Posts Tagged ‘working-class’

mortality

We don’t need Louisiana Detective Rodie Sanchez coming out of retirement to solve the crime against the members of the working-class currently being committed in the United States.

We already know many of the details of the crime. We also know the identities of both the victims and the serial killer. The only real mystery is, what’s the country going to do about it?

The investigation itself is being painstakingly carried out by Anne Case and Agnus Deaton (pdf). They show, with abundant statistics, that mortality trends in the United States run counter to those in other rich countries, where they have been steadily declining for decades.

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The headlines, of course, have been about one group—middle-age white non-Hispanics with a high-school degree or less—whose mortality rates, especially those attributed to “deaths of despair” (drug overdoses, suicides, and alcohol-related liver mortality), increased from 1998 through 2015.* The focus in on that group for a number of reasons, including the fact that increasing rates for them (as against blacks and nonwhite Hispanics) have all but erased the racial gap in mortality among non-college-educated Americans—and, of course, because of the prominence of “white working-class” voters in explanations of Donald Trump’s electoral victory.

But we also need to go beyond the headlines and understand that, while rates for different ethnic and racial groups in the United States have moved in opposite directions in recent decades, the rates for working-class blacks and Hispanics are still very high—and, in recent years (as can be seen, in the case of blacks, in the chart at the top of the post), they’ve also begun to rise.

That’s the real crime story. All three groups within the American working-class—whites, blacks, and Hispanics—are being killed at abnormally high rates compared to the populations of other rich countries.

And the serial killer? Case and Deaton have a much more difficult time working in this area. That’s because they follow the headlines and emphasize the differences in the long-term trend rates and lose sight of the larger picture. So, they discount the role played by income inequality and, instead, endorse Charles Murray’s story about the decline in traditional American virtues among working-class whites (which I wrote about back in 2012).

The fact is, the labor-market factors identified by Case and Deaton—which have negatively affected whites, blacks, and Hispanics with a high-school degree or less—have become more severe as inequality has soared and the social safety net ripped apart in the United States from the early 1970s onward. The upward trend for whites and the narrowing of the racial gap, as significant as they are, shouldn’t hide from view the more general problem (as I wrote about in 2015) of a large and growing gap between the life expectancies (for both men and women) of those at the top and bottom of the distribution of income in the United States.

American TV is currently captivating viewers with stories of people accused of committing horrific acts. It’s time, however, to focus on the story of an economic system that has created its own killing fields.

 

*Mortality increases for whites in midlife have also been paralleled by morbidity increases, including deteriorations in self-reported physical and mental health, and rising reports of chronic pain.

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Banksy, “Untitled” (2009)

 

On first glance, liberals and conservatives agree on very little these days, especially now that we find ourselves in the era of Donald Trump. But they do seem to find common ground on one thing: the so-called dignity of labor.

Let me explain. In the article I referred to yesterday, conservative Arthur Brooks invokes the “dignity of labor” as the reason anything and everything should be done to stem the fall in the labor-force participation rate of white men and get them back to work.

If its goal is to instill dignity, the U.S. government does not need to find more innovative ways to “help” people; rather, it must find better ways to make them more necessary. The question for leaders, no matter where they sit on the political spectrum, must be, Does this policy make people more or less needed—in their families, their communities, and the broader economy?

Some may ask whether making people necessary is an appropriate role for government. The answer is yes: indeed, it represents a catastrophic failure of government that millions of Americans depend on the state instead of creating value for themselves and others. However, it’s not enough to merely make people feel that they are needed; they must become more authentically, objectively necessary.

The single most important part of a “neededness agenda” is putting more people to work.

Well, as it turns out, one of Brooks’s liberal critics, Lane Kenworthy, actually agrees that working for someone else and producing more than one needs has “significant virtues”:*

It imposes regularity and discipline on people’s lives. It can be a source o mental stimulation. It helps to fulfill the widespread desire to contribute to, and be integrated in, the larger society. It shapes identity and can boost self-­esteem. With neighborhood and family ties weakening, the office or factory can be a key site of social interaction. Lack of employment tends to be associated with feelings of social exclusion, discouragement, boredom, and unhappiness. Societies also need a significant majority of people in paid work to help fund government programs.

No matter the fundamental differences in the policies they advocate, Brooks and Kenworthy are in fundamental agreement that people should believe in the dignity of work and government policy should be redesigned to make sure people—especially the members of the white working-class—get back to work.

I have already dealt numerous times (e.g, here, here, and here) with the argument that participating in wage-labor is intrinsically dignified. But the question remains, why should the government be brought in—in the eyes of by both conservatives and liberals—to make sure people are forced to have the freedom to acquire that dignity?

The answer actually lies in an unexpected source. According to Friedrich Nietzsche (in his 1871 preface to an unwritten book, “The Greek State”), the dignity of labor was invented as one of the “needy products of slavedom hiding itself from itself.” That’s because, in Nietzsche’s view (following the Greeks), labor is only a “painful means” for existence and existence (as against art) has no value in itself. Therefore, “labour is a disgrace.”

Accordingly we must accept this cruel sounding truth, that slavery is of the essence of Culture; a truth of course, which leaves no doubt as to the absolute value of Existence.  This truth is the vulture, that gnaws at the liver of the Promethean promoter of Culture.  The misery of toiling men must still increase in order to make the production of the world of art possible to a small number of Olympian men.

And if slaves—or, today, wage-workers—no longer believe in the “dignity of labour,” it falls to the likes of both conservatives and liberals to ignore the “disgraced disgrace” of labor and create the necessary “conceptual hallucinations.”And then, on that basis, to suggest the appropriate government policies such that the “enormous majority [will], in the service of a minority be slavishly subjected to life’s struggle, to a greater degree than their own wants necessitate.”

Nietzsche believed that, in the modern world, the so-called dignity of labor was one of the “transparent lies recognizable to every one of deeper insight.” Apparently, neither Brooks nor Kenworthy can count himself among those with such insight.

 

*This is even after Kenworthy admits “employment is not always a good thing.”

The need for a paycheck can trap people in careers that divert them from more productive or rewarding pursuits. Paid work can be physically or emotionally stressful. It can be monotonous, boring, alienating. Some jobs require a degree of indiference, meanness, or dishonesty toward customers or subordinates that eats away at one’s humanity. And work can interfere with family life.

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No one ever accused American conservatives of being particularly original. They started with a story about the failure of government programs and they stick with it, against all evidence.

Originally, conservatives targeted African Americans, who (so the story goes, e.g., in the Moynihan Report) were mired in a culture of poverty and increasingly dependent on government hand-outs. In order for blacks to regain America’s founding virtues (so the story continues)—especially marriage and industriousness—well-meaning but ultimately destructive government programs should be abolished so that they would once again be able to enjoy the security of marriage and dignity of work.

That exact same story has now been transferred to the white working-class. Anyone who’s read Charles Murray and J. D. Vance will recognize the “the pejorative Moynihan report on the black family in white face.”

The latest version of that story was penned by the American Enterprise Institute’s Arthur Brooks, who cites Lyndon Johnson’s War on Poverty as the original sin, which “deprived generations of Americans of their fundamental sense of dignity.” According to Brooks, “rural and exurban whites” have been left behind “every bit as much as the urban poor” because they’ve come to “depend on the state instead of creating value for themselves and others.” Real dignity, argues Brooks (echoing a long line of conservative thinkers), stems from people being “authentically, objectively necessary.” And that means working—or at least looking for work.

That’s why Brooks cites the declining labor-force participation rate in the United States beginning with the War on Poverty.

The first problem is, the participation rate has been declining since the mid-1950s, long before Johnson’s program was enacted. As readers can see in the chart at the top of the post, the labor-force participation rate for white men (the red line), which stood at 87.4 percent in 1955, had fallen to 84.2 percent by 1964 and then dropped to 76.6 percent in 2007 (on the eve of the latest crash). If we calculate the change by decades, it dropped by 3.2 percent points in the first decade and then by less then 2 percent points in each succeeding decade.

It makes as much sense to blame the declining labor-force participation rate on Chuck Berry as the War on Poverty.

But notice also that, from the mid-1950s onward, the labor-force participation rate of white women soared—beginning at 33.4 percent (in 1955), rising to 37.3 percent (in 1964), and peaking at 60.2 percent (in 2007). In the terms set forth by Brooks, that increase in dignity more than makes up for the falling rate for men. And much of the increase for women comes after the War on Poverty is enacted.

Instead of mourning the fall in men’s participation, why isn’t the increase for women deemed a great success by Brooks and other conservatives?

The only possible answer is American conservatives hold a nostalgia—an extremely selective nostalgia—for a particular moment in U.S. history. They envision a white working-class made up of men most of whom are forced to have the freedom to sell their ability to work outside the home, with wives who for the most part stay at home, care for their husbands, and raise future workers. At the same time, conservatives forget about the unions that made it possible for workers to earn a family wage—not to mention the Jim Crow laws and bracero programs that created barriers for black and Hispanic workers to compete for the jobs white working-class men were able to find.

So, no, there never was a Garden of Eden—and, thus, no original sin.

wage share

It’s obvious to anyone who looks at the numbers that the wage share of national income is historically low. And it’s been falling for decades now, since 1970.

Before that, during the short Golden Age of U.S. capitalism, the presumption was that the share of national income going to labor was and would remain relatively stable, hovering around 50 percent. But then it started to fall, and now (as of 2015) stands at 43 percent.

That’s a precipitous drop for a supposedly stable share of the total amount produced by workers, especially as productivity rose dramatically during that same period.

The question is, what has caused that decline in the labor share?

The latest story proffered by mainstream economists (such as David Autor and his coauthors) has to do with “superstar” firms:

From manufacturing to retailing, giant companies have managed to gobble up a larger and larger share of the market.

While such concentration has resulted in enormous profits for investors and owners of behemoths like Facebook, Google and Amazon, this type of “winner take most” competition may not be so good for workers as a whole. Over the last 30 years, their share of the total income kitty has been eroding. And the industries where concentration is the greatest is where labor’s share has dropped the most. . .

Think about the retail sector, where mom-and-pop stores once crowded the landscape. Now it is dominated by a handful of giants like Walmart, Target and Costco.

It is true, industry concentration has increased dramatically in recent decades (as I explain here). And the wage share has declined (as illustrated in the chart above).

Here’s the problem: exactly the opposite argument is the one that prevailed in the United States for the earlier period. Economists at the time argued that American workers earned a relatively high share of national income because they worked in concentrated industries, such as cars and steel. Thus, their collectively bargained wages included a portion of the “monopoly rents” captured by the firms within those industries.

Now that the wage share has clearly fallen, and shows no signs of returning to its previous levels, economists have changed their story. In their view, market concentration leads to a lower, not higher, wage share.

Why has there been such an about-face in economists’ story about the causes of the declining wage share?

What all the existing stories share is that they avoid identifying anything that has been done to workers as a class. Whether the story is about technological change, globalization, or now superstar firms, the idea is that there are larger forces that unwittingly have created winners and losers—and the losers, if they want, need to acquire the education and skills to join the winners. But don’t touch the basic elements of the economic system that has created such disparate and divergent outcomes.

As it turns out, the presumed rule of a stable wage share turns out to have been an illusion, an exceptional period of relatively short duration during which workers’ wages did in fact rise along with productivity. That wasn’t the case before, and it hasn’t been true since.

The actual rule, as it turns out, is that the wage share falls, as the rate of exploitation increases. That’s how capitalism works, at least much of the time—through periods of faster and slower technological change, higher or lower levels of globalization, more or less concentrated industries.

Sure, under a particular set of postwar conditions in the United States, for two and a half decades or so, the wage share remained relatively stable (and not without pitched battles between capital and labor, as Richard McIntyre and Michael Hillard have shown). But that ended decades ago, and since then workers have been forced to have the freedom to sell their ability to work under conditions that, even as productivity continued to grow, the wage share itself declined.

Mainstream economists have finally recognized the fact that workers’ share of national income has been failing. But they continue to formulate stories that deflect attention from the real problem, the relative immiseration of workers that has them falling further and further behind.

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Now that President Trump has begun carrying out his campaign pledges to undo America’s trade ties, formally withdrawing the United States from the Trans-Pacific Partnership and announcing he will start to renegotiate the North American Free Trade Agreement, it’s time to analyze what this means.

As it turns out, I’d already started to do this before the election, with a series of posts (e.g., here, here, here, and here) on Trump and the mounting criticism of the trade agreements the United States had signed (such as NAFTA) or was in the process of negotiating (the TPP).

It’s clear Trump’s decisions—which he claims are a “Great thing for the American worker”—challenge the view of economic and political elites, as well as those of mainstream economists (such as Brad DeLong), in the United States and around the world that everyone benefits from free trade.*

But, we now know, there has also been a growing counter-narrative, that not everyone has gained from growing international trade and trade agreements, which have generated  unequal benefits and costs. What’s interesting about this alternative story, at least when it comes to NAFTA, is that critics on each side argue the other side is the one that has benefited: U.S. critics that Mexico has gained, and just the opposite in Mexico, that the United States has captured the lion’s share of the benefits from NAFTA.

Here’s the problem: workers on both sides of the border have lost out, and their losses are mostly not due to NAFTA.

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We know, for example, that the wage share of national income in the United States has in fact declined after NAFTA was implemented (in January 1994)—from 45.1 percent of gross domestic income to 42.9 percent. But we also have to recognize workers have been losing out since at least 1970, when the wage share stood at 51.5 percent.

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Much the same has been happening in Mexico, where (according to the research of Norma Samaniego Breach [pdf]), the wage share (the dark green line in the chart above) has been falling since 1978—and continued to fall after NAFTA was put into place. And, as Alice Krozera, Juan Carlos Moreno Brid, and Juan Cristóbal Rubio Badan have shown, economic and political elites in Mexico, much like their U.S. counterparts, have mostly ignored the problem of inequality and resisted efforts to raise the minimum wage and workers’ share of national income.

The fact is, while NAFTA did propel a large increase in trade between Mexico and the United States, it “did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters” (according to a 2015 study commissioned by the Congressional Research Service [pdf]).

The bottom line is, eliminating or renegotiating NAFTA—including in the manner Trump is proposing—is not going to help the working-classes in either Mexico or the United States. It is merely a diversion from the real changes that need to be made, to which the political and economic elites as well as mainstream economists in both countries stand opposed.

 

*The only real debate within mainstream economics is between neoclassical economists who argue free trade generates the most efficient outcomes, within and between countries (regardless of whether countries run trade surpluses or deficits), and their critics (such as Jared Bernstein) who argue that trade deficits lead to a loss of jobs (e.g., in U.S. manufacturing), and thus require interventions of the sort Trump is proposing to change the pattern of international trade.

access

The American Dream has all but collapsed under the weight of growing inequality. It’s becoming increasingly difficult for the American working-class to sustain a decent standard of living, and their children are increasingly unlikely to be better off than they are.

But those who hang on to the American Dream—or at least the selling of that dream to others—believe that sending young people to the nation’s colleges and universities is the solution.

The problem, of course, is that even as enrollment in higher education has grown so has income inequality—and, with it, access to college remains profoundly unequal. The United States is therefore moving further and further away from being able to fulfill the American Dream.

According to a new study by Raj Chetty and the rest of the Equality of Opportunity Project team, while the number of children from low-income families attending college rose rapidly over the 2000s—both in absolute numbers and as a share of total college enrollment—the share of students from bottom-quintile families at four-year colleges and selective schools did not change significantly over the 2000s. Even at the Ivy-Plus colleges, which enacted substantial tuition reductions and other outreach policies during this period, the fraction of students from lower quintiles of the parent income distribution did not increase significantly.* They enroll more students from families in the top 1 percent of the income distribution (14.5 percent) than the bottom half of the income distribution (13.5 percent). And only 3.8 percent of students come from the bottom 20 percent of the income distribution.**

Even at the institutions of higher education with the highest mobility rates (with a high fraction of its students who come from the bottom quintile of the income distribution and end up in the top quintile)—for instance, SUNY-Stony Brook and Glendale Community College—the fraction of students from low-income families fell sharply over the 2000s. As a result, the average student from a low-income family now attends a college with lower success rates than in 2000. In short, the colleges that may have offered many low-income students pathways to success are becoming less accessible to them.

parental-income

As it turns out, the degree of income segregation across colleges is comparable to income segregation across census tracts in the average American city.

Contrary to the common perception that children interact with a more socioeconomically diverse group of peers when they reach college, colleges in America are just as segregated as the neighborhoods in which children grow up.

Now, it is true: the United States still has a large number of great working-class colleges. For example,

At City College, in Manhattan, 76 percent of students who enrolled in the late 1990s and came from families in the bottom fifth of the income distribution have ended up in the top three-fifths of the distribution. These students entered college poor. They left on their way to the middle class and often the upper middle class.

In fact,

the City University of New York system propelled almost six times as many low-income students into the middle class and beyond as all eight Ivy League campuses, plus Duke, M.I.T., Stanford and Chicago, combined.

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The problem is, the share of low-income students at at many public colleges has fallen over the last 15 years as state funding has plummeted. Working-class students, who remain shut out of the nation’s elite colleges and universities, are finding it increasingly hard to attend and complete their degrees at public institutions.

What we’re left with then is a system of higher education that, outside the elite schools, is not flush with cash and, as a result, is leaving “our young and beautiful students” with less and less access to a high-quality college or university education.

That’s why, continuing to promise the American Dream to the children of the working-class is the real American carnage.

 

*Ivy-Plus colleges include the eight Ivy League colleges (Brown, Columbia, Cornell, Dartmouth, Harvard, the University of Pennsylvania, Princeton, and Yale), the University of Chicago, Stanford University, the Massachusetts Institute of Technology, and Duke.

**At the University of Notre Dame, where I teach, 15.4 percent of students (for the 1991 cohort, approximately the class of 2013) had parents in the top 1 percent, while only 10 percent came from families in the bottom three quintiles.

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Last year, as I reported the other day, I published over 800 new posts.

I’ve never done this before. However, I decided to look back over the year and choose one post for each month of 2016:

January—Liberal ideology

February—Who are the capitalists?

March—Yea, they’re angry!

April—Life among the liberal econ

May—Letting capitalism off the hook

June—Globalization, inequality, and imperialism

July—Trump and the Prosperity Gospel

August—The Mandibles and dystopian finance fiction

September—What about the white working-class?

October—Nobel economics—or why does capital hire labor?

November—Condition of the working-class in the United States

December—China syndrome

Enjoy!