US Economy

[leftyjace]

Even the most optimistic economists are predicting massive job insecurity like we've never experienced going forward. Their outcomes just boil down to productivity increases adding growth(that's the good part I guess), income inequality continues to extend(the amount of people living in hardcore slums in the world such as Dharavi are expected to double in a few decades to 2 billion or so), globalization ramps up Mach-a-million more, people constantly entering and leaving the workforce to go train and re-train at schools, stress and anxiety pressures mount to levels we've never seen - that's literally their best case scenario in all the books that I've read.

Which books?

 

[Duck Rodgers]

Which books?

Saving Capitalism from the Capitalists- Raghuram Rajan
Sonic Boom - Greg Easterbrook

Are two I've read recently.

 

[Deleted member 365]

Link?

https://davidcard.berkeley.edu/papers/skill-tech-change.pdf

The recent rise in wage inequality is usually attributed to skill-biased
technical change (SBTC), associated with new computer technologies.
We review the evidence for this hypothesis, focusing on the implications of SBTC for overall wage inequality and for changes in wage
differentials between groups. A key problem for the SBTC hypothesis
is that wage inequality stabilized in the 1990s despite continuing advances in computer technology; SBTC also fails to explain the evolution of other dimensions of wage inequality, including the gender
and racial wage gaps and the age gradient in the return to education.

and

While none of the available indicators of technological change is ideal,
all of the indicators suggest that IT-related technological change has been
going on since at least the 1970s and has continued throughout the 1980s
and 1990s. Moreover, there is some evidence (based on the size of the IT
sector, the pace of innovations associated with the Internet, and aggregate
productivity growth) that the rate of technological change accelerated in
the 1990s, relative to the 1980s. As we discuss later, this argument is
potentially important, since most of the rise in wage inequality over the
past 2 decades was concentrated in the period from 1980 to 1986.

This might be more clearer:

https://www.nytexaminer.com/2013/01/an-inequality-debate-heats-up/

In fact—and now look back at the other lines in the figure above—according to Larry’s data, the low wage share of jobs has been pretty constant, maybe drifting up a bit, while the 50/10 wage ratio jumped sharply in the 1980s and stabilized, and high-wages (not shown) just keep climbing, breaking away from the pack. Meanwhile, mid-level jobs have been drifting down steadily for decades.

So, Autor’s SBTC explanation looks limited at best (more detailed work by Mishel et al find little support for it at all). Which raises a few important questions: First, if it’s not SBTC, then what is driving wage inequality, and second, does it really matter who’s right?

and

The change came around 1978, Mishel said, when politicians from both parties began to think of America as a nation of consumers, not of workers. President Jimmy Carter deregulated the airline, trucking and railroad industries in order to help lower consumer prices. Congress chose to ignore organized labor’s call for laws strengthening union protections. Ever since, Mishel said, each administration and Congress have made choices — expanding trade, deregulating finance and weakening welfare [and ignoring the minimum wage and the absence of full employment!!—JB] — that helped the rich and hurt everyone else. Inequality didn’t just happen, Mishel argued. The government created it.

The nail in the coffin is that since the 1970s, Europe's has become more egalitarian and wealth distributed (more) evenly while we have moved in the opposite direction. If technology has an adverse effect upon the middle-class then why hasn't Europe trended in the same way we have? Why hasn't the technology there killed jobs and redistributed wealth as it has here?

 

[franklin]

Good post, thriller.

A couple things. First, I have a hard time taking any economist who thinks theres growing gender inequality serious, unless they're talking about women getting richer than men.

since most of the rise in wage inequality over the
past 2 decades was concentrated in the period from 1980 to 1986.

The very same years Ronald Reagan raised social security on the middle class six times but not on the rich, then spent that and more into the pockets of the rich. Social security is the biggest wealth transfer scheme ever, but voters are too dumb to understand that money is fungible, so we vote benefits into our pockets while protecting the pockets of the rich where the money ultimately ends up.

Ending the growing inequality is as easy as removing the 15.3% welfare burden from the middle class. 15.3% is a ****ing big chunk of change to freely give to the wealthy.

 

[leftyjace]

The nail in the coffin is that since the 1970s, Europe's has become more egalitarian and wealth distributed (more) evenly while we have moved in the opposite direction. If technology has an adverse effect upon the middle-class then why hasn't Europe trended in the same way we have? Why hasn't the technology there killed jobs and redistributed wealth as it has here?

This is the piece I was curious about - that which says Europe's middle class has actually increased. Do you have anything for substantiation?

 

[moevillini]

Soooo many indicators show our economy is on the rise. I even read an article today that it's ready to take off. So why does it still feel like it's crappy? Why does it still feel like we're in a recession?...

It's been touched on to some extent in previous posts, but not explicitly - - to a certain degree, how it feels now depends on what you're using as your baseline. If the past 25 years is your baseline, then it's now wonder that things are as crappy as they seem to you. But if the 1990's and 2000's were actually periods of extra-ordinary growth and expansion, then what's happening now is just regressing back to the mean.

 

[moevillini]

https://davidcard.berkeley.edu/papers/skill-tech-change.pdf

and

This might be more clearer:
https://www.nytexaminer.com/2013/01/an-inequality-debate-heats-up/

and

The nail in the coffin is that since the 1970s, Europe's has become more egalitarian and wealth distributed (more) evenly while we have moved in the opposite direction. If technology has an adverse effect upon the middle-class then why hasn't Europe trended in the same way we have? Why hasn't the technology there killed jobs and redistributed wealth as it has here?

(sorry, too lazy to try to multi-quote)

interesting also, that the time frame mentioned in the articles Thriller quotes is the time frame that saw large numbers of women enter the workforce, and while the gender gap in wages has been slowly narrowing over the past 30 years, it does still exist.

So, technological change meant new jobs, many of which were filled by women entering the workforce for the first time. Family incomes rose because there were now two wage earners - not because they had to (which is more the case today) but because they could and it would enable the family to live a better life style. So that created increases in consumption, which in turn led to even more job creation. And eventually it got to a point where to afford what were deemed the necessities, it became imperative for families to have two wage earners.

 

[franklin]

(sorry, too lazy to try to multi-quote)

interesting also, that the time frame mentioned in the articles Thriller quotes is the time frame that saw large numbers of women enter the workforce, and while the gender gap in wages has been slowly narrowing over the past 30 years, it does still exist.

So, technological change meant new jobs, many of which were filled by women entering the workforce for the first time. Family incomes rose because there were now two wage earners - not because they had to (which is more the case today) but because they could and it would enable the family to live a better life style. So that created increases in consumption, which in turn led to even more job creation. And eventually it got to a point where to afford what were deemed the necessities, it became imperative for families to have two wage earners.

Can finally rep this. Moe is wise beyond her years.

Labor participation rate is THE headwind to our economy IMO. It had to peak at some point, and combined with tech taking the Lewis Turning Point good less skilled but high paying jobs will be the leading factor contributing to our European "decline".

I still don't doubt the drive for a richer life though, and see Americans working longer to compensate (for healthcare keeping us alive and kickin for so damn long). I know plenty people "working retired", and enjoying it!

It's all about the micro... we will adjust, bitching and moaning the whole way of course.

 

[♪alt13]

My perspective.
The economy was never better than it was from 2009 to 2011. Prices were low. If you wanted a job and actually would work, you had one. Everyone who thinks a healthy economy is when speculation and over consumption drive up the price of everything to the point that one has to live at their workplace in order stay afloat needs to reexamine their priorities. Prior to 2009 I felt like a slave and now I'm beginning to hear the slave master calling my name again. The "economy" isn't what it's cracked up to be.