Job polarisation and the decline of middle-class workers’ wages
voxeu.org
voxeu.org
Most of the things I've read is that people have the 'wrong' skills, so if you have the 'correct' skills you are in a minority, sought after and can demand higher wages, if you have the 'wrong' skills you are competing with everyone else for anything available, which runs the gamut from 'no skills' to 'easily acquired quickly' skills.
An interesting question for me is how people change their skill sets over time. I am familiar with engineers who 'stopped learning' and when the industry had moved past the technologies they were skilled in, they became unemployed and stayed that way until they developed new skills. And in that vein it would be interesting to know what is the rate of change in demanded skills vs their time to acquire. We take kids out of high school and turn them into software engineers with fours years of engineering curriculum (which could easily be done in 2 years if you skipped all the general Ed classes. 128 units of which 64 are in your major? Seems like a testable hypothesis.) There are jobs where you need a Ph.D (or MD, or JD) so that skill set is takes a bit more than 2 years to acquire (6 - 8 depending).
I don't see skills as this thing you get between the ages of 18 and 22 and the forever and ever after you either use them or die. So I can't really agree with the premise that 'middle skill' job loss means anything.
Here's a scenario. Let's say that US loses it's energy supply (due to any fictional reason you can imagine). Who do you think is going to be in demand? No, no no kids...it's not going to be us programmers. The demand will be for the physically abled. The guys who can lift and ship without breaking too much sweat.
Different environment, different demands. We are just plain lucky to be in the workforce today and to have an interest (and aptitude) in tech stuff.
For society to function, everyone needs to have a reasonable chance at having the ability to live.
> Different environment, different demands. We are just
> plain lucky to be in the workforce today and to have an
> interest (and aptitude) in tech stuff.
I also find this bit: "Adapting to skills beyond your domain is really hard, especially when you are aging." really interesting. It's the difference between "hard" and "possible." I get that its hard to go back into learning mode, especially to recapture that ability to treat every new thing as a gem to be admired. But I have not found any evidence that it isn't possible. And being hard is not in and of itself a reason not to do something. Especially if doing this 'hard' thing can greatly enhance your ability to be productive in the new environment.
In your fictional scenario, I would totally start working on blacksmithing. They seemed to be the 'hackers' of their day. And I'd expect it to take several years before anyone would seriously considering using my services for anything other than basic stuff. Hard? Yes, but unless I had some damage to my rotator cuff or something I would think it was possible.
It would be naive of us to think that we will 'surely" adapt to new skills. Circumstances can mean that you just don't have the ability to do such things anymore.
Is it "possible"? sure. But is it going to suck the life out of you? Most likely. Upgrading skills takes time, effort and resources. Most people (even in America) don't have enough of each of those.
Look at all these students with $200k debt. They've basically imprisoned themselves for a long time. Even a job that pays $100k (-35% tax -30% living expenses) does not cut it. Acquiring new skills with negative equity makes it harder for most people.
> Look at all these students with $200k debt.
Is this actually true? Have there been many major advancements in math in the past 100 years?
Easily 80% of managers I've met/worked for have been decidedly low skill. Especially when compared with engineers, research scientists, programmers, designers, etc
Good management requires a vast amount of skill, whether that's technical or soft skills. Good managers keep you doing your work, and reduce your distractions without you even noticing.
Your statement should read, "Easily 80% of the managers I've met/worked for have been BAD". See the difference?
Fair enough on the rewording but I'd hardly call management high-skill labor akin to the examples I mentioned.
I probably shouldn't say its a low-skill or brainless job (in general... though I do often get that feeling from mangers), but I just personally never put it in the class of highly-skilled jobs.
Edit: I guess that I've always just placed it as more of a 'ladder climber' type of job than a highly skilled worker type of job. But to be totally fair that is likely due to my experiences. :)
Source: former software engineer turned manager. Never had to juggle so many wildly different skills in my life.
I agree with 80% being shit though. That was my motivation to go there in the first place.
The thing is, just like CS doesn't teach people to be good developers, no amount of management training teaches people to be good managers.
Also, a good percentage of the coders are pretty shit too. The networking possibilities of the internet have allowed us to isolate ourselves from that, so good developers are usually amongst themselves, be it on places like HN, or working for companies they already know have high standards.
I bet outside of out bubble, the 80% shit applies to many other professions, including our own.
The post WW2 area had less income inequality because the world economy had been torn apart.
We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.
But that angry failed artist came to power by blaming the disastrous economic conditions on a) the victorious powers of WWI for imposing crippling penalties upon Germany, b) the existing government and their predecessors for accepting and adhering to these conditions, and c) certain groups within Germany for "exploiting" the situation.
Regarding the difference between pre-WWI and Post-WWII income inequality it seems pretty disingenuous to claim (if you were) that the times (then and now) are similar in economic terms, not to mention quality of life. Between the 50s and 80s or so there was still great growth (for Americans at least) but much less income inequality. Some may argue that constituted a 'sweet spot' in terms of balancing growth with income inequality.
There is some interesting information at the below link regarding the time period following WWII
To boil down a lot of interesting reading (on a subject, which it is fair to say, generates a lot of controversy): income inequality produces social instability, primarily as a result of a lot of economically (and, by extension, sexually) disenfranchised young men.
I'm not touching the sexual part with a 10 foot pole cause it bears no relevance in my opinion either. But I do think that many young men are economically disenfranchised in The States.
Edit: In my comment any mention of 'men' should read "and women". I don't mean just males which is another reason I don't think it is important to address the sexual disenfranchisement part.
A quick google search suggests black men are less sexually disenfranchized than non-blacks.
http://www.thedailybeast.com/articles/2010/07/20/sex-statist...
It also isn't necessarily true that the change in the level of disenfranchisement is due to growth, or change in anything having to do with the economy, so much as due to changes brought on by the civil rights movements. Things can change on a societal level without being impacted by or impacting directly things at an economic level.
The social instability mentioned in the parent is still going on even with these advances. Just saying 'its better than it was' doesn't make it not a thing.
We are. That's a centerpiece to modern intersectional feminism: everyone's hurt to some degree by the structure of society. Men have it better in a lot of situations, but things are still rough.
Who is driving the Tea Party? I would contend economically disenfranchised (though, granted, not particularly young in a lot of cases) voters reacting to increasing economic polarization.
Do Tea Party rank-and-file see their grievances in those terms? Not when they're talking about guns rights and Obamacare perhaps. But get them talking about Wall Street and bank bailouts and it's a different story.
http://en.wikipedia.org/wiki/Ku_Klux_Klan#Contemporary_Klan:...
Regarding the debt ceiling, congress cannot threaten or cause default, since the executive branch has the power to prioritize debt payments. In any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
The parent didn't say that instability had increased, rather economic polarization had, but by what metric are you implying instability has decreased considering your above examples?
Klenwell said inequality is bad because it causes instability. That doesn't seem to be happening, so his theory seems to be wrong.
And to quote your prior post:
in any case, similar things happened in 1995, so no, I wouldn't categorize more of the same as an increase in instability.
So by your example, things that happened in 1995 are 'more of the same' but when presented with a counter example in the same time span (and even more recently) it shows that things have changed (reduced instability) because it has been a significant period of time? Check. That makes sense.
I'm checking out of this conversation. The contortions in your logic are just a bit too much for me. Carry on.
And this does not alarm you?
We destroyed wealth because of the world wars, which then caused "rising equality".
I do not believe the world wars happened due to inequality - so no, I'm not worried.
Regardless of how the Reich was built, or oriented politically, economic inequality (and nationalism) were a primary tool used to gain momentum.
You are totally correct that German leaders of business and holders of wealth were courted into the Reich. Many of them from Bayer to IG Farben benefited directly from the concentration camps.
If the economic suppression of Germany by the rest of Europe and the Great Depression hadn't happened (global income inequality, after a fashion), would WW2 have happened?
Do you not believe the earth is more than 4,000 years old and that we evolved from other forms of life eons ago as well?
Some things are already established as fact; not everything is an opinion, not all opinions are valid, and the ones you've stated are just flat-out contradictory with actual real data.
The amount of resources it takes to make someone happier is non linear, so maximizing total wealth is a poor way to measure the health of a society. Realistically Log(income) is probably a much better measure.
Granted, the economy is not a zero sum game. However, at a practical level simply accumulating wealth is often a zero or even negative sum game. EX: Spam, Pollution, etc.
Also, Log(consumption) is a much better measure than Log(income) - a 1000 dollar bill doesn't make you happy, it's the hookers and cocaine you buy with it that does.
Also, unspent wealth buys piece of mind which is can make you happy. AKA, I would much rather have 100,000$ in my bank account than 100$. Really log(income) still understates things as lifestyle changes more going from 20,000$ to 40,000$ income vs 20,000,000 income to 40,000,000 income.
PS: I think the amount of money entertainers can make is probably inherently detrimental to society. But, that's another debate entirely.
(Of course you are driving at something else, but the way you have phrased it completely ignores this little piece of reality)
Quality-of-life here is not defined by the ability buy iThings, flat-screens, and XBoxes, but affording decent education, health care, and a fair chance at upward social and economic mobility, regardless of where you come from.
http://obs.rc.fas.harvard.edu/chetty/mobility_trends.pdf
Does this mean inequality is not a problem?
http://economix.blogs.nytimes.com/2013/07/25/the-complex-sto...
The authors of the study you cite actually provided some input for that article.
Regarding education, the total "quantity" of education people are consuming seems like a meaningless metric. It says nothing about the distribution of high-quality educational opportunities to people on different ends of the income spectrum. The disparities in access to quality education in many cases are strongly correlated to the income distribution.
Measuring health outcomes is similarly more complex than the broad brush of "total health consumed" that you paint it with: http://www.nber.org/reporter/spring03/health.html http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1088996/
https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&...
What data (if any) would be sufficient to convince you that inequality is not a problem?
In general, poor populations have reduced access to high-quality care. While people with low incomes are more likely to be uninsured, income-related differences in quality of care that are independent of health insurance coverage have also been demonstrated (Brown, et al., 2003).
Also this metric has increased over the years:
People without a usual source of care who indicated a financial or insurance reason for not having a source of care.
What data (if any) would convince you that inequality is not a problem?
Other measures of the social ills correlated with being very poor? In cities, if you are also black or hispanic , a high chance of death by violence. A relatedly high rate of incarceration, often for nonviolent crimes. High rates of children in the foster system.
Just because the averages nationwide are slowly ticking up over time, does not mean that there are not significant populations slipping backwards.
In cities, if you are also black or hispanic , a high chance of death by violence.
Do you believe that if the 1% had less money, poor blacks/hispanics would be less likely to kill other poor blacks/hispanics? If not, this is irrelevant.
I haven't double checked this, but I strongly suspect that even as inequality has risen in the US, the rate of poor blacks being murdered has gone down. (Reason: poor blacks being murdered is a big chunk of the murder rate, and murders and other crime have generally gone down.)
It's up to you what you care about. Some people find the arguments in https://en.wikipedia.org/wiki/The_Spirit_Level:_Why_More_Equ... persuasive.
> The post WW2 area had less income inequality because the world economy had been torn apart.
If that was true, then as the economy recovered, income inequality would have increased. But it didn't, it continued to decrease in the USA and UK until about 1980, when it started rising again.
I feel that it is unlikely to be a coincidence that the trend changed around the same time Thatcher and Reagan were elected.
> We are now just going back to pre WW1 rates - ie basically reaching the point where we were before 2 world wars destroyed so much wealth.
There was a vast net increase in wealth between 1914 and 1945.
Too much poverty and everyone looses.
This is yet another sloppy, cut and paste job by Reuters of a single researcher's blog post based on his unpublished working paper. Not worth reading unless you have already read most of the academic research on the subject.
Lastly keep in mind nobody may know the answer to these important questions as the system is very complex and dynamic and the data we have is not very good.
Here's a variety of links to get started but you should dig into the references:
http://economics-exposed.com/how-arec/
https://en.wikipedia.org/wiki/Economic_inequality
http://www.equality-of-opportunity.org/
http://ntj.tax.org/wwtax/ntjrec.nsf/009a9a91c225e83d852567ed...
http://www.nytimes.com/2013/10/04/business/media/reuters-pla...
in all these articles/analysis replace the middle-skill jobs in manufacturing with the programming/IT jobs - the middle-skill jobs of today - and you'd hardly find any decline