This is Scott Beaulier:
Louis Brandeis once said, “I abhor averages.” After reading Average Is Over (Dutton Press) by Tyler Cowen of George Mason University, I’d concur with Brandeis: if the average American’s future is anywhere close to Cowen’s depiction, I’m abhorred!
Drawing in part from some of his previous work about the “great stagnation,” Cowen thinks the average American’s future will be stagnant and no better–technology and gadgets aside–than today in terms of income. Wages for American families have been stagnant since the 1970s, in fact, and Cowen sees no obvious source of wage growth on the horizon for the average American.
In fairness, Beaulier later takes a different and more upbeat perspective, and Tyler is a “utility optimist.” But many interpret this scenario quite negatively. Here’s what I don’t get. This “technology and gadgets” stuff is pretty important. The American middle class has some of the highest living standards the world has ever seen, and the pessimistic view is they’ll get still higher as new biotech inventions cure diseases and immersive computer games provide kids with thrills far beyond the plastic toy soldiers I played with on the carpet in the 1960s? What’s the optimistic view?
Then there’s the jobs issue:
What ought to worry local residents is Georgia’s inability to produce workers who can build the sets, run the wires or manage the sound for such films. This skills shortage may endanger the $4 billion or so that Jim Jacoby, whose firm plans to redevelop the complex, reckons the film industry could bring to the state this year.
Georgia’s skills shortage goes beyond the film industry. For every four tradesmen that retire just one takes their place, even though the state’s unemployment rate hovers around 7.4%, over a point higher than the national rate. But a similar problem, albeit in less acute form, is in evidence across America. More than half of the country’s tradesmen are aged over 45. According to the Department of Labour, America will need 41,700 more cement masons, 114,700 more electricians and 218,200 more carpenters by 2022. The government already spends around $17 billion a year trying to close what the president, Barack Obama, calls the “skills gap”. On July 22nd Mr Obama signed laws that he said would make job-training programmes that receive federal money “more effective, more responsive to employers and more accountable for results”.
One such programme is Go Build Georgia, which teaches teenagers a trade. But efforts to train young people as plumbers or pipe-fitters run up against concern from parents. Instead of being proud to raise a future welder, “everyone wants to believe that their child will go to Harvard”, says Matthew Gambill, the director of the Georgia Association for Career and Technical Education. Despite the lower cost of a skills-based education and the solid job prospects, enrollment at technical colleges has dropped 23% since recession-stricken students clamoured for entry in 2010.
So there are lots of good middle class jobs out there like plumbers and electricians, but Americans are turning up their noses. They don’t want to be seen as blue collar. They are Harvard material.
So off they go to college to study the STEM fields. Here’s Kevin Erdmann:
This reminds me of one of the facts about American life that undermines the widely held belief in the death of the American middle class. That picture of India is the picture of a place where people aren’t middle class but aspire to be. People who are struggling, work.
Even if you could go hire 1,000 engineers in American universities, you’d still end up with 700 Asian engineers.
College is widely attended in America. If the middle class is dying, it’s not for lack of education. And, once you’re there, you can choose among hundreds of areas of study. They all basically cost the same and take the same amount of time. But, some require more work. And the harder subjects generally pay more – engineering, sciences, computer & technology. The main difference is – how hard do you want to work for the next 4 to 6 years in order to increase your lifetime earnings? Now, wouldn’t you think latest “first generation that will be worse off than their parents” would be clawing and fighting to get the spots in those subjects? Yet, how many American universities would literally be closing down those departments if they didn’t have immigrant students to fill up the classes with?
So they don’t want to be plumbers because it’s not glamorous enough. And they don’t want those STEM jobs because that would require a lot of studying. Might interfere with the partying. Wait, I forget about all those students who cannot “afford” to go to college. And yet strangely enough I see far fewer teenagers working then when I was young. Now I probably sound like an old reactionary. But if they aren’t working I say good for them! They should optimize. I presume they need the money much less than I did when I was 15 or 16 years old, back in the early 1970s.
Despite the decline of the middle class, college administrators tell professors like me that they must offer more and more luxurious student housing to keep up with the fact that kids today don’t grow up sharing a bedroom. From the NYT:
COLUMBIA, Mo. — Brenden Heiland had breathed the vanilla lavender-scented clubhouse air. He had seen the beach volleyball court, toured the game room equipped with billiards, Ping-Pong and air hockey tables, and learned with delight of the Friday pool parties with a D.J., free food and snow cones, spiked with rum for those of age.
Now, as he and the three friends he was apartment hunting with stood peering at the pool, Mr. Heiland, 19, pondered what life might be like if he chose to live in this off-campus complex, the Grove, when his sophomore year at the University of Missouri begins this fall.
“It’s like a vacation, almost,” he said. “I’m not going to go to class — that’s how I look at it.”
As private housing developers try harder than ever to outdo the amenities that their competitors offer in college towns, concern is growing about the academic and social consequences of upscale off-campus student housing.
The spas, tanning salons and sprawling pools offered by these complexes, which often require their tenants to be students, are a far cry from the traditional on-campus residence halls that may house classrooms and faculty and host lectures and academic discussions.
What happened to those cement block prison cell dorm rooms of the 1970s?
During hard times people buy second hand goods. I have a bunch of furniture I bought used from other people’s houses–still quite nice. Here’s the WSJ:
That Perfect Dining Room Table? No One Wants It, Even If It’s Free
. . . Whether moving to a smaller abode or simply cleaning out, many people are making an unwelcome discovery: Their prized family heirlooms have turned into junk. Upholstered sofas, formal dining tables and hutches, Victorian-style mahogany and oak furniture, entertainment units, bulky television sets, pianos—all have become almost impossible to sell or, in some cases, give away.
The furnishings industry has a name for the big, dated wood-finished and upholstered pieces that no one wants anymore—”brown furniture.” Stockpiles of “brown leather and brown Ultrasuede couches have nowhere to go,” says Jeffrey Brooks, a Long Valley, N.J., interior designer.
What happened to the market for secondhand furniture? Those consumers are shopping at Ikea, Wal-Mart and Target, says Jerry Epperson, a partner at Mann, Armistead and Epperson, a Richmond, Va., investment bank specializing in the home-furnishings sector. The cost of furniture, in constant dollars, has fallen on average about 50% over the past 30 years, he says, the result of the availability of cheaper imports.
Even the Salvation Army, known for making furniture pickups, has become pickier in recent years, says Major Greg Davis, a general secretary at the nonprofit. Delivery-truck drivers began carrying Internet-enabled tablets about two years ago. When in doubt, they take a quick photo of a piece and send it ahead to the local store to make sure it will be accepted. Many shelving units are turned away, he says, as are pianos . . .
OK, some of that baroque brown stuff is pretty hideous, but still . . .
Alan Blinder is a very bright and well-intentioned liberal:
Concentrating on, say, the growing gap between the upper 1% and the lower 99% leads Mr. Piketty to advocate such redistributive policies as higher top income-tax rates, stiffer inheritance taxes and a progressive tax on wealth.
But if you dote instead on plight of the lower 15%-20%, or even on the lack of progress of the lower 50%, you are led to think about policies like giving poor children preschool education, bolstering Medicaid, raising the minimum wage, expanding the Earned Income Tax Credit, and defending anti-poverty programs like food stamps.
These two policy agendas are not inconsistent, but they are certainly very different. The first tries to level from the top; the second tries to level from the bottom. Between the two, I’d like to think that most Americans join me in favoring the second. But I’m worried. Does Pikettymania prove me wrong?
Yes it does Mr. Blinder. I may not agree with all of Blinder’s policy recommendations, but he’s thinking like a good utilitarian. In a rational world we’d do “free policies” that help the middle class, like simplifying taxes, abolishing the FDA, removing occupational licensing laws, monetary stimulus to create jobs, etc. But when it came to policies that actually cost money, we’d focus on the poor in America, or even better on the much poorer people in developing countries. But not the middle class.
The plight of the American middle class is perhaps the phoniest issue I’ve ever seen. I don’t know the agenda of the people obsessing about this issue, but I’m pretty sure it’s not utilitarianism.