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Because traditional labor made up nearly all of the middle class jobs in 1967, when the US standard of living peaked.

What do you replace 100 million labor based jobs with? So far, spanning decades, there hasn't been a good answer to that question, and the middle class continues to erode year after year. So now here we sit with 14% U6 unemployment ('the new normal'), and a labor force participation rate that matches 35 or so years ago (before the full influx of women into the work force, so the current numbers are that much uglier).

I'll note that in the last several years, the radical majority of job creation has been both part-time and hospitality based (eg hotels and bars). Hospitality pays notoriously terrible wages for the average worker. That doesn't sound like a good future to me.

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>So now here we sit with 14% U6 unemployment ('the new normal'), and a labor force participation rate that matches 35 or so years ag

The other important statistic you're missing is that corporate profits are way up, even better than pre 2008 levels in fact. The question is why, if the economy is so bad that employment is perpetually depressed, how are corporate profits so high? The answer is that production is in fact back to where it used to be. But through automation and piling more work onto fewer people, corporations are reaping ever bigger profits at the expense of the rest of the economy.

In fact, the problem we're seeing is a prelude to the very future folks like kurzweli talk about: a future where human labor is obsolete in favor of automation. It's not that the future is necessarily one of destitution for the vast majority of humanity, its one where current thoughts on how to best distribute wealth will have to change. These really are easy problems to solve: some form of basic income. The hard question is how do we get from where we are to there without a very nasty revolution. One good step would be to simply mandate a reduced work-week. Full time becomes say 30 hours rather than 40. These sorts of steps are going to become necessary to maintain social stability as these trends towards fewer and fewer jobs increase.

Corporate profits are only way up for international corporations. That is to say, the S&P 500 and similar.

And they're up so far, because many areas of the world such as the BRIC nations, have seen a boom the last decade while America has not seen a real improvement in its situation. We're taking on water, while nations like Brazil, India, Russia, Canada, Australia and China have seen impressive gains (some of the gains are immense, as in China).

One reason labor in the US isn't do well, while corporate profits are booming, is because America's most successful corporations make most of their profits outside the US now. Companies like Apple and Microsoft hugely tilt the profit numbers, while earning very large portions of their profits from the global economy.

Some examples: Exxon gets 45% of its sales overseas; GE 54%; Ford 51%; IBM 64%; Boeing 41%; Intel 85%; McDonalds 66%; Nike 50%; Dow Chemical 67%

Sorry to chime in. But I do want to remind everyone that Federal Reserve System and other major central banks did print money like crazy since financial crisis in 2007. Perhaps Zero Hedge is a place to get some sense in that part. Maybe I'm wrong, but finance world is definitely a fundamental aspect we have to take into account when we want to talk about the future. When we have A, we tend to think we can achieve some dream with just A, however, usually there are B/C/D.. needed to actually make that dream come true. And at that point A might be not even a crucial driver. Just my 2 cents.

In the 1950s the financial sector amounted to around 2.5% of GDP. It now amounts to more than 8%, and more than 30% of corporate profits. Anyone who is an apologist for such an increase needs to be able to convincingly argue that this increase has been instrumental in increasing the U.S. standard of living in spite of labor's receiving a decreasing share of gains. I for one think it's rather easy to imagine finance and the American standard of living getting along just fine with finance capturing a mere 2.5%.

The question is whether this shift is a symptom or a cause: perhaps it's a symptom of a property of progress, whereby labor is becoming decreasingly remunerative, thereby forcing the best and the brightest into finance. The more cynical (and thus, to my mind at least, more likely) explanation is the pervasive, and plainly visible, influence that the financial sector has exercised on policy makers for the past half century, eventually leading to Wall Street's pull turning into an ever strengthening positive feedback loop, whereby savvy Ivy League-ers feel decreasingly adequate if they're not taking in seven figures within a decade of graduation.

And so instead of inspiring and setting wonderful examples for everyone else, America's most charismatic are busy cutting deals with each other and exploiting private information asymmetries.

Agreed. But more jobs are coming back to the US thanks to the systematically destruction of the value of the dollar vs other currencies. It is becoming cheaper to produce in the US. More jobs, but not more 'real' wage that is. The Yuan has moved up 32% since it low (when it was 'pegged' to the US dollar). The Euro is 'strong' again against the dollar as well despite all their problems.

You're making a very good point, one which I've been making for a long time. Chiming in as a Norwegian, we actually have much higher levels of automation than the United States does. This is a necessity, since salaries here are so high. But we also have (1) higher salaries for lower-skilled jobs and (2) a very strong social safety net which ensures that you will live a decent life even if you get long-term illness or are rendered obsolete.

It is my hypothesis that the Scandinavian social welfare model is a prequel to the way things need to be in the even more automated future: High taxation of high incomes, and either a very strong welfare system or negative taxation for low incomes / citizen's wage paid out to everyone regardless of income.

...when the US standard of living peaked.

The US standard of living peaked back when the bottom 10% didn't have a flush toilet, houses were half the size they are today, amenities like air conditioning and washer/dryers were uncommon and entire families shared a single car. Many medical problems were simply incurable, and many of the technologies that make our lives happier (modern media, online dating, video games) simply didn't exist.

You clearly aren't using "standard of living" in the same way as the rest of us.

What? You are clearly in denial or living in a bubble: US Census report shows entrenched poverty and declining living standards

"The report provides a snapshot of a society in immense crisis. Poverty is at a near-generation high of 15 percent, close to the high point since the 1965 War on Poverty, the 15.2 percent rate reached in 1983. According to Tuesday’s report, 46.5 million Americans, including 9.5 million families, live in poverty.

Some 20.4 million people live on an income less than 50 percent of the official poverty line, 7.1 million of these being children under 18. More than 48 million remain without health insurance.

More than 31 percent of the population experienced some period of impoverishment during the years 2009-2011. Median household income, at $51,017, was slightly lower than in 2011, and down by 8.3 percent from 2007. The number of people 65 and older living in poverty increased from 3.6 million to 3.9 million between 2011 and 2012."

http://www.wsws.org/en/articles/2013/09/18/cens-s18.html

The poverty line is a moving goalpost. People below the 2013 poverty line have more goods and services than the middle class of the 60's and 70's. The mean American with $0-5000 in income consumes $22.7k/year. The mean American in 1967 produced about the same amount (and therefore consumed at most that much, since consumption=production-investment).

ftp://ftp.bls.gov/pub/special.requests/ce/standard/2009/income.txt

http://research.stlouisfed.org/fred2/series/USARGDPC

This data actually wildly overstates the real consumption of people in 1967, since CPI is a gross overestimate of inflation.

If you believe living standards are declining, please list the set of goods and services that people had more of in 1967 than today. If you are correct, it shouldn't be hard - the answer should be most goods and services.

"People below the 2013 poverty line have more goods and services than the middle class of the 60's and 70's"

I agree they do. However, lots of people no longer have just the dad working. Mum needs to work as well just to get by. And those goods are created oversees and bought for much lower prices. And -last but not least- all those goods are purchased using debt much more than in the 60's/70's.

I find it shocking the US now has more people on foodstamps than people in fulltime jobs. The Bureau of Labor Statistics (BLS) reports there are 97,180,000 full time workers in the private sector. But there are 103.4 million people currently enrolled in any one of 15 subsidized federal food assistance programs. It saddens me to see this.

However, lots of people no longer have just the dad working. Mum needs to work as well just to get by.

Total hours worked/capita fluctuates and is down a little bit since 1970. There has been no upward trend. Mom works more but dad works less.

http://research.stlouisfed.org/fred2/series/USAAHWEP

http://research.stlouisfed.org/fred2/series/EMRATIO

http://research.stlouisfed.org/fredgraph.png?g=d5P

http://www.bls.gov/opub/mlr/2000/07/art3full.pdf

The poor specifically are huge beneficiaries of this trend, and work very little.

http://www.bls.gov/news.release/empsit.nr0.htm

In any case, I'm glad we are in agreement that adventured is wrong and standard of living has gone up.

Thank you for the good conversation, insights and links. You show me "Mom works more but dad works less". It leads me to wonder if Mom works more because dad works less? Full time jobs and Obamacare insurance perhaps?

"Bureau of Labor Statistics data show that the ratio of part-time to full-time jobs has completely flipped this year from historical trends. Last year, six full-time jobs were created for every one part time job. This year, only one full-time job is being created for every four new part-time jobs."

http://www.forbes.com/sites/gracemarieturner/2013/08/27/its-...

It's hard to make sense of all the data...

in 1967, when the US standard of living peaked

What's your metric for this?

The people who make that claim usually base it on average hourly earnings rates, inflation-adjusted, for some class of (male) workers.

On the other hand, if you look at "median household income", that's grown a fair bit since 1967. We have more dual-income families today where instead of one high-earning male and a housewife we have a couple who on average work maybe a little less and gets paid a little less as individuals than that single-earner male did, but their combined income is higher than the single-earner salary of old.

(We also have smaller households today than in the past due to higher divorce rates. And a lot more salary taken in the form of "benefits" which makes comparison of the raw dollar rate misleading.)

And yet the smartphone I have in my pocket would be worth billions back then. Even the poor today are much richer in many ways than the richest people alive in 1967.

That could be the plot of a great time travel movie!

Yes, but one cannot eat a smartpone. Poor families care more about things like healthy food, groceries and fuel. The sad part of this 'New Normal' is things like smartphones and TV's becoming cheaper and things a family can't live without are becoming more expensive. (Although I have to hand it to the US, they can export their inflation because of the reserve currency status).

Food is a lot cheaper now than it was then. As is clothing, especially at Walmart. If you look through an old Sears catalog the worker-hours needed to buy pretty much everything people buy has declined - all the stuff is cheaper, not just electronics. (Ikea helps too!)

Buying a house might be more expensive, but the average house is so much bigger and better today that it's hard to do a direct comparison.

How about measuring in household income per hour worked?

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