I just read The Meritocracy Trap by Daniel Markovitz. It’s an incredible book and talks at length about the issue in the article.
A word about this:
“What technology and trade have done, however, is displace millions of Americans from their middle-class jobs, and send them hurtling down the income ladder into less remunerative occupations.”
It’s not that simple. It’s not just trade and technology.
The causes of the erosion of good middle-class jobs are extremely complex. I’ll talk about just one here, since I don’t have too much time:
Tax law works to advantage higher tier workers over middle class workers. It costs much less in payroll taxes to hire a single superskilled worker at extremely high compensation than it does to hire a bunch of mid skill workers at middle class comp.
Quoting from the book:
“A simple example illustrates the special burden that the payroll tax imposes specifically on middle-class labor. If a bank deploys midcentury financial technologies to issue home mortgages using twenty mid-skilled loan officers who each earn $100,000 per year, this costs the bank and the workers, taken together, $306,000 in payroll taxes. By contrast, if the bank were to switch to the current mode of production and displace the mid-skilled loan officers with a single Wall Street trader who earns $2 million, this would cost the bank and the trader only about $90,000.
“Where two technologies of production are economically equivalent, but one requires twenty mid-skilled workers while the other requires one super-skilled worker, the mid-skilled approach currently faces an average payroll tax rate over 10 percentage points higher than the meritocratic approach, which produces an aggregate payroll tax burden over three times as great.
“The payroll tax, in other words, substantially suppresses mid-skilled employment and wages and fosters super-skilled employment and wages. (Indeed, if the super-skilled worker can get capital gains treatment for her income, by styling it as founder’s shares or carried interest, the income tax adds a further bias, on the order of 20 percentage points.)”
While 306 vs 90 is nothing to scoff at, we're talking about 200 / 2000 = 10% of a difference, in the extreme and unrealistic case you quoted. So in less extreme cases it would be just a few percentage points.
And in Sweden it's 25, the numbers are probably similar across all of Europe (and sometime increases due to employment benefits). And don't mention paternity leave.
Required and actual are very different animals. Just b/c the govt doesn't say you must doesn't mean employers don't provide good benefits. Reddit always says race to the bottom but a quick look around doesn't support it.
Parent is clearly comparing present day to two generations ago to make an argument that there's been a general positive claim. Present day Germany is completely irrelevant to their point.
Thank goodness the economy is moving in the right direction.
The US has low unemployment, rising wages, and a robust stock market. If any of these were reversed, things would be different. At least we're on the right trajectory.
As some of the posters here note, automation could reduce job prospects in the near years ahead. I'm hoping retiring boomers (including myself) will open enough slots to compensate for this.
The charts show that wages are at record high levels, and are trending in the right direction.
I suppose we could hope that the record was set even higher, or that the trend was moving even faster in the right direction?
My point is that things really are good. We can always hope for better, but we need to understand that these are good times. (They won't always be so.)
It’s clearly societal choices: wages in the US for the poor and lower middle class are really low compared to the cost of housing / decent food / health care / education.
The lower middle class can afford decent food, just some of them don’t want to eat within their means or aren’t cost conscious.
Actually I think innumeracy is a big problem for a lot of people with low incomes. I have a relative who I suspect is innumerate and it’s both fascinating and sad when you get insight into their budgeting/estimation abilities.
Do you have data for this? Everywhere I look puts the US among the very best.
For example, here [1] is UK by quintile:
In 2017/18, the average UK household income before housing costs was:
top quintile: £52,000
second highest quintile: £34,700
middle quintile: £26,400
second lowest quintile: £20,000
bottom quintile: £13,100
The average UK household income after housing costs was:
top quintile: £47,700
second highest quintile: £30,900
middle quintile: £22,800
second lowest quintile: £16,100
bottom quintile: £9,200
Here [2] is the US, 2018 quntiles: 13,775; 37,293; 63,572 ; 101,570; 233,895
PPP Adjusted means adjusted to cost of living [3]. Adjusting the incomes above gives for the bottom 20% of US $13.7K income, for UK $13.1K.
From all the data I can see over many countries, the US poor and lower middle class are doing much better than almost any place in the world.
'suck' is a relative term based on some standard. Is the standard chattel slavery? Every single job in the US is spectacular in comparison. Is the standard some cushy s/w dev job at a megatech company? Most jobs suck in comparison.
The word is there to create a catchy headline. The article very much goes into the why:
* Many jobs provide poor opportunities for advancement if desired.
* Many jobs provide poor compensation relative to cost of living.
* Many jobs lack stability, either in pay, hours, or continued employment.
* Many jobs provide limited agency to improve working conditions or business practices.
The last one is something that even I, a holder of a cushy tech job, grapple with. Most of my job is fine, but it's painful to deal with boneheaded and poorly thought out management decisions that management neither cares to justify nor is willing to accept feedback on.
There's a lot of "I'm in charge, so we're doing it my way, which I know is perfect because I decided it was" in American corporate culture, with little avenue to course-correct, as the most frequent response seems to be retaliation for bruising someone's ego.
"pollster asked 6,600 U.S. workers what they saw as the defining characteristics of a “good” job, then used their answers to construct a “job-quality index.”
The article, which I'm sure you've read, links to a survey in which Gallup attempted to answer your question. They asked people exactly what features they look for in a quality job, then asked people if their jobs meet those standards. The summary specifically mentions "autonomy, opportunities for advancement and job security."
It's interesting to note that expectations for the limits of what's acceptable for labor are defined by, "Is it as bad as slavery?"
And for what it's worth, there is indeed "jobs" in this country that are objectively as bad as slavery. Most Americans do not work them, but they do help shape the market most Americans work in; and, in some cases, they are outright competing with them.
Compared to the average job back several decades ago (for a large part of the post war period).
Of course most people, being less talented than us, are lesser humans, and so deserve to have crappier jobs, hours, pay, and lives. (Well, not really, but probably many think that way. They might not say the "lesser humans" part out loud, but they're OK with people having lesser jobs and worse conditions for them and their kids, even if they work harder than them -let them eat cake and work smarter, they'd say-. They're OK as long as its not them of course).
I don't think the title of this article is good or portrays what it is really getting at. It is not really about having a cushy job that you like going to, but instead more about how jobs available today don't pay well.
The pay does not match up to inflation, healthcare costs and cost of living. Put the cost of higher education into that mix and it just adds to the problem. So many are stuck paying off high students loans to only be able to get mediocre paying jobs.
"only 40 percent of Americans currently have 'good' jobs."
Meaning head of household jobs. That is a problem!
Thats still all relative though. If everyone made between 10-15 bucks an hour, 15 bucks an hour would be enough to pay for anything that matters. Chinese investors aside, the reason an elementary school teacher might have trouble affording an apartment in Manhattan is because they're competing with people who can afford them. Such as the s/w engineer with the cushy job.
What else can you expect in a mass-manufacturing-based economy; where even the act producing or manufacturing locally is worthy of pride?
Margins need to be as razor-thin as possible in order to complete, and payroll is often one of the largest expenses.
As a result there will be a significant group of jobs by which little experience is required and turnover may be high - but since the jobs don’t require a lot of skill, the high turnover rate is not an issue.
For this job group, there is no reason to improve the working conditions, as, from the outset - these workers are never expected to stay for long.
An individual like a Junior Software Developer working on a large codebase that‘s existed for time, gets more valuable to the employer over the years, as their knowledge of that company’s particular codebase grows, and how the workflow of their company functions.
A Junior developer, then, has a career path - as they demonstrate their knowledge in the codebase they move from Junior to Intermediate to Senior and thusly by the time they may reach management they have demonstrated an aptitude in it.
Labor is one of the largest expenses in part because it has to account for the inefficiencies introduced by turnover (including on-ramping, i.e., training). Many of the jobs deemed "unskilled" actually do require skill and experience to perform in a proficient manner.
It's true that anyone can flip a burger or poor a cup of coffee, just as it's true that anyone can hunt-and-peck a command; it's something else to be able to manage a kitchen and dining room with one or two assistants during peak, 6 hours into a shift that was scheduled with only a week's notice, observing food safety practices and producing the correct order from dozens of options in a timely manner and with unflappable hospitality, as many food service jobs now require of their employees. This while people complain about the difficulty of hosting family for dinner once a year.
Class, race, and gender associations have much to do with our perceptions.
The thing about unskilled jobs is that ability of being able to complete a task is a pretty low bar. You can always increase productivity through work experience.
Payroll, in fact, is a very small slice of manufacturing costs. Actual components, overhead, utilities, equipment,etc. all are larger pieces of the COGS. More automation, IoT compatibility are the keys to reducing costs. Less real estate, more remote logins for support (the folks on the other end of that call earn, too).
The “Trump's America” phrase, rather than the more correct “21st century America” (it’s been this way for a while now) makes the whole thing a bit suspicious, too.
Thankfully you can create your own job or at least start moving in that direction. It's easier than ever to do so and can often learn everything you need online. And signs point to this being increasingly the case in both respects.
Readit News
A word about this:
“What technology and trade have done, however, is displace millions of Americans from their middle-class jobs, and send them hurtling down the income ladder into less remunerative occupations.”
It’s not that simple. It’s not just trade and technology.
The causes of the erosion of good middle-class jobs are extremely complex. I’ll talk about just one here, since I don’t have too much time:
Tax law works to advantage higher tier workers over middle class workers. It costs much less in payroll taxes to hire a single superskilled worker at extremely high compensation than it does to hire a bunch of mid skill workers at middle class comp.
Quoting from the book:
“A simple example illustrates the special burden that the payroll tax imposes specifically on middle-class labor. If a bank deploys midcentury financial technologies to issue home mortgages using twenty mid-skilled loan officers who each earn $100,000 per year, this costs the bank and the workers, taken together, $306,000 in payroll taxes. By contrast, if the bank were to switch to the current mode of production and displace the mid-skilled loan officers with a single Wall Street trader who earns $2 million, this would cost the bank and the trader only about $90,000.
“Where two technologies of production are economically equivalent, but one requires twenty mid-skilled workers while the other requires one super-skilled worker, the mid-skilled approach currently faces an average payroll tax rate over 10 percentage points higher than the meritocratic approach, which produces an aggregate payroll tax burden over three times as great.
“The payroll tax, in other words, substantially suppresses mid-skilled employment and wages and fosters super-skilled employment and wages. (Indeed, if the super-skilled worker can get capital gains treatment for her income, by styling it as founder’s shares or carried interest, the income tax adds a further bias, on the order of 20 percentage points.)”
America has zero required vacation per year. Germany has 20 days every year for a five day working-week.
[1] https://www.gesetze-im-internet.de/burlg/__3.html
Also, I'd rather not work in WalMart.
The US has low unemployment, rising wages, and a robust stock market. If any of these were reversed, things would be different. At least we're on the right trajectory.
As some of the posters here note, automation could reduce job prospects in the near years ahead. I'm hoping retiring boomers (including myself) will open enough slots to compensate for this.
https://seekingalpha.com/article/4280594-median-household-in...
Also, this doesn't account for coastal-vs-hinterland areas, which seems to be an issue.
I suppose we could hope that the record was set even higher, or that the trend was moving even faster in the right direction?
My point is that things really are good. We can always hope for better, but we need to understand that these are good times. (They won't always be so.)
Actually I think innumeracy is a big problem for a lot of people with low incomes. I have a relative who I suspect is innumerate and it’s both fascinating and sad when you get insight into their budgeting/estimation abilities.
For example, here [1] is UK by quintile: In 2017/18, the average UK household income before housing costs was:
top quintile: £52,000 second highest quintile: £34,700 middle quintile: £26,400 second lowest quintile: £20,000 bottom quintile: £13,100 The average UK household income after housing costs was:
top quintile: £47,700 second highest quintile: £30,900 middle quintile: £22,800 second lowest quintile: £16,100 bottom quintile: £9,200
Here [2] is the US, 2018 quntiles: 13,775; 37,293; 63,572 ; 101,570; 233,895
PPP Adjusted means adjusted to cost of living [3]. Adjusting the incomes above gives for the bottom 20% of US $13.7K income, for UK $13.1K.
From all the data I can see over many countries, the US poor and lower middle class are doing much better than almost any place in the world.
[1] https://www.ethnicity-facts-figures.service.gov.uk/work-pay-...
[2] https://www.census.gov/data/tables/time-series/demo/income-p...
[3] https://data.oecd.org/conversion/purchasing-power-parities-p...
Deleted Comment
* Many jobs provide poor opportunities for advancement if desired.
* Many jobs provide poor compensation relative to cost of living.
* Many jobs lack stability, either in pay, hours, or continued employment.
* Many jobs provide limited agency to improve working conditions or business practices.
The last one is something that even I, a holder of a cushy tech job, grapple with. Most of my job is fine, but it's painful to deal with boneheaded and poorly thought out management decisions that management neither cares to justify nor is willing to accept feedback on.
There's a lot of "I'm in charge, so we're doing it my way, which I know is perfect because I decided it was" in American corporate culture, with little avenue to course-correct, as the most frequent response seems to be retaliation for bruising someone's ego.
"pollster asked 6,600 U.S. workers what they saw as the defining characteristics of a “good” job, then used their answers to construct a “job-quality index.”
Deleted Comment
The survey link, but you have to register to read the whole thing: https://www.gallup.com/education/267590/great-jobs-lumina-ga...
And for what it's worth, there is indeed "jobs" in this country that are objectively as bad as slavery. Most Americans do not work them, but they do help shape the market most Americans work in; and, in some cases, they are outright competing with them.
In the "land of the free" nonetheless!
Of course most people, being less talented than us, are lesser humans, and so deserve to have crappier jobs, hours, pay, and lives. (Well, not really, but probably many think that way. They might not say the "lesser humans" part out loud, but they're OK with people having lesser jobs and worse conditions for them and their kids, even if they work harder than them -let them eat cake and work smarter, they'd say-. They're OK as long as its not them of course).
The pay does not match up to inflation, healthcare costs and cost of living. Put the cost of higher education into that mix and it just adds to the problem. So many are stuck paying off high students loans to only be able to get mediocre paying jobs.
"only 40 percent of Americans currently have 'good' jobs."
Meaning head of household jobs. That is a problem!
Margins need to be as razor-thin as possible in order to complete, and payroll is often one of the largest expenses.
As a result there will be a significant group of jobs by which little experience is required and turnover may be high - but since the jobs don’t require a lot of skill, the high turnover rate is not an issue.
For this job group, there is no reason to improve the working conditions, as, from the outset - these workers are never expected to stay for long.
An individual like a Junior Software Developer working on a large codebase that‘s existed for time, gets more valuable to the employer over the years, as their knowledge of that company’s particular codebase grows, and how the workflow of their company functions.
A Junior developer, then, has a career path - as they demonstrate their knowledge in the codebase they move from Junior to Intermediate to Senior and thusly by the time they may reach management they have demonstrated an aptitude in it.
It's true that anyone can flip a burger or poor a cup of coffee, just as it's true that anyone can hunt-and-peck a command; it's something else to be able to manage a kitchen and dining room with one or two assistants during peak, 6 hours into a shift that was scheduled with only a week's notice, observing food safety practices and producing the correct order from dozens of options in a timely manner and with unflappable hospitality, as many food service jobs now require of their employees. This while people complain about the difficulty of hosting family for dinner once a year.
Class, race, and gender associations have much to do with our perceptions.
This is lazy writing at best.