to Saul Degraw says:

          Matt Y, like pretty much every pundit trying to distill deep economic truths from the building collapse in Bangladesh that killed over a thousand people, couldn’t be bothered to get the facts straight. The issue isn’t that Bangladesh had decided, either de facto or de jure, to eschew building codes. It’s that the building permit was for a retail structure of 5 storeys, but 8 storeys were built, much of it used for factories which create far more load per square foot. Also, after cracks appeared, the building was evacuated by police, and an engineer declared it unsafe, a government official reopened it under pressure from the factory owner.
          There are plenty of words available to describe this: fraud, corruption, criminal negligence.Report

      • Avatar j r in reply to Jesse Ewiak says:

        and if you oppose any sort of situation where labor may have a seat at the table, you’re dooming that country to become Third World forever because capital will just move to another nation that will happily crush labor.

        Out of curiosity, can you point to one instance where someone on this site has said this? And I mean literally this, not figuratively, meaning that they said something insufficiently kind about unions.Report

        • Avatar Road Scholar in reply to j r says:

          j r,

          That was pretty much the line of a commenter named Roger that used to hang out here more. (He still drops by but very infrequently.) It’s pretty standard libertarian, capital-focused, economic theology.Report

          • Avatar Saul Degraw in reply to Road Scholar says:

            Ah Roger. The guy who would bang up and down that it was technological innovation instead of human action that ended child labor.

            Quite anti-democratic and anti-agency of him.Report

          • I don’t have a cite, but I recall Roger saying he supports “voluntary” associations of workers and, if I’m not mistaken, he also supports employers entering into “voluntary” agreements with unions. “Voluntary” does a lot of work here (hence my scare quotes), but at the very least he’s not saying he opposes “any sort of situation where labor may have a seat at the table.”Report

            • Avatar Kazzy in reply to Gabriel Conroy says:

              I wrote a post on unions once wherein I argued that works should have every right to form unions/collectively bargain as they see fit and that employers should have every right to decide if and how they work with unions/respond to collective bargaining.

              No one should be required to join a union under any circumstances. No one should be forced to high union workers under any circumstances. And no one should be punished for joining a union or union-like organization.

              What constitutes “punishment” becomes a little tricky. I would say terminating someone solely for membership in a union would be punishment. I would not call firing a striking worker punishment. I would not call refusing to meet demands of a unionized worker punishment.

              To use a real life example, I work in an independent school and we are non-union. If ten of us were to approach our boss tomorrow and say we want a 10% raise effective for the 2015-16 school year*, we should be able to do so. And our boss should be able to say, “Enjoy finding employment elsewhere next year if those remain your demands.” Or she can counter or accept them or ask to meet with folks individually which we can accept or decline. If she fired us all on the spot, I’d call that “punishment”. If we demanded the raise immediately and refused to teach until receiving it, she should be able to fire us within the framework of our existing contract. And if other teachers wanted no part of our plan — or if one of the ten broke ranks and accepted a different offer — there should be no recourse from our part on them (I mean, we can give them dirty looks in the hall and stop inviting them to happy hours, but we shouldn’t be able to actually impact their work).

              I don’t know if this makes me the sort of person that @j-r was talking about, but if so, so be it.

              * We work on one-year contracts that run September to September and are renewed voluntarily by both sides usually in March.Report

              • Avatar Gabriel Conroy in reply to Kazzy says:

                Kazzy,

                I probably read your post when you wrote it, but alas have forgotten it. Do you have a link to it?

                What do you think about fair share/union shop provisions in union contracts? That’s the point I’m torn on.Report

              • Avatar ACIS in reply to Kazzy says:

                One thing you miss about the union and having a union representative is that it allows for the group negotiation without the principal being able to fire someone to “make an example” out of them.Report

              • Avatar Barry in reply to ACIS says:

                Yes. What Kazzy’s boss might well do is to immediately fire the person thought to be the leader, and then to have some 1 on 1 meeting’s.

                The first meeting would result in somebody being escorted off of the premises.

                I’ll bet that the rest of the 1 on 1’s would go quite smoothly.Report

              • Avatar Barry in reply to Kazzy says:

                “If she fired us all on the spot, I’d call that “punishment”. ”

                Your post contradicts itself:

                “No one should be required to join a union under any circumstances. No one should be forced to high union workers under any circumstances. And no one should be punished for joining a union or union-like organization.”

                “What constitutes “punishment” becomes a little tricky. I would say terminating someone solely for membership in a union would be punishment. I would not call firing a striking worker punishment. I would not call refusing to meet demands of a unionized worker punishment.”

                “And our boss should be able to say, “Enjoy finding employment elsewhere next year if those remain your demands.” “Report

      • Avatar DensityDuck in reply to Jesse Ewiak says:

        “other people on this site have basically said hundreds of thousands of people dying in industrial accidents is just part of the process of advancing as a nation ”

        Report

    • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

      “refer there’d be more than there are now. I think I oppose mandatory vacations. I haven’t made up my mind yet on mandatory paid sick leave or childcare subsidies.”

      By the way, why? Is there any evidence that the rest of the Western world (or in some cases, the rest of the entire world, including Third World nations even if those provisions don’t have much teeth) have been hurt by the idea that everybody, just not the lower classes deserve a break from work?Report

      • Avatar Saul Degraw in reply to Jesse Ewiak says:

        @jesse-ewiak

        I think the evidence basically shows that human productivity peaks at around 40-50 hours a week and decreases remarkably after that.

        There is also evidence that better working conditions=happier workers=higher profits:

        http://www.just-style.com/analysis/apparel-working-conditions-linked-to-profit_id124906.aspxReport

        • I have at least two concerns concerns about that line of argumentation, Saul. One is that “happy” is in the eye of the beholder. But I’ll concede that all things being equal, more leisure is probably a recipe for more happiness. (Again, all other things need to be equal to make that statement global enough.)

          The other concern isn’t so much that you and “the evidence” are wrong. It’s that to base one’s support for mandatory vacations primarily on the validity of that evidence is to make that evidence a very high stakes one. What if another study comes along and shows a 70 hour per work week increases productivity at whatever margin paid per hour? Then the mandatory vacation argument is undercut.

          I also find it morally questionable to insist that the main reason to require vacations is that it helps employers squeeze the most out of one’s workers. It’s almost like an “unconditional kowtow to the bosses.”

          “Primarily” does a lot of work there. And you didn’t say that increased productivity is the primary reason you support mandatory vacations. I’m mostly suggesting that raising the argument risks taking you (and me) down a path you (and I) probably don’t want to go.Report

          • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

            I think Saul is mainly using it against the largely American-centric notion that vacations make people lazy and less apt to work hard. When in reality, with numerous studies in addition to the one he posted, most people actually hit a wall after a certain amount of work.Report

            • Honestly, Jesse. I don’t remember ever having heard anyone in America say that vacations make people lazy. I’m sure some, or even “many,” have done so. But I just don’t recall it.

              Still, I’ll take your word for it that the notion exists and that it’s “largely American-centric.” My point about the argument itself being a unsavory one in its implications stands, however.Report

              • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

                Well, lazy may have been too strong, but there is a strong undercurrent of, “ya’ know, sure, you have your vacation, but if you really cared about the team/your career/etc., you wouldn’t abandon us and ya’ know, there’s always somebody else reaching for that brass ring.”

                http://www.nytimes.com/roomfordebate/2014/09/04/why-dont-americans-take-vacation-7

                http://www.marketwatch.com/story/americans-only-take-half-of-their-paid-vacation-2014-04-03

                ” Even though senior business leaders overwhelmingly recognize the importance of using time off, two-thirds of American employees said their company says nothing about the need to take vacation days or discourages using them.”

                ” “Fear,” says Scott Dobroski, career trends analyst at Glassdoor. “That’s the underscoring theme.” Some 28% of workers told Glassdoor they fear getting behind while they’re sitting on a beach, another 17% actually say they fear losing their job, 19% don’t take all of their days in the hopes that it will give them an edge for a promotion, while 13% are competitive and wanting to outperform colleagues. As workers shoulder a heavier workload post-recession, he says others are afraid of not meeting goals.”

                “Americans have less job security than European workers. That’s why they eat lunch at their desk and work late. And if you’re on vacation you are likely to miss important meetings.”Report

              • I didn’t click on the links, but those quotes, assuming they’re not taken out of context, do suggest there’s a problem of sorts. And it also clarifies a bit what you meant. I had assumed you were talking about the “laziness” argument as an argument against mandatory vacations.

                But now (and correct me if I’m wrong) I think you’re making a more subtle argument along the following lines. Employers may technically offer vacation time, but in practice don’t let employees take it. Therefore, if vacations were mandatory, employers would have to permit at least some time off.

                I’m not sure how widespread the problem you describe is, but if it is a thing, then I might be more willing to accept the idea of mandatory vacations. Maybe. I’m still very concerned about the cost in jobs creation, especially if the vacation is to be paid in some way by the employer. But aside from those concerns, how would the mandate work? Would it encourage more nominally “temporary” work to get around the requirement? In the US context, I also imagine a mandate would apply only to those employers who choose to offer vacation time, which would probably result in fewer employers offering it. But yeah, if an employer offers vacation, it’s a shame if he/she doesn’t actually permit employees to make use of it. And I’m at least open to discussing a solution to that problem, even if I’m still not comfortable with the proposed solution.Report

              • Avatar Jaybird in reply to Gabriel Conroy says:

                For what it’s worth, “mandatory vacations” are considered important for security. If a worker is a bad actor, them going away for two weeks will allow other people to do the job and find their bad action.

                (This is probably a bigger deal in the accounting department than grilling/frying but mandatory vacations *ARE* becoming a thing.)Report

              • Avatar Gabriel Conroy in reply to Jaybird says:

                @jaybird

                When I worked at a bank call center, we were actually required, for accounting purposes, to take a full week’s worth of PTO for a straight week. The rationale was that if we were going to embezzle money, a full week away from access to bank records* would militate against it.

                *We didn’t handle cash, but we handled bank account numbers and credit card numbers, and a really nefarious person–which to my knowledge describes absolutely none of my coworkers–could probably find a way to steal from the bank or commit identity theft.Report

              • Avatar Road Scholar in reply to Gabriel Conroy says:

                Gabriel Conroy: Employers may technically offer vacation time, but in practice don’t let employees take it. Therefore, if vacations were mandatory, employers would have to permit at least some time off.

                I may be in an unusual situation because of the nature of my work, but this is kinda sorta what I have going. You see, I’m assigned a truck and I basically live in the thing when I’m out. We get annual vacation pay, which is roughly equivalent to 1, 2, or 3 weeks of pay, depending on seniority, but there isn’t any particular pressure to actually take the time off. In fact, it’s not so subtly discouraged. I take my weekends by parking the rig here close to the house. But if I’m going to be absent for anything more than maybe four days — and certainly for as long as a two week vacation — I’m expected to park the rig at the terminal and “move out” so another driver can use it if need be, as well as wanting their equipment at a secure location. Which all sounds fairly reasonable except I live almost 350 miles from the nearest terminal which would necessitate a bus ride or other means of transportation home and back at my expense. Major hassle. They wouldn’t overtly give me any grief over wanting to do so; the grief is sorta built in.

                Given all that, I wouldn’t particularly care to have vacation mandated.Report

              • @road-scholar

                Thanks for sharing that, and it’s a pretty good counterargument to one of my objections to mandatory vacations. I’ll probably still come down on the side of not supporting mandatory vacations, but I don’t particularly have a good answer to that counterargument.Report

              • Avatar Road Scholar in reply to Gabriel Conroy says:

                Gabriel Conroy:
                @Road Scholar

                Thanks for sharing that, and it’s a pretty good counterargument to one of my objections to mandatory vacations. I’ll probably still come down on the side of not supporting mandatory vacations, but I don’t particularly have a good answer to that counterargument.

                I didn’t actually mean it as a counter-argument to you, Gabriel. I certainly enjoy the vacation pay, but actually taking the time off would be a big hassle.

                I guess what I’m saying is that I’m pretty supportive of companies (at least over a certain size, perhaps) being required to offer paid vacation and to pay you that regardless of whether you actually take the time off or not. But I wouldn’t support requiring that the worker actually take the time off. It should be the worker’s choice.

                It should also be acknowledged that there’s a huge difference in impact to the employer between one of 20,000 or so drivers taking a couple weeks off and “that one guy” that does something unique doing so.Report

              • @road-scholar

                Sorry I misread your argument, but thanks for clarifying.Report

          • Avatar LeeEsq in reply to Gabriel Conroy says:

            @gabriel-conroy that is one reason why supporting these policies from the position of happiness isn’t a good idea. However, you can support them on the grounds that humans need rest and can only work so much. That is a decent public health justification for limiting working hours and requiring mandatory vacations.Report

            • Avatar Gabriel Conroy in reply to LeeEsq says:

              @leeesq

              I think that’s a good point, especially when mandatory time off functions as a way to ensure that people who want time off can get it. But I also wouldn’t want to prevent someone from working long hours if they come to the conclusion that the tradeoff is worth it. Who am I to tell someone otherwise?

              I guess there’s a line that needs to be drawn in order to satisfy those two positions of mine. And any such line will be arbitrary. Maybe extending and/or more vigorously enforcing time and a half for overtime is one way to do this. It doesn’t compel time off, but it changes the incentives structure.

              Maybe some tweaking can make vacations more palatable for employers without raising the cost of creating jobs too much, where paid time off per hours worked per month is automatic, but at a lower rate of pay, but keeping the worker on requires the employer to pay even more. I’m just thinking out loud here. But maybe there’s a way to do it that respects my autonomy objection. If it’s not too costly, maybe it would also respect my “it hampers job growth” objection, too.Report

      • By the way, why? Is there any evidence that the rest of the Western world (or in some cases, the rest of the entire world, including Third World nations even if those provisions don’t have much teeth) have been hurt by the idea that everybody, just not the lower classes deserve a break from work?

        When I think of mandatory vacations, I have the following concerns: 1. If the vacation is to be paid by the employer, then that mandatory requirement increases the cost of taking on another worker. That would mean fewer “legitimate” jobs and more “off the books” jobs. 2. If the vacation is truly mandatory, that could mean someone could be arrested or otherwise disciplined for working more than the state allows him to. This latter might be an issue if, for example, the mandated vacation is not paid. Some people might prefer to sacrifice leisure for more money.

        Now, I’m willing to reconsider. My concern #2 is sincere on my part, but I honestly don’t worry about it overmuch. For #1, if the state somehow subsidized the vacation, then that would go a little bit toward addressing my concern #1. (We’d still have to consider payment. If it’s an employment tax a la SSA, we’ve still increased the cost of creating jobs.)

        For paid sick leave and childcare subsidies, the reason I’m on the fence is because, well, I fear, again, that sick leave might make it more costly to create jobs. But I don’t like the idea people feeling like they have to work. For childcare subsidies, I just haven’t wrapped my head around how it would be paid for and what incentives such subsidies might create. By incentives, I’m NOT referring to “ohmygawd, people will have more babies just to get the susidies.” Rather, I’m worried, for example, about (again) whether it will increase the cost of creating jobs (i.e., if the subsidies are linked to work and therefore paid by an employment tax) and about who will receive the money, how one qualifies for the subsidies, how much fraud (e.g., by unqualified child care providers) will be in the system. Still, I like the idea of helping people out who have children and who work.Report

        • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

          I think what it comes down too, is that I believe that in a advanced Western society, if you can’t pay your employees a decent wage, and pay them a few weeks vacation, and turn a profit, then you really don’t need to be in business, and you’ll be replaced by somebody who can handle all of that, and employ people, since as we’ve seen in Western Europe, you can have a healthy capitalist economy with paid child care, mandatory paid vacation, and all of that.

          Yeah, maybe there’ll be a slight temporary increase in unemployment or drop in new business creation, but again, in the long run, like with every other benefit given to workers that people worry will inhibit job creation and cause the economy will grind to a halt, business will adapt. And people will continue to get very, very rich, even if they have to give 4 weeks of paid vacation, to somebody who doesn’t deserve it like a cashier at a grocery store.Report

          • Avatar j r in reply to Jesse Ewiak says:

            in the long run, like with every other benefit given to workers that people worry will inhibit job creation and cause the economy will grind to a halt, business will adapt. And people will continue to get very, very rich, even if they have to give 4 weeks of paid vacation, to somebody who doesn’t deserve it like a cashier at a grocery store.

            That is a wonderfully uplifting story. I wonder if it is true.Report

            • Avatar Jesse Ewiak in reply to j r says:

              The existence of really, really rich people in Austraila and Europe tends to bore at least some of my argument out. I mean, unless, American management isn’t exceptional enough to deal with it. 🙂Report

          • maybe there’ll be a slight temporary increase in unemployment or drop in new business creation, but again, in the long run, like with every other benefit given to workers that people worry will inhibit job creation and cause the economy will grind to a halt, business will adapt. And people will continue to get very, very rich, even if they have to give 4 weeks of paid vacation, to somebody who doesn’t deserve it like a cashier at a grocery store.

            Hmmm…..my concern isn’t with “temporary” unemployment. It’s with the more long-term version. It’s also with creating a two-tiered economy, where the cashier at the grocery store is working off the books (because it’s too pricey to hire someone on the books) and doesn’t get the vacation other more privileged people do.

            Also, I never said a cashier at a grocery store doesn’t “deserve” 4 weeks vacation.Report

            • Avatar Saul Degraw in reply to Gabriel Conroy says:

              @gabriel-conroy

              Can you prove that your two-tiers happens in nations with mandatory vacation like most of Western Europe?

              If not, it is just a lot of concern trolling. Why is it that Europe can manage having mandated vacations and we cannot? You said you didn’t believe in American Exceptionalism and yet you seem to think two-tiers will happen here.Report

              • Avatar Murali in reply to Saul Degraw says:

                Europe also has a crappy unemployment rate.Report

              • Avatar LeeEsq in reply to Murali says:

                Parts of Europe have crappy to very crappy unemployment rates. It isn’t a near constant thing.Report

              • What Murali said. And at least since the 90s, France has had problems with employers ditching the “charges sociales.” Spain now has that problem, too: http://www.nytimes.com/2012/05/17/world/europe/spaniards-go-underground-to-fight-slump.html?_r=0

                Now, a few things I’ll have to concede: that article doesn’t mention mandatory vacations as a cause, although it does argue, or cite people who argue, that the difficulty and expense of hiring and firing people creates this upsurge of off-the-books employment. I’ll also admit something that surprises me. A Google search shows the unemployment rates in UK and Germany to be (by my lights) low (around 5%), although France’s seem to be around 10%.

                To be honest, I don’ t know if Spain has mandatory vacations.To be clear, I’m not arguing that mandatory vacations are the singular cause of this type of situation. But I am arguing that mandatory vacations, if the cost for them is born significantly by employers, are emblematic of policies that help create this type of situation.

                Also, not only do I “seem to think” the two tiers problem might happen here in the US, I believe it’s already here. Think of some employers taking advantage of undocumented immigrant labor by paying them less than they’d pay their “legitimate” (for lack of a better word) employees, or by paying them a larger nominal wage but not paying the payroll taxes. Think also of efforts by some employers to hire more people as part time to avoid paying the health-care mandate. That’s not off-the-books work, but it has a bit of two-tierness in it. (And again, I support the ACA, but it creates an incentive for employers to do something I don’t like.)

                I guess if you’re going to accuse me of being a concern troll, I can’t stop you. But I do insist that my “concern” is sincere and I am pointing to a real problem.Report

              • Avatar North in reply to Saul Degraw says:

                Note that a significant part of Europe’s Muslim problem is that Europe’s businesses won’t hire them for above the counter work. This is primarily because the labor regulations are so strict that the employers have very strong motivations to be highly picky about exactly who they wish to hire.Report

          • Avatar j r in reply to Jesse Ewiak says:

            It is a little vexing that you guys are usin Europe as the aspiration all example. Have you opened a newspaper lately?

            Also, as interesting as this discussion is, it would be many times more if you guys weren’t having an imaginary conversation with straw men.Report

          • Jesse Ewiak: in a advanced Western society, if you can’t pay your employees a decent wage, and pay them a few weeks vacation, and turn a profit, then you really don’t need to be in business, and you’ll be replaced by somebody who can handle all of that, and employ people,

            For me, the issue isn’t really the virtue or competence of employers and other business owners. And unlike some (but not all) of my libertarian friends, I don’t believe it’s presumptively wrong for the state to establish rules of fair business, which I take to be part of what you’re advocating for, inasmuch as the rules should be set up so employers would have to offer “a few weeks vacation” and sink or swim within that rule.

            For me, the issue on which I’m arguing–and which causes Saul to lob the “concern troll” ad hominem at me–is what incentives such a policy creates for the employer. For the unconscientious employer, increasing the cost of hiring someone creates the incentive to hire people off the books. For the conscientious employer who wants to abide by the law and do right by their employees, increasing the cost of hiring someone creates the incentive to hire fewer people. If the employer has 100 employees and could use an extra employee, she might not hire that extra employee if it’s too expensive. Which is good for the 100 she already employs, not so good for the one. If it’s “only” 1 out of 100, perhaps that’s not in the aggregate a bad thing, although it’s bad for the 1. But if it’s 10, or 50, or more, employees, then it gets to be bad in the aggregate.Report

  3. Avatar LeeEsq says:

    Gabriel Conroy: There’s a potential misperception and also some irony in that portion I just quoted. The (potential) misperception: I do understand that some people, and maybe Paul is one of them, want to gut the social safety net to “encourage people to work.” But another reason given for gutting the social safety net, at least that part of it that affects unemployment insurance, SSI, and employer provided health care is that reducing those obligations makes it less expensive to hire more people and less expensive to keep on those one already employes.

    Its not like we didn’t have a historical period with an industrial/service economy but no social safety net. We did , it was the United States from about 1865 or earlier until the New Deal. During this period, the United States economy operated in boom-bust cycles and some of those bust cycles could be very long like several years or more. During the bust times, many people struggled with all the bad parts of a low wage, high unemployment economy without a social safety net to make things even slightly easier. Even during the boom times, many people struggled to get by despite being employed. Not having a social safety net didn’t seem to make things better for most people.Report

    • Avatar Gabriel Conroy in reply to LeeEsq says:

      Don’t have much to disagree with what you said, Lee. Not sure how it answers what I said, though.Report

      • Now that I’ve reread my comment (and yours) I think I have an idea of what you were responding to. You were, if I’m not mistaken, suggesting that I believed “unemployment insurance, SSI, and employer provided health care” (for example) are bad. And you were juxtaposing that belief to a time when such benefits were less common if they existed at all.

        I was unclear. I didn’t intend to say I thought such things were bad. What I meant was that the argument that they retard job creation has merit. And someone who supports those policies ought to face the prospect that they are doing so at the cost of job creation. Also, I was even more unclear when I said “employer provided health care.” I was referring to the mandated employer provided care under the ACA. However, the way I phrased it in my comment meant that I was referring to the pre-ACA situation, when it was up to the employer whether or not to offer health insurance.Report

  4. Avatar Stillwater says:

    Saul,

    The paper you linked to cites three things that mainstream economists are increasingly talking about:

    1. Secular stagnation, which is “the idea that the economy could suffer from a shortage of demand over a sustained period.”

    2. Trade. Ie., that “the patterns of trade over the last three decades have lowered the wages of a large segment of the workforce. And prominent economists such as Joe Stiglitz and Jeffrey Sachs have openly warned about the negative effects of trade agreements like the Trans-Pacific Partnership.” Ironically, I just cited the TPP as an example of capital “colluding” (I think that was the operative term in the post I commented on) to create trade agreements which exclude labor, or labor’s interests (not to mention normal democratic procedures) to further, in this case, the interests of the investor class.

    3. Big Finance! “A recent paper from the Bank of International Settlements showed that a bloated financial sector was a drag on growth.”

    Now, of course people of varying levels of involvement, knowledges, personal interests, and ideological commitments will disagree about any or all of those. But the point I want to make is that insofar as each of them actually is contributory to wage suppression, and insofar as we want to elevate wages, then policy prescriptions are gonna be hard earned, both intellectually as well as politically. We’re more than knee deep in “free trade”, “trickle down”, “job creators” weeds, so deep that extricating ourselves while also honoring the peculiar conception of FREEDOM we Americans hold will require some mad political prestidigitation skills.Report

    • Avatar Stillwater in reply to Stillwater says:

      Been thinking about that last bit a bit…

      I tend to eschew major generalizations (because they’re so damn imprecise) but political contexts almost beg for such things. I’m wondering if the peculiarity of the American concept of “freedom” is that it’s inextricably linked to power, and not in a response-to, but in an expression-of sorta way. I mean, we love us some punition (highest incarceration rate in the world, yo!).; we love us some “military option is always on the table” resolutions to political problems; we love us some high-power dictatorial CEO types as models of what you too can accomplish if you just WORK HARD type nonsense; and most of all, we love us some pick yerself up by yer bootstraps! as a solution to achieving, well, whatever it is you want! You just need to exercise your own personal power!

      But power is a zero sum game, no? Or no?Report

      • Avatar LeeEsq in reply to Stillwater says:

        If you want to invoke David Hackett Fisher’s Albion Seed concept, you can argue that this concept of freedom traces back to the Cavalier and Scots-Irish tradition in American political thought. To the Cavaliers that settled in Virginia and the South, America was a place where anybody could be an aristocrat and have the aristocratic freedom if they worked hard enough. The Scots-Irish tradition gave us the don’t trend on us and tell us what to do aspect of American freedom. Both notions aren’t entirely favorable to governmental intervention to make the distribution of wealth more fair.

        The more liberal/left-leaning concept of freedom would go the concept of ordered liberty that Americans inherited from the Puritans and the Quaker concept of conciliation and compromise. Both seek to favor the community in some way, not necessarily above the individual but at least as equal to it. At least so you keep the social peace.Report

    • Avatar Kim in reply to Stillwater says:

      Stillwater,
      the papers i’m reading call “trade” technological innovation. And I think they’re right. Outsourcing is based upon technological innovation of logistical supply lines.Report

  5. Avatar Jaybird says:

    A million years ago, the last time we had a Clinton in the White House, there was a thing called “McJobs”.

    Clinton was bragging about the jobs being created and Michael Moore (remember him?) had a show called “TV Nation”. One of the things they did was show clips of Clinton bragging about the jobs created on his watch. Moore said “Let’s look at what *KIND* of jobs are being created!” and they were stuff like food service, customer service, so on and so forth. McJobs.

    One of the things that I thought was kinda unfair about this is the whole issue of team leads, supervisors, assistant managers, managers, and so on. You hire enough fry cooks and you’re going to need another team lead. You hire enough team leads, you’re going to need another supervisor.

    And so on.

    (Now, of course, there were a number of things that blew up in the late 90’s… but I remember the McJobs as being a precursor to the good things.)Report

  6. Avatar Vikram Bath says:

    academic elites like Tyler Cowen

    He teaches at George Mason. He’s awesome in a variety of ways–much more awesome than a lot of academics at elite institutions, but running the most popular blog in your field isn’t really a metric academics use to identify who is elite.

    Incidentally, I think it’s worth mentioning that among the economists who are most concerned, a lot of their problems stem from their lack of confidence in future worker productivity growth. We’ve had decades of such growth thanks to technology, with individual workers being more productive. They are now wondering whether future gains will do so or if automation will remove certain jobs completely with the gains obviously not going to the person who was just laid off but to the company owners.Report

  7. Avatar Mr. Blue says:

    I agree not to call you a xenophobe for pointing out the implications for trade policy if you agree not to call me xenophobic for pointing out that there are implications for immigration policy.

    Or call me xenophobic, if you wish. But if we’re looking at a future where we just don’t have enough value-producing work out there, that has implications for immigration policy.Report

    • Avatar Vikram Bath in reply to Mr. Blue says:

      For what it’s worth, I think this is a pretty fair offer.Report

    • Avatar Joe Sal in reply to Mr. Blue says:

      or for pointing out that there are implications for minimum wage policy.Report

    • Avatar Stillwater in reply to Mr. Blue says:

      Mr. Blue,

      But if we’re looking at a future where we just don’t have enough value-producing work out there, that has implications for immigration policy.

      Are we looking at such a future?Report

      • Avatar Kim in reply to Stillwater says:

        Yes, dangnabit, we are! When you’ve got 50% odds of computer programmers, of all people, being out of a job in 20 years — rosy picture, mind, yes we damn well are!Report

      • Avatar Mr. Blue in reply to Stillwater says:

        Stillwater,

        Beats me, but it looks to me to be central to the ideas of this post. The economic pro-immigration arguments hinge on the lump of labor fallacy being a fallacy. If the economy doesn’t expand to create jobs for the people, and we actually have a lump of labor, then I think we should to reconsider immigration policy.

        Whether it’s true, or not true, honestly makes the difference in how I feel about having a relatively open immigration policy. But it’s true or it’s not true, and isn’t true when we’re talking about globalization and not true when we’re talking about immigration.Report

        • Avatar Stillwater in reply to Mr. Blue says:

          Mr. Blue,

          What if it’s the case that globalization has created a lump of labor and that the economy hasn’t expanded to create jobs for those people? I’m not saying that that’s a fact, mind. I’m just asking whether they’re related in an important way.Report

          • Avatar Mr. Blue in reply to Stillwater says:

            Though we shouldn’t completely ignore the effect it has abroad, US trade policy (like immigration policy) should be to the benefit of Americans. If it can be demonstrated that it isn’t, or that there is a trade policy that could be more beneficial to Americans, I think we should consider it.Report

            • Avatar Stillwater in reply to Mr. Blue says:

              Fair enough. At least it’s an open-ended proposition! That’s more than I expected, actually. (No offense.)

              I think it’s an open question, since economic policy should always be an open question. The world changes, no?Report

    • Avatar Jaybird in reply to Mr. Blue says:

      How much inequality could we eliminate if we stopped importing poor people with no assets beyond a willingness to do menial work?Report

      • Avatar Kim in reply to Jaybird says:

        If only we could figure out which poor people those were, Jay. Enough poor folks start their own small businesses when they hit America.Report

      • Avatar Road Scholar in reply to Jaybird says:

        Jaybird:
        How much inequality could we eliminate if we stopped importing poor people with no assets beyond a willingness to do menial work?

        I don’t know, Jay, probably some, but the big driver on the growth of the GINI, if one is willing to view the graphs honestly, isn’t at the lower end between folks in the first three or four quintiles. It’s the very tippity-top soaking up all the gains in income like a sponge. Graphs that depict the median income of each of the lower four quintiles — where the center point of those spans fall — are roughly parallel over the last 30 years. It’s only the top that diverges, and even there it’s mostly in the very top.

        My take on it is that while each immigrant adds another unit of labor supply, she also adds another increment to aggregate demand for goods and services. It more or less washes out.Report

  8. Just as an observation many people who grew up in the Eisenhower years think of that period as normal and peaceful. Actually the U.S. was prosperous because most of the rest of the world had been devastated by World War II following the Great Depression, and their parents were terrified of Communists taking over or dying in a nuclear war. But those are not the sort of things parents tell their children.

    John Steinbeck toured the United States toward the end of that era and noted people seemed afraid to express an opinion on anything more controversial than a baseball game. That changed during the 1960s, when two decades of accumulated grievances all surfaced at once. But that was a reaction, not proof the country was as divided as it seemed at the time.Report

    • Avatar LWA in reply to Richard Everitt says:

      I keep hearing this theory that the postwar era was prosperous only because of the lack of international competition.
      Yet this can’t possibly explain it.
      We have had people like Roger tell us that we are living in a wildly prosperous age, and go on and on about the astounding rise of wealth in America 1980- present.

      Yet mysteriously little of this wealth is appearing in our paychecks.

      Even more mysteriously, during the postwar boom years, AKA The Great Compression, more of the wealth managed to find its way into worker’s paychecks.

      This argument is another variation of the “Stuff Just Happens” logic- that is, the wealth distribution in the economy is just some vast cosmic spontaneous order which cannot be tampered with, and certainly is not designed.
      So in the end, we just need to lie back and think of England.

      Yet it clearly isn’t.

      The global economy is a highly designed and deliberate construction- we are regularly regaled by breathless descriptions of how a product can be designed in Tokyo, financed in Germany, produced in India and purchased in America, and this all happens seamlessly and efficiently, borders and languages and cultures and governments melting away into the background.

      Yet let anyone speak about global minimum wage or global environmental laws, or a global banking transparency law to prevent tax havens, and suddenly we hear all about how complex international agreements are, how impossible it is to coordinate cultures and governments, whyy, its as if we are talking about fur clad traders from Westeros attempting to barter with naked savages or something.Report

      • Avatar Saul Degraw in reply to LWA says:

        This is not to say that we should go back to the racism, sexism, anti-Semitism, and homophobia of the 1950s though but I refuse to believe that the choice is between bigotry and economic hardship.Report

      • Avatar Saul Degraw in reply to LWA says:

        The problem with a global minimum wage is that the necessary amount for the U.S. or Europe is still much higher than the necessary amount for Bangladesh.Report

        • Avatar LWA in reply to Saul Degraw says:

          Its like anything else- global agreements on tariffs, patents, international contracts all are wickedly complex.
          Yet the obvious benefit to all industrialized nations in finding agreement was incentive to overcome the complexities.
          Labor doesn’t have a champion sufficient to create this incentive.Report

          • Avatar North in reply to LWA says:

            Oddly, non industrialized poor nations tend to not be interested in signing on to global agreements that will keep them non-industrialized and poor.Report

            • Avatar LeeEsq in reply to North says:

              Correction, the leaders of non-industrialized and poor nations tend to not be interested in signing on to global agreements that will keep them non-industrialized and poor. These leaders have varying degrees of democratic legitimacy ranging from complete to none at all.

              Regardless of the degree of democratic legitimacy, there is substantial debate in poor nations on the best way to stop being a poor nation.Report

              • Avatar North in reply to LeeEsq says:

                Sure Lee, agreed. But all governments, good and bad, like having opportunities for development: the good governments for votes and the welfare of their people, the bad governments for the opportunity to divert some of those resources for their own benefit.Report

      • Avatar North in reply to LWA says:

        LWA, you say “this can’t possibly explain it” and yet you don’t ever elaborate on why it can’t explain it. Is it because it’s inconvenient that we have no prospect of the rest of the world’s industry being either flattened by war or paralyzed by a nonfunctional economic theory system?

        It seems pretty clear that the US economy in the mid 1900’s was pretty much the only game in town. That produced a lot of surplus and there was a lot of fear of communism so there was a great collusion between corporations, government and labor. Definitely inequality was lower and bosses salaries were closer to the line workers. Then, of course, the rest of the world recovered, trade began and communism croaked and as that built in advantage vanished the easy lead America had dwindled and scarcity strained and ultimately smashed that great collusion.

        But when you talk about Global minimum wage laws, global environmental laws or global banking transparency laws you really are talking about something enormously complicated. You’re talking about a global government for one thing; good luck with that. It’s odd but most nations get pretty prickly at the idea of surrendering their sovereignty to rule by foreigners. I mean you say global minimum wage laws but undeveloped nations hear “global force the third world to not compete for manufacturing job laws”; you say global environmental laws and other nations hear “Global put our national resources under the control of wealthy hippies in Vermont laws”. It’s like you don’t think those laws would create enormous losses for other people. Oddly, when looking at things globally, other nations don’t like sacrificing their prospects and advantages to make first world nations more comfortable.Report

        • Avatar Joe Sal in reply to North says:

          I pretty much agree with this North and have a desire to see the pro globalist lose yards of skin and pounds of flesh to the nature of diversity. Although almost every institution or ideology of significant size pushes for unity and conformance. The trend has been fusion instead of fission for awhile now.

          What are your thoughts on that?Report

          • Avatar North in reply to Joe Sal says:

            I think I’d ask you to expand a bit more on what you mean before I’d feel comfortable expounding on it. FTR I view globalization as very clearly a positive force for us as a species but recognize that viewed on a national/regional level it’s a considerably more mixed bag (though I’d argue still a net gain but with diffuse benefits and very visible concentrated costs).Report

        • Avatar Road Scholar in reply to North says:

          North,

          North, I don’t see how any analysis can ignore the tremendous amount of pent-up consumer demand that was unleashed in the U.S. at the end of WWII. Both G.I.’s abroad and workers at home were earning good paychecks at the same time as government-ordered rationing. For two years you couldn’t buy a new car because the factories in Detroit were making Jeeps, tanks, and airplanes. Everywhere was the mother of all building booms as returning G.I.s married and started families. Not just housing, but also schools for the baby boom kids as well as colleges expanding due to the G.I. bill. It was like releasing a coiled spring.

          The devastation of Europe was a factor but foreign trade was a much smaller part of the economy both immediately before and after the war than compared to today. Japan didn’t really enter the trade picture in a big way until the ’70s, the rest of Asia even later.Report

          • Avatar North in reply to Road Scholar says:

            An excellent point Road Scholar but more complimentary to my own point than contradictory. There was all that demand and the only place that had the capacity to meet said demand was domestic manufacturing. There was virtually no competition from abroad.Report

      • Avatar James K in reply to LWA says:

        @lwa

        I keep hearing this theory that the postwar era was prosperous only because of the lack of international competition.
        Yet this can’t possibly explain it.

        I’m inclined to agree. Having wealthy trading partners with similar consumption preferences to you is good for a country, not bad for it. It would however explain why manufacturing firms were making so much money (which gave unions a lot of scope to collectively bargain for higher wages and better benefits and conditions).

        Also, I would note by GDP the US economy is doing pretty well, so the question isn’t “why is the US not getting richer?” its “where is the GDP growth going?” which is a different question. I’ve previously suggested “Your stupid, stupid healthcare system is eating it all”, but whatever the answer is it probably isn’t Europe’s post-war recovery.

        Yet let anyone speak about global minimum wage or global environmental laws, or a global banking transparency law to prevent tax havens, and suddenly we hear all about how complex international agreements are, how impossible it is to coordinate cultures and governments, whyy, its as if we are talking about fur clad traders from Westeros attempting to barter with naked savages or something.

        Not all coordination is created equal. The business arrangements that allows international trade is really just a series of bilateral arrangements between firms whose mutual interest is advanced by coordinating. That kind of coordination is easy. If you mean multilateral trade agreements, well when do you suppose the last one of those was signed? I’m pretty sure it was back in the 1990s. All the action (at least all the successful action) in trade agreements these days is in bilateral negotiations precisely because coordinating a multilateral agreement is too hard.

        And the political economy of trade agreements (which will almost certainly be of net benefit to each signing country) is much less fraught than environmental or labour standards.Report

        • Avatar Will Truman in reply to James K says:

          Somewhere in here it’s worth noting that we have our fair share of difficulties, and that’s despite sharing a lot of laws and whatnot. There are union-friendly states and union-unfriendly states, and the former complain about the latter in a “race to the bottom” while the latter wonders why they should have to go with somebody else’s standard. And this is within a framework of shared laws, shared culture, and state per-capita GDP’s all within the same ballpark. The greater the economic (and cultural) divergence, the less beneficial common ground that can be assumed an the less uniform laws make sense.

          Which goes back to the discussion elsewhere on this threat about world governance. It seems to operate under the assumption that there is one right best set of policies that we should be able to agree on. Which, it turns out, is pretty close to ours (and those of nations most like us!).Report

    • Avatar Saul Degraw in reply to Richard Everitt says:

      @richard-everitt

      I don’t think the havoc that WWII wrecked fully explains mid-century American prosperity. It might explain a lot of it but Europe did not lay in ruin until 1989. West Germany had their “economic miracle” during the 1950s. So did many other European countries. Harold Wilson was moderating the socialism of Labour in Britain by the 1960s and calling on a Labour Party that could be supported by the middle class and arguing that “the Britain that is going to be forged in the white heat of this revolution will be no place for restrictive practices or for outdated measures on either side of industry”. Japan also had an economic miracle in the 1950s or 60s and again a boom in the 1980s.

      I think that the far right has pursued deliberate policies and attacks against the post-WWII consensus that the New Deal was basically a good thing and these policies are continuing. It started with Taft-Hartley and is still ongoing.Report

      • I’m not economic historians, but I wouldn’t be surprised if the recoveries you cite in W. Germany, UK, and Japan came to full fruition in the 1970s and 1980s, at about the time the US started on its path to “deindustrialization.” In other words, the US’s relative wealth declined as other countries recovered. In still other words, that tends to support the argument that the devastation of WWII was one very important explanation for US prosperity.

        I think, anyway. There’s also two other issues. One is that I’m not an economist and am going only on impressions and some very short readings I’ve done on transnational business history. Not the stuff to bet the house one.

        The second is that the supposedly great wealth in the US during the 1950s pales in comparison to wealth in the US in the 1980s or 1990s or even 2009. Many things are cheaper now than then. There are also some big disparities now, and while there were some even in the glory days of the trente glorieuses (ca. 1945 – ca. 1973), I oughtn’t discount that. Still, I have my doubts that 1950s America was really so great compared with today.Report

        • Avatar Jesse Ewiak in reply to Gabriel Conroy says:

          “The second is that the supposedly great wealth in the US during the 1950s pales in comparison to wealth in the US in the 1980s or 1990s or even 2009. Many things are cheaper now than then.”

          Yes, we can have cheap HDTV’s and say, pensions or single payer health care. I don’t get this idea that it’s impossible to have iPhone’s and ya’ know, a decent-sized welfare state. I know this can happen. It is happening in multiple countries. The fact it isn’t happening in America is the result of policy choices that powerful conservative forces wanted, not something that _needed_ to happen for America to stay a stable Western nation.Report

          • It’s not just i-phones and hdtv’s….it’s also food and clothing.

            I was answering the question about the US prosperity in the 1950s. I wasn’t making an argument about the welfare state.

            I’ll repeat what I’ve said elsewhere in this thread, because it seems not to be acknowledged. I support expanding many forms of the social safety net (I didn’t elaborate, but one of the things I support are expanded food stamp programs, hopefully with fewer, not more, strings attached). I may oppose mandatory vacations for reasons stated elsewhere, and I’m undecided on other types of mandates (paid sick leave) and other policies (subsidized child care)–again, for reasons stated elsewhere–but I am not a priori opposed. I also support the ACA.Report

          • Avatar North in reply to Jesse Ewiak says:

            Ditto with GC, this canard Saul rolled out that neoliberals are against the safety net is pretty much libel. Neoliberals are all for effective safety nets.Report

            • Avatar Saul Degraw in reply to North says:

              @north

              I didn’t say that neoliberals are against safety nets but it does seem that if given the option of choosing deregulation or voting for a safety net provision, neo-liberals will always go with deregulation first without demanding that the right-wing make a concession on a safety net provision.Report

              • Avatar North in reply to Saul Degraw says:

                For example?

                To the general point, though, there’s a problem here too. Neo-liberals are generally favorable towards deregulation; they’re generally supportive of the safety net. So if conservatives are pushing for deregulation that’s generally something neoliberals aren’t opposed to so they’re not usually in a philisophical position where they would wish to be demanding concessions in exchange for the deregulation.

                For example, I like bread (a lot) and I like chocolate (a lot). If you zipped up and said “I’ll give you a slice of fresh baked bread” it would be against my interests for me to say “I’ll accept your bread only if you also spread chocolate on it.” That’d be foolish, I could easily end up getting no bread AND no chocolate. Since I want the bread it’s simpler to simply accept it and lobby for chocolate seperately.Report

              • Avatar Jesse Ewiak in reply to North says:

                And over the last 40 years, we’ve gotten truckloads of bread and a dollop of chocolate.Report

              • Avatar North in reply to Jesse Ewiak says:

                When you describe it like that you make it sound pretty good.Report

      • The Eisenhower years technically ran from January 1953 to January 1961, and the havoc wreaked – not wrecked – by World War II was most important for the first ten years after the war, say from 1945 to 1955. By 1989 Germany and Japan probably benefited from the effects of World War II, as they had a younger work force and more modern factories than did the United States. I do not see we are disagreeing here.

        Similarly that the far right led by men like Goldwater and Reagan sought to reverse what had been accomplished by the New Deal seems obviously true; so far as I know, they said that. But saying there was ever a consensus that the New Deal was a good thing is dubious; a lot of conservatives – both Democrats and Republicans – hated everything about it.Report

        • @richard-everitt

          To your last point, I’ll also add that there were many regressive features of the New Deal that in other situations I imagine some “progressives” here would likely oppose. These include state supported, industry controlled cartels (NRA, AAA); policies to increase the price of food (AAA again); payroll taxes; a social security and minimum wage program that in practice didn’t help most black and most women workers (although those programs were later expanded).

          Even the Wagner Act, for all it did to help unions, paved the way for the type of policies that have later hurt them. It’s been argued (Tomlins, The State and the Unions) that in practice the NLRB adopted many of the rules that Taft-Hartley later imposed. That doesn’t mean the Wagner Act was bad or regressive, but it does suggest that the law functioned as a way to control workers in addition to functioning as a way to empower them. It’s a “take the good with the bad” kind of thing.Report

  9. Jesse Ewiak:
    Maybe not you, but other people on this site have basically said hundreds of thousands of people dying in industrial accidents is just part of the process of advancing as a nation and if you oppose any sort of situation where labor may have a seat at the table, you’re dooming that country to become Third World forever because capital will just move to another nation that will happily crush labor.

    I don’t recall anyone saying that here. If it wasn’t one of the trolls, I’d be very surprised if anyone here has. They might have said something, the logical conclusion of which might be the endorsement of a situation you describe. But even then, I find it difficult to believe the non-trolls see it that way.Report

  10. I’ve been pretty punch above and perhaps I should state something that gets lost in the shuffle of what policies I believe in and what policies I don’t. I have whatever policy preferences I have, and they’re evolving. They mostly track to some version of what is commonly called neo-liberal, or as I say, “social safety net + free(r) markets + respect for individual choices.”

    Still, like all of the commenters here, I live in the real world. Take the minimum wage. Although I truly believe that minimum wages tend to depress job growth and, in recessions, speed job loss, and although I believe that minimum wages over the long haul hurt people by denying them job choices, and although I believe with other commenters at OT (including, I believe, Glyph, if I remember) that minimum would be better replaced by direct transfers to poor people by cutting out the middle-(wo)man–although I believe all that, I still realize it sucks to work jobs that are drudgery and hard (even if suppoedly “unskilled”) and I realize that the direct transfers I support are just not in the cards in today’s political world. Therefore, I’m much more on the fence about the minimum wage than readers here might think.Report

  11. Avatar Kolohe says:

    “(I don’t know if this is true or not, just using it as a hypothetical.)”

    The truth or falsity of that hypothetical is absolutely essential in answering the question in this post’s title, so throwing it around casual is jarring, at least.

    Re: dog walkers, from their site.

    Swifto’s college-educated walkers have degrees with majors such as animal behavior, acting, music, fine arts, and other creative fields. Having creative and compassionate dog walkers ensure that we hire people who have the time and the desire to be reliable, dedicated, and committed dog walkers.

    People with non-creative majors like finance and engineering don’t have time or desire because they have real jobs in their studied fields.

    (Is ‘animal behavior’ really a ‘creative’ field?)

    “But the Tech community is clearly willing to isolate themselves from their surroundings. ”

    First linked article in that sentence- OMG there are people not using public mass transit in the Bay Area.
    2nd linked article – OMG there are too many people using public mass transit in the Bay Area.

    Btw, the route of the system in the first article? From somwhere just short of the Golden Gate bridge to somewhere just short of the Bay bridge. All in the core of city of San Fransico.

    I suspect if current trends continue, the United States will see a population decline because fewer people will decide to have children especially if they are college graduates and are suffering in the current economy or went through periods of low-wage and low-benefit work before finding their footing. People might just think it is a better choice not to have kids based on their situation and not wanting a child to go through the same thing.

    So, immigrants are going to stop arriving? Pat Buchanan and Mickey Kaus will be tickled pink.Report

  12. Avatar Notme says:

    Maybe people will get off their duffs and get an education. That would be nice except that dems are always willing to increase the minimum wage for those with no education and no job skills. Why get either one when you can whine that McDonald’s should give you 15 per hour for mouth breathing while flipping burgers?Report

    • Avatar Kim in reply to Notme says:

      So you’re in favor of relatively high danger jobs paying peanuts?
      (everyone I know who’s worked in a McDonalds has come out of there with scars).Report

  13. Avatar LeeEsq says:

    North: But when you talk about Global minimum wage laws, global environmental laws or global banking transparency laws you really are talking about something enormously complicated. You’re talking about a global government for one thing; good luck with that. It’s odd but most nations get pretty prickly at the idea of surrendering their sovereignty to rule by foreigners. I mean you say global minimum wage laws but undeveloped nations hear “global force the third world to not compete for manufacturing job laws”; you say global environmental laws and other nations hear “Global put our national resources under the control of wealthy hippies in Vermont laws”. It’s like you don’t think those laws would create enormous losses for other people. Oddly, when looking at things globally, other nations don’t like sacrificing their prospects and advantages to make first world nations more comfortable.

    NorthQuote

    On the more left-leaning blogs I read like LGM, I’m constantly astounded by the people who still sincerely believe that global government is not only possible but desirable. Global government is going to have tremendous problems of scales. I can’t see anyway that an effective global government is going to be democratic in any meaningful sense. Even a shame democracy like what they had in the USSR would be too much for an effective global government. Even if you can create a global democracy, there seems to be some weird assumption that a global government is of course going to be some sort of social justice, Enlightenment values left-leaning sort of thing. Evidence suggests that a global democracy would be a much more socially conservative or even reactionary force. The majority of the world’s people do not hold to Enlightenment left-liberal values and this will show in the global government.Report

    • Avatar Will Truman in reply to LeeEsq says:

      Who wants to live in a jurisdiction where China has 3-4x the voting power of the US? We could have a global senate, but I’ve been informed the disproportionate representation in the Senate is shameful (and indeed, on a global scale the enormous disparities would create problems far greater than the California/Wyoming issue).Report

      • This old Washington Post graphic might be an interesting place to start a discussion of a one-person-one-vote global government.Report

        • Avatar North in reply to Michael Cain says:

          The mind reels. I knew it, of course, intellectually but graphically that is an incredibly well done presentation of it.Report

        • Avatar LeeEsq in reply to Michael Cain says:

          China and India are going to have over one-third of the global votes in a global one person, one vote democracy. If you add Pakistan and Bangladesh you have about 40% of the world’s population in four countries. Neither of these four countries are exactly known for Enlightenment liberalism.Report

      • Avatar Jaybird in reply to Will Truman says:

        Maybe we could set it up so that just because China has soooo many voters, that doesn’t mean that it has an overwhelming vote majority.

        Like set up two different branches and each country gets proportional representation in one, but every country has *EQUAL* representation in the other?

        And maybe establish a bunch of things that we say that China (or others) do not get to vote on no matter what? Like they shouldn’t be able to vote away the right to health care or something?Report

    • Avatar North in reply to LeeEsq says:

      It’s a near universal truism that any constituency arguing for a regulatory power always is imagining that they are the ones who’ll be managing said power.Report

  14. Avatar Rufus F. says:

    re: there are just not enough jobs- is this really true?

    I mean, I know it’s probably true in fact, but is it necessarily true? I recently read this ridiculously optimistic general reader in economics that was, admittedly, very neoliberal, but that was one of the author’s points: that there’s no reason we should ever run out of jobs. Again, it was very optimistic, but is this maybe just an artificially depressed labor market?Report

    • Avatar Will Truman in reply to Rufus F. says:

      There are always things to do, and always will be. Less certain is whether there are jobs to do that add enough value that we want to or can afford to pay them what we consider to be a livable wage.Report

      • Avatar Rufus F. in reply to Will Truman says:

        It seems so randomly cultural though. I mean, I know people who manage social media sites for weddings and that’s considered “adding great value” by the people who pay them. Meanwhile, if I had to think of what jobs are most critical to maintaining the sort of life I want to live, I would start with people like garbagemen and plumbers as most needed.Report

        • Avatar Rufus F. in reply to Rufus F. says:

          I guess what I’m saying is just that the problem seems more that we’ve run out of imagination than reached a finite number of jobs.Report

          • Avatar Jaybird in reply to Rufus F. says:

            How many jobs exist today that did not exist (at all) for our parents?

            How many of the jobs that our parents had to do have been made obsolete?

            To bring me back to the 90’s, something as simple as “everybody buying a computer and wanting to hook it up to the internet” created, out of thin air, hundreds of thousands (if not millions) of jobs.

            I hope for another similar invention that everybody and her sister will have to own, have to support, and have to update. This, too, will create hundreds of thousands (if not millions) of jobs.Report

            • Avatar Joe Sal in reply to Jaybird says:

              When do we get to a point that everyone wants to buy, hook up and update their own job at home? and it creates millions of jobs that weren’t there before?Report

        • Avatar ScarletNumber in reply to Rufus F. says:

          Yes but the difference is that being a plumber is a skill, while being a garbageman isn’t.Report

    • Avatar LeeEsq in reply to Rufus F. says:

      There lots of things to be considered when determining whether or not there enough jobs. A person who trains to be an academic can get other types of work if academia doesn’t work out as you know from personal experience. Its just that a lot of people trained to do a particular white collar work get at least a little frustrated when they can’t find a job in their field and have do to less remunerative work. Even if you can find equally remunerative work, some of it might be of a nature people don’t want like sex work.Report

      • Avatar Rufus F. in reply to LeeEsq says:

        Lee Esq: I think we’re talking about the same thing here so… we all know that I am also one of those white collar trained people who is deeply frustrated by the work currently available to me, yes? Speaking from current experience, a wee part of the frustration is the money issue, but a huge part of it is how stultifying so much of the available work is to do. I work very hard and have a low level of financial need, but man, would I love to be challenged for a few months!

        Saul: I am fairly pessimistic at present, admittedly, but I find the notion of another recession horrifying in terms of social unrest. At some point, the center will not hold.Report

        • Avatar Saul Degraw in reply to Rufus F. says:

          @rufus-f

          I suspect that there are a lot of people in the world who are willing to have everything be a gamble. Now I also suspect that many of these people always had safe bets or were never in a gambling position. The “Born on third and thought they hit a triple” crowd.

          So there answer to those suffering from the adunctification crisis and law-school crisis is “Tough. You made a gamble and you lost. So what?”Report

          • Avatar Rufus F. in reply to Saul Degraw says:

            I don’t even disagree exactly. I think there are advantages to social instability. It’s just a matter of how far we want to take it.Report

          • Avatar Stillwater in reply to Saul Degraw says:

            Saul Degraw,

            So there answer to those suffering from the adunctification crisis and law-school crisis is “Tough. You made a gamble and you lost. So what?”

            Well, there’s ways to phrase and perspectives to take on it and various textures to the varied complaints about it….

            One thing I’ve mentioned before is that the Law School Crisis is just an instance of a wider “white collar work” crisis, or at least “academic jobs crisis”. That is, it’s an instance of a much larger set of problems (if one is inclined to look at it like it’s a problem). (And frankly, I have a hard time believing that folks who entered onto certain career paths without any due diligence regarding job prospects have to bear quite a bit of responsibility for their current situation. But hey, that’s just one guy’s opinion!)

            On the other hand, I think an argument can be made that the Law School Crisis (I love that phrase!) is indicative of, or evidence of, a certain type of problem we – as a nation! – are currently in the midst of. Namely, that as our cultural-expectation machine keeps clipping along and folks just keep getting smarter, with all the correlated expectations regarding what they want to do with their lives, the pressure imposed on our domestic economy to satisfy those expectations in terms of legitimate job opportunities increases. It’s what I’ll call “The Big Squeeze”, defined as “when the expectations of a labor force confront the market machinery from which those expectations arose”.Report

            • Avatar Saul Degraw in reply to Stillwater says:

              @stillwater

              I come back to the law firm/school issue and the adjunct issue because those are the areas I know about and read the most about.

              There are other examples but I think it is more complicated than mere due diligence. There were a bunch of years when going to law school was a largely rational decision and then it suddenly became an irrational one and this was based upon available information. It turns out that US News and World Report and the Law Schools did a lot of numbers cooking and mainipulation. Can you blame people for acting on available information if that information was manipulated?

              IIRC Pharmacy school also went through the same kind of boom and bust where it was largely a good decision and then suddenly became a not good decision.

              My bet is that the same thing is going to happen to computer programming/coding because that seems to be the new sure bet path.

              The last paragraph brings up a very complicated problem and if you are right, a lot of people are not going to be very happy. Suppose you are a middle-class and upper-middle class person and told that your children only have a 50 percent chance of being middle-class or upper-middle class no matter how well they do in school and even if they pick something extremely practical. Are you going to raise your kids in less comfortable ways? Are you going to sacrifice your own comfort so your kids don’t get used to it? I imagine the answer to this is no for many people.Report

              • Avatar Stillwater in reply to Saul Degraw says:

                Saul Degraw,

                I know a lot of people who were, and in fact are, in the exact same situation you are. It’s not like I think you’re just whining! It’s a real problem. And I’m inclined to think that what I said in that last paragraph gets closer to why it’s a problem than, say, a perusal of individual cases. So in that sense, I agree with you about the law school crisis, tho perhaps not for the same reasons. (And perhaps I place too much emphasis on due diligence…. OK, yes. I do. Lots of kids in my fambly are underemployed in their fields or unemployed thru no fault of their own.) And the reason is that kids – being humans – look at the world they live in and make decisions about how they want to proceed. And those decisions are primarily based on expectations which arise from the types of lifestyles they actually experience. I don’t know how that intrinsic property of human nature (yes, I went there!) can be eradicated simply by taking a class on Free Markets In The Age Of Globalization.Report

              • Avatar Kim in reply to Saul Degraw says:

                Who the FUCK thinks computer programming is the NEW sure path?
                I’ve got some fucking education to give ’em.
                Morons.Report

          • Avatar j r in reply to Saul Degraw says:

            Now I also suspect that many of these people always had safe bets or were never in a gambling position. The “Born on third and thought they hit a triple” crowd.

            So there answer to those suffering from the adunctification crisis and law-school crisis is “Tough. You made a gamble and you lost. So what?”

            This is the perfect example of why trying to impute motivations to certain people based on who you think they are leads to bad argumentation. In my experience, most of the people caught up in the so-called adjunctification and law school crises are themselves the people who were born on third. The idea that playing by the rules and earning the right credential ought to guarantee you an upper-middle class lifestyle is generally something that people born into the upper-middle class think.

            People born into working class families tend to understand a bit more intuitively that nothing is guaranteed and that a bit of hustling and making do and making the best out of sub optimal situations is just a part of life.Report

            • Avatar Rufus F. in reply to j r says:

              I don’t know that this is entirely true. As I’ve talked about here to the point that it’s probably getting tedious, I was raised in a working class family and have always done blue collar jobs so, on the one hand, I can’t really imagine not working or having to go on welfare or not hustling. Still, it’s *very* hard to explain to my parents why having a PhD doesn’t mean I can walk into any university and say “I’m here to teach now!” I think people from third base families tend to know more about the economic world and how it works actually.Report

              • Avatar Stillwater in reply to Rufus F. says:

                I think people from third base families tend to know more about the economic world and how it works actually.

                Well, sure they do. They’re surrounded by people who are economically successful!Report

              • Avatar j r in reply to Rufus F. says:

                You’re demonstrating my point, which is about you and not your parents.

                You’re working a blue collar job and not some artisanal, hipster blue collar job.Report

              • Avatar Stillwater in reply to j r says:

                errruuuhhhwhat?Report

              • Avatar j r in reply to Stillwater says:

                That was a response to @rufus-f.Report

              • Avatar Road Scholar in reply to Rufus F. says:

                Rufus F.:
                I don’t know that this is entirely true. As I’ve talked about here to the point that it’s probably getting tedious, I was raised in a working class family and have always done blue collar jobs so, on the one hand, I can’t really imagine not working or having to go on welfare or not hustling. Still, it’s *very* hard to explain to my parents why having a PhD doesn’t mean I can walk into any university and say “I’m here to teach now!” I think people from third base families tend to know more about the economic world and how it works actually.

                I hear you loud and clear, Rufus. My background is decidedly blue collar as well. My generation was the first to even really consider going to college and of four siblings only one other has a degree, and she only worked in her chosen field briefly. Families have cultures ever bit as much as countries do. When I was going to school the question from family members would be, “So what kind of job will that let you do?” Not “career” or “position” or “profession”, but J.O.B. I had no examples, no template to follow, no father or brother or uncle to guide me.

                Make no mistake, my failure to succeed in “breaking out” is ultimately owned by me but other factors like timing* didn’t help.

                * I graduated in the midst of the Reagan recession, which at the time was the deepest since the G.D.Report

    • Avatar Saul Degraw in reply to Rufus F. says:

      @rufus-f

      I think it is a combination of what Lee and Will said. And a bit of what Jaybird is saying.

      There will always be stuff to be done but the real question is whether there will be enough stuff to be done at a decent standard of living. Liberals like me believe that the mass middle class is created by regulation, worker’s rights, and a strong social safety net that can handle periods of economic downtown. It is not created by regulation and destroying social safety net programs like social security.

      The Great Recession and Tech 2.0 booms (aka “disruption”) took away a lot of mid-range/middle-class jobs and these were replaced by low-wage service jobs largely. The Vox article by Dylan Matthews notes that the United State still needs to add 4 million jobs to get rid of the damage done by The Great Recession.

      If decent paying jobs are a zero-sum game than politics is going to get very nasty and very quickly especially if there are more people born into the middle-class and upper-middle class than there are replacement jobs for that group. Parents usually want their kids to live at the same level they do or better. Very few people are okay with the idea that their children might have lower standards of living.

      Hypothetically, let’s say that there is a society with 1,000,000 people and 250,000 of those people have college degrees or above and jobs that match their levels of education. Let’s say that there are also 250,000 people in this group that are 21 year old recent college graduates

      Technological advances and a recession cause 150,000 of those middle-class and upper-middle class jobs to be eliminated. Let’s say that it will also be 30-40 years before those jobs are replaced. This is what happened to many skilled craftspeople during the Industrial Revolution of the 19th Century. It took about 30-50 years before better paying jobs were created and many people suffered greatly.

      So now you have a job deficit of people who can do highly-skilled work but there is not highly-skilled work for them to do. This causes stuff like adjunctification and a rise in contingency labor and/or under employment and this can cause unrest especially when it hurts the middle class and upper middle class. In another thread, Lee noted that 19th century Italy had a large population of highly educated but underemployed doctors and lawyers and that much of the rest of the population survived on sustenance farming and was lucky if they got 150 days of other labor. The poor tended to immigrate to the New World and the underemployed doctors and lawyers drifted into radical politics on both the left and the right and this potentially gave birth to Fascism.

      There are others who think that elite overproduction tends to lead to social unrest:

      http://www.bloombergview.com/articles/2013-11-20/blame-rich-overeducated-elites-as-our-society-fraysReport

      • Avatar James K in reply to Saul Degraw says:

        @saul-degraw

        There will always be stuff to be done but the real question is whether there will be enough stuff to be done at a decent standard of living.

        That is the real question, the labour market will clear, but it won’t necessarily do it at a socially acceptable price.

        The question then becomes, assuming that’s what happens what do we do about it? Ultimately for a job to be a Good Job it has to have a Marginal Product of Labour high enough to be worth the combined cost of pay, benefits and conditions that collectively makes it a Good Job by your definition. A job that is too low productivity to be a Good Job cannot be turned into a Good Job by the government simply declaring that it is. Mandating certain conditions (such as mandatory paid holiday) might make sense, but they aren’t going to make employers more generous. Pay will drop and holidays will rise.

        To me, the questions to ask are:
        1) What can the government do to raise Marginal Product of Labour? This is the sort of question that failing to answer can score you a Nobel.
        2) What can the government do to directly improve the living conditions of people who lack Good Jobs? This question is a lot simpler.

        I don’t see another angle of attack that actually fixes the problem.Report

        • Avatar Mike Schilling in reply to James K says:

          This is the sort of question that failing to answer can score you a Nobel.

          I have discovered a wondrous solution for this problem, but it is too large to fit in the margin of this check for a million pounds.Report

        • Avatar Kim in reply to James K says:

          What can the government do to raise Marginal Product of Labour? This is the sort of question that failing to answer can score you a Nobel.

          … this is actually a fairly easy question to answer. The government needs to make the average laborer smarter (or more dextrous, or with more emotional intelligence).

          Efforts to do so, on a governmental basis, are quite likely to be deemed cruel. When done by a family, however, you can be sure they won’t be called child abuse.Report

  15. Avatar Jaybird says:

    Stillwater:
    Lee is onto it. I was gonna say the US economy from 1900-1970ish. Lots of growth, no increase in wealth inequality (a decrease, actually) by lots of metrics.

    Also, the USSR economy had sustained growth without wealth increasing inequality (!!) until Reagan asked Gorbachev to tear down that wall (in the form of a dirty little war…).

    The first graf has me asking “for whom?” and the second has me wondering “at what cost did it take to achieve that?”

    I deeply suspect that there are a lot of things that tied together. Unpleasant things.

    I mean, we can say stuff like “It was possible for a man to make a living and raise a family without his wife having to work!” about the 50’s. How many things are we ignoring when we say that?

    How many things are we ignoring about the USSR when the Berlin Wall was still up?Report

    • Avatar Stillwater in reply to Jaybird says:

      Jaybird,

      You could have refined the question by including lots of conditions to ensure getting the right answer. But you didn’t.

      Nevertheless, I get your point. In the absence of any super-compelling evidence, however, I reject the idea that rising inequality is necessary for (or logically entailed by, whatever) economic growth. Acourse, if you’re just using the US economy over the last 50 years as an exemplar (or paradigm) of good things that happen when gummint gets outa the way (I’m not sure you’re saying this, btw) then I think you’re begging the question against everyone who views wage-stagnation, rising inequality, etc. as a problem.Report

      • Avatar Jaybird in reply to Stillwater says:

        I’m not trying to get the “right” answer.

        I’m trying to figure out why we see “inequality” as the measuring stick to the exclusion of other measuring sticks. Is Patriarchy no big deal? Are secret police no big deal?

        It reminds me of the recent articles telling people to get to Cuba before Capitalism ruins it. What in the hell measuring stick is being used here?Report

        • Avatar Stillwater in reply to Jaybird says:

          I’m not trying to get the “right” answer.

          I’m trying to figure out why we see “inequality” as the measuring stick to the exclusion of other measuring sticks.

          Because you think using inequality as a measuring stick is the wrong answer, yes?

          In all the discussions I’ve participated in here at the OT on the topic of inequality, I’ve never heard a single complaint against inequality. THe complaint is against rising inequality. For example, Jesse’s earlier comment, the one that started this subthread and the one you specifically referred to, mentioned “skyrocketing” inequality. I could probably dig up all those old threads where this was hashed out in pretty fine detail if you wanna refresh your memory on why some people think it’s a big deal. (Those were good threads, actually. Worth checking out if you weren’t participating.) But I also think that rising inequality isn’t viewed as the cause or main complaint of anything related to our domestic job markets, I think it’s cited as an effect of a bunch of trade and labor policies which have permitted it to happen, one which creates some problems of its own (hashed out in those earlier threads). (Of course, there are cynics out there who think current trade policy simply is the product of money-grubbing capitalists…) For example, there’s plenty of profit being realized in the economic landscape, but very little of it reaches wage earners (wage stagnation) or creates new demand for domestic white collar workers (OWS!) or etc. All the standard complaints.

          I mean, I get that this is sorta the logical conclusion of free market fundamentalism given where this nation was and is wrt relative wealth and earning power, but lots of folks don’t wanna go down that road any further. They want good paying jobs in certain types of careers. I don’t think that’s unreasonable, actually, even if revising policy to realize those desires it is pert near but not just yet an impossibility. (Which is why I’m happy Saul linked to the article at the top of the OP.)Report

          • Avatar Jaybird in reply to Stillwater says:

            Because you think using inequality as a measuring stick is the wrong answer, yes?

            I think that using inequality as a measuring stick gets us to absurd conclusions (e.g., stagnation for everybody is better than little improvements for the lower classes, middle improvements for the middle classes, and big improvements for the upper classes).

            I see rising inequality as a good thing because I think that wealth takes many different forms than merely wages. Yes, there are personal electronics, but there are also major advances in refrigeration tech, dishwasher tech, washer/dryer tech, computer tech, housing tech, energy tech, and so on and so forth. Hell, what percentage of the country is getting a college education compared to decades ago? Luxuries that used to only be in reach for the upper classes are now taken for granted.

            It seems to me that using skyrocketing inequality as a measure fails to take into account the social benefit of all of that R&D turning into 2nd generation stuff turning into 3rd generation stuff turning into “it’s pretty crappy of you to use big screen LCD televisions as an argument for how poor people aren’t really poor.”

            If we define wealth as wages, sure, wages are stagnant and therefore wealth is stagnant. If we define wealth as stuff like “average education level” and “market penetration of technology”, then we have never been wealthier and that will be true again next year and the year after that and for the foreseeable.

            Do we need to do better to, for example, make sure that more people have access to more education and more technology? Of course we do. But that’s an argument for how far from the floor they are. Not how far from the ceiling they are.Report

            • Avatar greginak in reply to Jaybird says:

              Jay- Is there any level of inequality that would concern you?

              One way i’d guess a country had a small class with great power to mold the laws to their benefit would be that a very small percentage of people have ever increasing wealth/power while other people stagnate. That seems to be the situation we have in the US. It seems like concerns libertarians about gov power being co-opted and captured by rich folk would lead to inequality. That isn’t the only way to look at it. But rising and wide inequality seems like a very possible consequence of the often correct criticisms libertarians make.Report

              • Avatar Jaybird in reply to greginak says:

                Inequality doesn’t bother me anywhere *NEAR* as much as distance from the floor. If people have four walls, three hots, a cot, and a handful of other amenities, it doesn’t bother me *AT ALL* if the richest people in society can afford (new luxury).

                Let’s say that they invent a new drug that will allow you to live to 500 years old… but it costs 10 million dollars. It does not bother me *AT ALL* to know that the 1% of the 1% will start living to 500.

                Poor people not making it to 5 years old? Oh yeah. That’s a problem. We have a moral obligation to address that. But the ceiling? I’m not looking at the ceiling. I’m hoping that I live long enough to see the drug cost $1 Million and sell my house to get it.Report

            • Avatar Kim in reply to Jaybird says:

              Jay,
              you not concerned about 47% of current american jobs being gone in 20 years?
              Bad time to go to college, yes?Report

        • Avatar Joe Sal in reply to Jaybird says:

          One measuring stick of the progression of capitalism (1-3 for those who follow) is that the means of production assets are slowly captured by the upper crust capitalists. Local coffee shops, bakeries, dairies, tailor shops shut down and are replaced by larger companies who have gained efficiency, through access to cheaper labor and supply chains.

          Cuba could have a boom to the middle class as those assets pass through that layer, but it very well could leap frog the middle.Report

          • Avatar ACIS in reply to Joe Sal says:

            Unintended negative consequences of unregulated capitalism.Report

            • Avatar Oscar Gordon in reply to ACIS says:

              US Capitalism is quite heavily regulated. Whether or not it is smartly regulated is a much more interesting question.Report

              • Avatar Dave in reply to Oscar Gordon says:

                @oscar-gordon

                US Capitalism is quite heavily regulated. Whether or not it is smartly regulated is a much more interesting question.

                I wonder if people that harp on and on about unregulated capitalism have the capacity to handle the complexities such a discussion requires.Report

              • Avatar Oscar Gordon in reply to Dave says:

                @dave

                I know it’s regulated enough at every level that I would need to call in professional help to be able to have that discussion.Report

              • Avatar Dave in reply to Oscar Gordon says:

                @oscar-gordon

                You underestimate your abilities to carry on a conversation about it. As far as I’m concerned, if you can understand the issues, that’s good enough for me.Report

              • Avatar Mike Schilling in reply to Dave says:

                You can’t HANDLE the TRUTH!Report

              • Avatar Gabriel Conroy in reply to Dave says:

                @dave

                Dave: I wonder if people that harp on and on about unregulated capitalism have the capacity to handle the complexities such a discussion requires.

                Unfortunately for me, I have a hard time even defining or understanding what “capitalism” is.Report

              • Avatar Road Scholar in reply to Dave says:

                Dave:
                @Oscar Gordon

                US Capitalism is quite heavily regulated. Whether or not it is smartly regulated is a much more interesting question.

                I wonder if people that harp on and on about unregulated capitalism have the capacity to handle the complexities such a discussion requires.

                I’m game.Report

              • Avatar Dave in reply to Road Scholar says:

                @road-scholar

                You first.

                @gabriel-conroy

                Unfortunately for me, I have a hard time even defining or understanding what “capitalism” is.

                This is one part of the problem and the part that ties directly to Pat’s recent post. Good luck trying to get two people to agree to a basic framework that allows for a productive conversation.

                Even if you can get to a working definition of capitalism, good luck getting to a workable definition of “unregulated”, especially in a world where most major markets for goods and services are subject to a regulatory framework, especially financial markets (in my past life, I had to take the Series 7 and 63 and was subject to more compliance meetings than I care to count).

                I’ll admit to a bit of a personal bias. Being in real estate finance for the last 20 years and having an academic background in finance makes me relatively impatient towards know-nothing populists types or broad based ideological arguments, including some of the crude free markets arguments I’ve seen posted here from time to time.Report

              • Avatar Dave in reply to Dave says:

                @road-scholar

                We can do this two ways. If you think this can turn into a good conversation, we can communicate via email and make it into a post similar to the one Saul and I did for Market Basket. Otherwise, we can have it here. Whatever works. The former interests me because you don’t strike me as the populist type.Report

              • Avatar Road Scholar in reply to Dave says:

                Dave,

                That could be fun. And you’re right, I’m not a populist, or at least I don’t think so. My attitudinal disposition is Liberal (as per current political usage) but I like to believe I have a fairly good grasp of economics and I tire of proposals from my flank that make me think, “That ain’t gonna work!”

                Let’s do the e-mail thing. It may be a sort of slow back-and-forth process since I’m back on the road tomorrow morning but our only deadline is self-imposed, correct?Report

              • Avatar Kim in reply to Dave says:

                I don’t suppose you would consider the white slave trade unregulated?
                Sometimes things are regulated with prison time…Report

          • Avatar Stillwater in reply to Joe Sal says:

            Cuba could have a boom to the middle class as those assets pass through that layer, but it very well could leap frog the middle.

            This happened when Mother Russia was liberated from the chains of communism, yes? A handful (literally!) of well connected folks became owners of entire economic sectors and have used their political/economic power to prevent the entry of competition.Report

            • Avatar Chris in reply to Stillwater says:

              The bulk of a nation’s assets being “sold” off by a handful of people… what could go wrong?

              Also, Life of Insects is a great fictional look at Russia in the immediate aftermath of the fall of the Soviet Union. Everyone should buy it right now.Report

  16. Avatar Oscar Gordon says:

    Stillwater: For example, there’s plenty of profit being realized in the economic landscape, but very little of it reaches wage earners (wage stagnation) or creates new demand for domestic white collar workers (OWS!) or etc. All the standard complaints.

    Question for those who may know:

    I get the feeling that this (the bit quoted above) is because the bulk of that money is busy chasing other money (i.e. being invested in financial products that are gambles on trends and other intangibles), instead of getting invested in endeavours that are more directly producing goods, services, and the related jobs?Report

    • Avatar Stillwater in reply to Oscar Gordon says:

      Oscar,

      Man have I gone round and round with folks on that topic. I, too, am interested in hearing what people have to say.Report

      • Avatar Oscar Gordon in reply to Stillwater says:

        If I’m right, then it’s understandable why all that wealth is not doing much “trickling down”. It’s like a thunderstorm, with lots of really impressive lightning & thunder, massive amounts of energy getting tossed around in spectacular displays, and everyone on the ground unable to tap into or use any of that energy. And when some does make it to the ground…Report

    • Avatar ACIS in reply to Oscar Gordon says:

      The answer is yes.Report

    • Avatar Joe Sal in reply to Oscar Gordon says:

      I’m not sure how well this defines the problem, but it’s a kick to watch.

      Report

    • Avatar Saul Degraw in reply to Oscar Gordon says:

      @oscar-gordon

      I think it is a combination of the two. I heard someone describe the 1970s and early 1980s as being a time poor in Capital but rich in ideas (the birth of Apple, Microsoft, and other electronic goodies like the Walkman, Compact Disc, early Internet, video game systems, etc.) But today is capital rich and idea poor.

      I am not completely against Tech 2.0 but I do wonder how most of these ideas scale beyond urban areas and I do think that there is something to the criticism that a lot of parts of the Tech 2.0/app economy are largely based on solving the social problems of usually childless 20 and 30-something middle-class and upper-middle class types.

      There are companies like Washio that do laundry service delivery and delivery companies for everything from prepared meals to booze and anything inbetween but how do these companies expand beyond urban markets? There also seem to be a rise of transportation companies that operate private buses which scream “You don’t have to commute with the plebs”

      IIRC I’ve read that lots of investment banks are starting to show concern that these are viable and profit generating businesses in the long run but there still seems to be plenty of cash to throw at them from Angel Investors and Accelerators.

      Tech 2.0/App Economy seems to be something that you really believe in or do not.Report

      • Avatar Oscar Gordon in reply to Saul Degraw says:

        I think the reasons for the explosion of Tech 2.0 is manifold.

        -Apps are easy to produce for little investment, small initial staffing, & potentially strong return.
        -Services are the same way, easy & inexpensive to start, good potential, low risk.
        -Production facilities (factories, etc.), even high tech ones that need a trained/educated workforce, require a significant capital outlay and considerable professional/technical/legal support to navigate the regulatory landscape. High cost, high risk, not as high of a return potential.

        This is one area (& I’ve said this before) where our regulatory environment fails, or at least shows that it is not smartly put together. From what I hear, building a new production facility, or even repurposing an existing facility, involves dealing with a lot of confusing, and often-times conflicting regulation, that no one seems interested in fixing (half don’t want to touch it out of fear, the other half just wants to burn it to the ground).

        So if my question to Stillwater is correct, and wealth is busy chasing other wealth in the financial clouds, instead of investing on the ground, I can completely understand why. Because we’ve made the ground a not terribly inviting place. If that is the case, we have three primary choices:

        1) Make the clouds less inviting
        2) Make the ground more inviting
        3) A smart combination of 1 & 2.Report

        • Avatar Saul Degraw in reply to Oscar Gordon says:

          There is only so much regulation you can do to make manufacturing less affordable but a factory is still going to cost a lot because that stuff is expensive. It is still going to cost hundreds of millions of dollars to produce a factory that makes Titanium Dioxide in reasonable quantities for example from what I’ve read as an example.

          I think the problem with talking about regulation is that there doesn’t seem to be a way to openly express that sometimes regulations do make things more burdensome or inefficient but the rewards for those regulations are worth it in terms of safe working environments and/or a clean environment or something less than is less capitalistically oriented.Report

          • Avatar Oscar Gordon in reply to Saul Degraw says:

            I’m not saying remove protections, I’m saying streamline & make consistent. This is something I harp on regularly. Regulation should be clear, consistent at all levels, and easy to navigate. If between federal, state, and local environmental laws, there is a conflict, or a very questionable or vague set of rules that appear in conflict or tension, it should not be on the citizen to try & thread that needle.

            But policy makers like regulations with lots of wiggle room, because it makes handling edge cases easier, and courts are not usually inclined to strike such things down. Which is good for the bureaucracy, but it makes things inefficient for businesses trying to get off the ground. Which is more important, making life easy for the bureaucracy, or giving business an efficient path to producing jobs & paying taxes?Report

        • Avatar LeeEsq in reply to Oscar Gordon says:

          @oscar-gordon I get what your saying but I’m not sure if streamlining the process of creating production facilities help. One reason why I think you have money chasing other money now rather than getting reinvested is that financiers and bankers have discovered ways to make more money by simply chasing other money. Investing in new businesses even for an established product with an obvious market is risky. It also requires a lot of patience. Most financiers and bankers seem to want instant gratification more than their past equivalents.

          Another problem is that there might be very few good ideas to invest in even if the process of creating production facilities was more streamlined. Even if you get rid of all the problems with investing in tangible things like goods, services, and related jobs than you might find there aren’t a lot of things to invest in still.Report

          • Avatar Oscar Gordon in reply to LeeEsq says:

            @leeesq

            That is part of making the financial cloud less inviting.Report

          • Avatar North in reply to LeeEsq says:

            We should also not understate the impact of the global economic slump on all of this. The recessions global character, the problems with Russia, the instabilities with the Euro, all of this together has triggered a huge global flight to the safety of the American dollar. Much of the planet’s wealth is crowded into this single currency and is casting about desperately for a way to try and at least cover their negative (effective) interest rate losses while they’re sitting here.Report

        • Avatar Stillwater in reply to Oscar Gordon says:

          Oscar,

          So if my question to Stillwater is correct, and wealth is busy chasing other wealth in the financial clouds, instead of investing on the ground, I can completely understand why.

          You might be right that the regulations are just too tight for building or repurposing and all that. I mean, there’s always something that will incentivize capital to move to a more “liberal” political environment. But really, the problem is in the theory. The idea is that capital accrues profits, which are in turn (because market forces and self-interest!) invested so’s to maximize yield. (Homo-econimicus!). Another tenet is that if there’s a labor force to exploit for gain (I mean that neutrally!) capital will employ those folks based on the presupposition that a glut in the labor market means folks can be employed at a rate lower than otherwise expected, making capital investment a merket-wise worthy venture. (Expected value!)

          But what we’re seeing is that US businesses are literally sitting on billions – trillions! – of dollars of cash and not investing it in domestic ventures. That is, the economic model that predicts capital will at least be incentivized to open employment opportunities for the unemployed (or underemployed) by taking advantage of the wage reduction isn’t bearing as much fruit as some of us would like. Instead of taking advantage of that labor surplus, capital is quite happy to leave their money in cash, or as invested as securities, or – as you say – “chase other money”. It’s not, as the theory promulgates, using that money in a productive capacity, if we define “productive” as actually creating jobs and economic opportunities for folks other than shareholders.Report

          • Avatar Oscar Gordon in reply to Stillwater says:

            @stillwater

            Which flows back to my original question of, “Why is capital not finding useful work building tangible things?” Sure it’s got a liberal outlet in the financial cloud (I’m sticking with this analogy), but there is money to be made investing in real things (besides real estate). I am willing to entertain the notion that it isn’t all, or even primarily, just cumbersome & inefficient regulation for tangible investments. And I know the financial cloud is not the free-for-all many imagine it is, although I’ll concede that the markets can move & innovate much faster than regulators can keep up, such that through hubris they can get in trouble.

            But are we so out of ideas that there is not much tangible worth investing in? I can’t believe that, I pay too much attention to emerging technologies to believe that.

            Or, are we just in a place where the economy is in something of a holding pattern, waiting for a set of technologies to mature to the point where they ripe for heavy investment?Report

            • Avatar Stillwater in reply to Oscar Gordon says:

              I think it’s that capital won’t invest in a geographical location unless the market (and let’s be honest here, in this age of free trade the deciding factor in what constitutes a favorable market is wages) opportunity analysis yields expected value. That takes the US right outa the equation, bro.

              To your more substantive point, I don’t think it’s a lack of imagination in creating new markets. I mean, what is “lack” measured against? It’s not like there are an infinite number of products that appeal to people, or that marketing alone will create one.

              But I wanna go back to the point I made above – that a surplus of cash, according to the model!, is looking for investment opportunities. If that were not only true (in some non-academic way) but also practicable, we wouldn’t be having this very discussion. But the fact is that the model, the economic theory!, just fails to account for these real world facts.

              And that’s the thing I’ve gone round and round with other folks about previously.Report

              • Avatar Oscar Gordon in reply to Stillwater says:

                @stillwater

                Which model are you talking about? Specifically? I feel like we are hitting the weeds here & I want to know if I need a map or a tour guide.Report

              • Avatar Stillwater in reply to Oscar Gordon says:

                Just the standard theory. The one I’ve argued about with James K, Simon K, J Hanley, Mark T, Jason K, … I mean, THE ONE THE FREE MARKET GUYS LIKE TO TALK ABOUT ALL THE TIME.

                Sorry.Report

              • Avatar Joe Sal in reply to Stillwater says:

                (and let’s be honest here, in this age of free trade the deciding factor in what constitutes a favorable market is wages)

                This. If the production costs of a foreign facility is 30-60% less, the facility here is pounding sand.Report

              • Avatar Jaybird in reply to Joe Sal says:

                As a person who found himself on the wrong side of the outsourcing craze (multiple times!), I find myself somewhat sympathetic to the thought “we could hire 10 people for what we pay this one American!” but I delight when I hear that servers have been down for a week.

                Of course, that also tells me that I probably wasn’t doing anything *THAT* important if it doesn’t matter if the server was down for a week…Report

      • Avatar Troublesome Frog in reply to Saul Degraw says:

        Saul Degraw:

        There are companies like Washio that do laundry service delivery and delivery companies for everything from prepared meals to booze and anything inbetween but how do these companies expand beyond urban markets?

        If we rephrase that as, “How do these companies expand beyond 81% of the population?” does the question sound as important?Report

    • Avatar j r in reply to Oscar Gordon says:

      I get the feeling that this (the bit quoted above) is because the bulk of that money is busy chasing other money (i.e. being invested in financial products that are gambles on trends and other intangibles), instead of getting invested in endeavours that are more directly producing goods, services, and the related jobs?

      If we are going to have a conversation about the relationship between the financial economy and the real economy, we should be precise in our language. So, if we say that the bulk of money deployed in financial transactions is “chasing other money,” what does that mean?

      If a company or an investor buys a stock or a bond, certainly he or she expects a return, but that money still goes towards some company’s capital needs (and by capital I mean investment in things and processes used to produce goods and services). Even financial products that are derivatives of other financial products have purposes beyond pure speculation. I work for a company that is heavily invested in the derivatives market. The purpose of those investments is not to make money on derivatives, rather it is to balance liabilities on the balance sheet with assets of differing tenor and interest rate structure.

      The majority of investments made in capital markets serve some specific purpose. Is there a lot of rent seeking and unnecessarily risky behavior in financial markets? Absolutely, but let’s talk about what that is specifically instead of making broad meaningless statements about how bankers suck.

      But what we’re seeing is that US businesses are literally sitting on billions – trillions! – of dollars of cash and not investing it in domestic ventures.

      Likewise, a statement like this is misleading. Companies don’t buy gold and bury cash in the backyard. They hold cash balances at banks or buy high quality liquid assets like treasury securities. This money isn’t out of the economy. Quite the contrary, banks take deposits and lend them out at a multiple and governments take the proceeds from bonds and buy things.

      If a company like Apple chooses to hold cash instead of investing in new products or improving existing processes, it’s because Apple does not believe that they can earn enough return from those activities to justify the risk of making the investment. This is a demand problem, not a supply problem.Report

      • Avatar Stillwater in reply to j r says:

        If we are going to have a conversation about the relationship between the financial economy and the real economy,

        Waitaminute! All the financial guys keep telling me that the financial economy is the real economy!Report

      • Avatar Chris in reply to j r says:

        Oh, an evaluative ontology.Report

      • Avatar Mike Schilling in reply to j r says:

        Umm, no. If you buy an existing share of a company’s stock, not a cent of what you paid goes to that company.Report

        • Avatar j r in reply to Mike Schilling says:

          Umm, no. If you buy an existing share of a company’s stock, not a cent of what you paid goes to that company.

          No. The payment goes to the guy who owned the stock before, who bought it from someone else, who bought it from someone else, who bought it from the company. So what?

          The point is that it represents an equity stake in the company that at one point the company sold for operating capital. A company’s market capital is directly related to its ability to exist as a going concern, employing people and providing goods and services to its customers.Report

          • Avatar Mike Schilling in reply to j r says:

            A share of stock is a (kind of) tangible thing, but it’s bought and sold purely as a bet on the difference between its present and current value. It’s not an investment in any of the company’s future activities. But profits made on those bets are tax-advantaged, because the sort of people who make lots of those bets have way more pull than the ones who work for wages.Report

            • Avatar Kolohe in reply to Mike Schilling says:

              Do dividends exist in your world? Also, why do you hate teachers and firefighters and their pensions?Report

              • Avatar Mike Schilling in reply to Kolohe says:

                With interest rates on savings being basically zero, you’re right that dividends might make a stock a more attractive investment. But you’re still buying a stock because sale price + accumulated dividends > purchase price. And the more you think it’s overvalued, the higher your risk that the dividend gets cut.

                And I have no problem with pension funds being given favorable tax treatment.Report

              • Avatar Kolohe in reply to Mike Schilling says:

                The other facet of where stocks are not quite a zero sum transaction is that the value – and liquidity – of the equity stake in a company provides a market signal to the credit market that facilitates a company’s ability to issue bonds, and *then* expand the company.Report

              • Avatar Mike Schilling in reply to Kolohe says:

                Sure, when you buy and sell stock, you’re helping to determine its price. So it totally makes sense that you only pay half the usual tax rate on your profit.Report

              • Avatar ScarletNumber in reply to Kolohe says:

                why do you hate … firefighters and their pensions?

                Because they are obscenely overpaid.Report

      • Avatar Oscar Gordon in reply to j r says:

        @j-r

        I’m not trying to be obtuse with the terminology, it’s not my field, so I don’t have a precise vocabulary yet (although I am trying!). For instance, this:

        If a company or an investor buys a stock or a bond … but that money still goes towards some company’s capital needs

        Seem wrong to me except at two times: the IPO, and times when a company trades it’s own stock for a profit. Trades between stock holders who are not the issuing company don’t affect capital needs directly (although the trading price may influence the ability to secure credit?).

        I’m not trying to say that money in the financial markets aren’t doing anything, only that investments don’t seem to be largely targeted at opportunities that generate jobs. So money is working for money’s sake (if that makes any sense to you).

        it’s because Apple does not believe that they can earn enough return from those activities to justify the risk of making the investment

        The why of this is what I am trying to learn. Why aren’t those tangible investments a good risk or potential return? Is it, as Stillwater suggests, because US wages are too high, or is it regulatory risk, some other risk I’m not aware of? Is this common, if maybe insider, knowledge? Can it be affected by policy? Etc.Report

        • Avatar j r in reply to Oscar Gordon says:

          @oscar-gordon

          For companies to be able to sell equity, there needs to be an equity market. If all stocks and bonds were “buy and hold” and could not be resold on an exchange or secondary bond market, then there would be a lot less people willing to buy securities in the first place. Whether that is a bug or a feature, I leave it to the individual to decide.

          As for why companies hold cash, the reasons are different. In Apple’s case, it’s because they are a tech company. An industrial company with that much cash would likely just give it back to shareholders in the form of dividends or a share buy back. As a tech company, Apple has to maintain the illusion that it is still in growth mode.Report

        • Any additional offering, not just an IPO, but otherwise exactly right.Report

        • Avatar Troublesome Frog in reply to Oscar Gordon says:

          … money in the financial markets …

          I think it’s important to remember that money doesn’t go “into” financial markets so much as “through” financial markets. If you use $10K to buy Apple stock, you might say you have $10K “in” the market, but what really happened is that you bought Apple stock and somebody else who needed $10K sold Apple stock and used that $10K for something else.

          I point this out because a lot of people seem to work with a model where money goes into a market and gets tied up and no longer used for something productive, and I think it’s because of the linguistic convention.Report

      • Avatar Road Scholar in reply to j r says:

        j r: If we are going to have a conversation about the relationship between the financial economy and the real economy, we should be precise in our language.

        The first and most important thing to keep in mind that the financial economy is, to the real economy, quite simply “Overhead”. Necessary, but ultimately just another cost to be minimized, the same way paying someone to clean the bathrooms in the factory is an overhead cost.Report

    • Avatar Road Scholar in reply to Oscar Gordon says:

      Oscar Gordon: I get the feeling that this (the bit quoted above) is because the bulk of that money is busy chasing other money (i.e. being invested in financial products that are gambles on trends and other intangibles), instead of getting invested in endeavours that are more directly producing goods, services, and the related jobs?

      Remember that Piketty guy. The one that was/is the darling of the left, and the scourge of the right, for his book about Capital eating all the gains and resulting in rising inequality? (I haven’t read it, so I have only a vague notion of his thesis to be honest.)

      Well there’s this wiz-kid, 26-year old, MIT economist who looked into it all more closely and worked out that in reality the returns to productive capital, defined as machinery, plant, tools, equipment, etc. have actually declined in parallel to the returns to labor over the same period. Where’s it going? Housing, real estate, basically the F.I.R.E. sector. In other words, rent to land and natural resources. An article in the Economist about his paper was actually entitled something like “Henry George Had a Point After All.”Report

  17. Avatar LeeEsq says:

    Stillwater: On the other hand, I think an argument can be made that the Law School Crisis (I love that phrase!) is indicative of, or evidence of, a certain type of problem we – as a nation! – are currently in the midst of. Namely, that as our cultural-expectation machine keeps clipping along and folks just keep getting smarter, with all the correlated expectations regarding what they want to do with their lives, the pressure imposed on our domestic economy to satisfy those expectations in terms of legitimate job opportunities increases. It’s what I’ll call “The Big Squeeze”, defined as “when the expectations of a labor force confront the market machinery from which those expectations arose”.

    @stillwater For a long time American kids were sold a type of social contract. If you study well and graduate from high school or college than a decent job with stability and benefits will be available upon graduation. This is getting less and less true. People expecting a decent job with only a high school degree were hit first. Now people who have graduated from college or graduate school are finding it more difficult to get a good middle-class job as well. Nobody really wants to change the narrative of the social contract because it would admit that the United States has class issues now and Americans never liked to admit this.Report

    • Avatar Stillwater in reply to LeeEsq says:

      Even worse, Lee, is that US kids will continue to be over educated relative to the meager offerings they’re presented with. They’ll just keep getting smarter and smarter, and settling for landscape jobs won’t quite cut it. I don’t think anyway.

      But … people are malleable, no? Maybe the libertarian free market dream will become amenable to folks. I mean, they just have to give up their desire to do something they think is worthwhile to accomplish a greater good!Report

      • Avatar Stillwater in reply to Stillwater says:

        Or be consistent with their “principles”.

        Ha!Report

      • Avatar Saul Degraw in reply to Stillwater says:

        I find it hard to imagine that if this current path continues that people will take out massive loans for a mere chance that their educations will lead to good jobs.

        Then again, if that is the only chance…..Report

        • Avatar Jaybird in reply to Saul Degraw says:

          Are we allowed to say “depends on the education” or should we assume that a degree in X should be indistinguishable from a degree in Y, as far as employers are concerned?Report

          • Avatar Stillwater in reply to Jaybird says:

            I think you’re reaching too far into a bag of tricks for it to matter.Report

          • Avatar Saul Degraw in reply to Jaybird says:

            It partially depends on the education but as more people rush into business and STEM or other degrees that are considered “safe” or “surer bets”, those fields will also suffer supply and demand problems and maybe you will see the rise of the contingent marketeer or the contingent accountant or engineer.Report

      • Avatar LeeEsq in reply to Stillwater says:

        Maybe the Republican war against education and secularism will come to fruition and we will end up with a less educated, more religious population that is content with its’ place in society. Probably not though.

        Saul is right to, too much education in STEM and other practical majors will create a surplus in those fields and cause more problems.

        What if Marx was right about capitalism but completely wrong about the solution?Report

  18. Avatar Michael Cain says:

    What? 150 comments and no one has blamed it on us Boomers yet?Report

  19. Avatar ScarletNumber says:

    Many middle and upper-middle class families would still probably rather send their progeny to law school over being a plumber even if you told them that the plumber has a much higher chance of earning a 6-figure salary (I don’t know if this is true or not, just using it as a hypothetical.)

    I would say this is almost entirely true.Report

  20. Avatar zic says:

    Given how shabby or infrastructure is here in the good ol’ US of A, this is just silly.

    If we wanted to bother to keep the place nice, there would be plenty of jobs.

    But we don’t. We’re happy with decaying bridges and public buildings and overcrowded transportation systems and gridlock, so long as our taxes remain low.Report

    • Avatar Michael Cain in reply to zic says:

      Given how shabby or infrastructure is here in the good ol’ US of A, this is just silly.

      There are days when I feel like I’m living in a different country. I’ve lived here for a bit over 25 years, and while things aren’t perfect, I’ve seen: a new airport, a new 120-mile light rail system well started, road system expansion and maintenance, flood control infrastructure, water storage and treatment facilities, new cleaner power plants (including wind farms and the transmission expansion to connect them to the grid), new sports stadiums all around, expansion of the fine art venues, school buildings largely caught up with student population growth…

      As I recall, when 60 MInutes did their infrastructure piece not too far back, almost every example was Rust Belt and old northeastern cities.Report

      • Avatar j r in reply to Michael Cain says:

        I feel you @michael-cain. The places that people feel are worth investing are plenty up to snuff . The problem is all the other places. And sure, someone could come along and spend a lot of money and employ a lot of people fixing those other places, but there’s no guarantee that investment would see any return. The problem with make work jobs is that sooner or later the money runs out. Then what?Report

      • Avatar Kim in reply to Michael Cain says:

        EPA is forcing us to fix our sewer system. So, um, yeah, there’s that.
        We have over 400 bridges within city limits, so um, steel used to be cheap, and we were a fun place to guinea pig new designs.Report