Globalization did not hollow out the American middle class
noahpinion.blog
noahpinion.blog
I can say the sentiment comes from the people who USED to be middle class that are no longer.
The people who are middle class today are rarely the same people.
I saw this 10-20 years ago when economists were telling people that inflation is low despite their feelings about inflation. "Our math is correct and you ignorant folks should be grateful for how this economy is managed."
Just because you can produce equations like physicists doesn't mean it's the same field. Ground truth in economics is just as much people as it is anything else.
They felt well off, because they were doing fabulously well compared to the 30's which were still lived memory.
And because they felt secure. They did not feel in any danger of losing the essentials of housing, food, clothing and health care.
Now we have a lot more, but we've lost that feeling of security vis a vis housing & health care.
Kind of sums things up. Likely, we’ll never see that again. Not in my lifetime, anyway.
Also because they were doing well, compared to past experience, relative to those higher on the income distribution.
That is, inequality narrowed throughout the post-war era until around 1980, when it turned around and shot up.
https://fred.stlouisfed.org/series/SIPOVGINIUSA
While the long stagnant periods in wages (Noah marks the one from the mid 1970s to mid 1990s, but ignores the one from 2001 through about 2012, perhaps because he realizes that marking most of the last 50 years, accurately, as periods of wage stagnation, rather than falsely claiming that that ended in the 1990s, would undermine the rosy picture he is painting) are a problem, the distributional dynamics are probably the thing most closely associated with the perception of a hollowed out middle class.
In the 70's, only a large minority of Americans had a pension. There were lots of very poor old people in the US, especially before 1972 when social security got indexed to inflation.
How people feel matters, of course, but that doesn't mean that the numbers are wrong if they don't match. People's feelings about inflation are not ground truth about inflation, just ground truth about feelings.
It's one thing for their models to suck at fitting historical data or making bad predictions.
But I think your real beef is that their empirical statistics are touted as characterizing the middle class' lived experience, but don't?
When US americans got filthy rich, can the US americans that did not made it rich with the help of globalization complain that the world is taking advantage of them? Go fight your oligarchs, start a revolution.
This article ignores alienation, cost of living, social atomization, enshittification, the police state, and many other factors that contribute to everyone feeling like shit. The liberal intelligentsia need to learn that voters don't care about their numbers and charts, education has been hollowed out and the populace is going to respond to material promises and aggression. Not "hmm well did you consult my graph??"
As for working with hands rather then pushing numbers in spreadsheet, most people do not want to work as workers in factories - that is based on surveys. That includes tradesmen.
So why aren't they making bank in the trades? Why aren't they learning a craft? Why instead are they yelling that we should start digging coal again, an economically nonsensical thing to do? Nobody wants to buy coal, not even the people who happily buy oil and natural gas.
Welders make good money. Plumbers are essential workers who literally keep shit flowing. Parts of my family work in construction, forestry, trucking, general contracting, all classic machismo jobs that pay well for effort and experience. All essential industries. All in constant need of more workers.
The main problem seems to be that even the good "low education" jobs still require you to move to where people are. There are no jobs in dying towns because there is no economic activity in rural towns when the main income source is welfare.
1. Their dads tell them to go to college because trades are hard on your body. 2. For whatever reason, their kids end up really lazy. Doing drugs and trying to live life the easy way, ending up in their late 20s still living at home with their parents and not having any skills. 3. They join the trades but their coworkers are extremely toxic. Either always starting fights, being racist, shitting on apprentices. One guy told me a story of how a disgruntled coworker got kicked off a job site only to come back with his AR. Needless to say that guy has been trying to pivot into civil engineering instead of concrete work.
It's a bit of a rabbit hole to go into, but I think that the reason is that the idea of "every generation having a better life than the last" is easier said than done. Parents in the trades who want their kid to be white collar workers end up sorely disappointed when they don't give their kid any of the advantages that white collar worker parents did-- early childhood education, summer camps, SAT prep, etc. Or when their geographical location doesn't have decent white collar jobs. The kid ends up not prepared for either type of work.
If a lot of these jobs were better unionized (I know many already are), there would be no need to view them as "stepping stones" to a better life. You could have several generations all working the same trade, making good livings.
- Looking at income without looking at working hours can mask the fact that working more hours looks like income growth at the expense of quality of life.
- where is this money going? Housing spending apparently has not grown, but are these same workers building equity or renting?
- what amount of income is spent on healthcare vs 50 years ago?
- Other quality of life factors? What are low income workers actually getting with their increased wages?
- Is the way with which we characterize inflation giving an incomplete picture of the experience of all income classes (the rich and the poor don't buy the same things, and prices don't shift evenly)
hours worked has gone down in the US in the past few decades, not up.
When the Obama administration didn’t respond to China dumping below-cost solar on the US, I know many technologists who lost their job and career in the US because they couldn’t compete with companies that didn’t have to follow environmental protection rules.
Americans are addicted to artificially low prices that put the burden of costs on future generations who have to clean up a huge mess.
The hollowing out of the middle class means most Americans are forcibly dependent on the cheapest possible goods because they don't have disposable income.
It's a vicious cycle and the average consumer is not at fault. Most people would like to buy domestically, but domestic goods are either simply not available or not affordable.
Poor people are not necessarily the ones to make those choices. In fact, sometimes you find out that they are actually poorer than they would be if they would optimise their choices for their own financial benefits. If you look at who's buying expensive local food at your farmer's market it's unlikely to be dominated by rich people. If you go to some discount supermarket, you will most likely find a lot more well-off people, proportionally. Lidl is a supermarket chain that has terrible consequences, from treating their own employees badly to putting extreme pressure on the suppliers and its whole reason for existing is cheaper prices. Their biggest customer demographic is rich boomer.
There was always this doublespeak that came to trade deals where they say "globalization is inevitable and uncontrollable and therefore we must make these trade deals to facilitate and guide it to be good."
Of course if it's an inevitable force of nature then it does not need to be facilitated by nor can it be controlled by trade deals. There's no enabling legislation for gravity.
What should other countries do against VC tech dumping?
By your logic, Tesla (equally dependent on Chinese pollution and mining) wouldn't employ any technologists.
In fact, if we paid more for everything except imports, GDP would grow and it would look like we weren't importing as much. If we paid less for imports over the years, and then used them to generate a lot more money (e.g. a computer), it would look like imports were of shrinking importance.
With wages, the OECD definition of "Disposable Household Income"[2] is all income minus taxes, mandatory contributions, and interest on loans. So what isn't excluded? Rent. Childcare. Healthcare. Things that have dramatically increased in price (and also increased GDP).
We can measure everything in dollars, but that doesn't mean that the goods and services represented by those dollars are fungible.
1: Table 3 of https://www.bea.gov/sites/default/files/2025-03/gdp4q24-3rd.... 2: https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
Basically, we mortgaged our future for cash today.
Won’t happen. 1) We don’t think like that as a nation and probably never will again. 2) in order for us to reindustrialize, we would have to have significant purchasers from outside our own economy, which means someone else would be the first world nation and we’d be the third-world nation. The people with money and power in this country are incapable of considering this or are so supremely afraid of this, the will precipitate action to prevent it; namely war.
Which is great for reindustrialization, provided anyone with brains, tools and resources survives on an irradiated planet.
These are the same companies that are going to quickly identify suppliers and redirect operations to other countries that don’t have massive tarriffs. The same way large American companies adapted to globalization and the pandemic, you’re going to see a quick rapid adaptation where American goods are made in other countries faster than anyone thought possible.
One thing which can't be captured by these numbers (no matter how accurate) is when people end up settling for something perceived to be of lower value. So for instance, it might be that my income has gone up faster than the cost of the things I'm buying, but I'd rather buy a house (out of reach) than buy rent.
This is always going to happen so long as wealth inequality isn't addressed.
we can't possibly compete with (much) cheaper overseas labor, tariffs will do nothing but exclude the US from this cheap labor while other countries continue to benefit from it
eventually more of it will be automated anyway, and areas that saw booms from cheap labor will face similar class crises
there's also this idea that maybe our standard of living needs to regress some ("2 dolls instead of 30"), but you're insane if you believe that this can happen without significant strife and political upheavals... we're already at a point where many young americans feel as though they'll never be able to buy a house
the only "clean" path I can see out of this is some form of universal basic income, which likely has many problems to figure out, but at least doesn't treat humans like fuel for operating machinery
2) Working at assemblying cheap shit is bottom of the barrel work that people only do when they are desperate. It's either work or starve. It's why those jobs are outsourced to where labor is extremely cheap.
I am not from the US, but I read these posts with some mild amusement, because there is poetry that I am unable to capture.
Like, the goal of most countries is escaping the middle income trap and becoming advanced economies, and now people in the richest, most advanced economy there is want a regression to have assembly sweatshops instead of an advanced economy based on services and finance.
The funny part is that people that advocate for that wouldn't want in a million years to work in an assembly sweatshop. They count that someone else will do the job. Maybe immigrants, before they are deported to some concentration camp in Central America.
What do you think happens when China and other countries lose manufacturing capacity to US re-shoring... they will seek to regain elsewhere. Guess where most of the raw materials for electronics come from... it's not the US. This can't be redistributed.
Manufacturing reshoring is not an answer, it's a delay. You spend tons of capital getting it back and then it dies in 10 years anyway.
Simultaneously, everyone in charge thinks the US population needs to increase. It doesn't math out.
Of course they do. With less people the pool of available workers is reduced, and this gives labor an edge.
Those in charge thinks that this is very icky. They would rather keeping the underclass desperate enough.
You assume that salary of people involved in putting the speaker together (or more likely robotic automatization) would amount to 2$ per speaker?
TLDR Inflation does not exist.