The gap keeps growing

December 3, 2019 2:47 AM

A report from CBS on a study from the Brookings Institution reveals that “ 44% of U.S. workers are employed in low-wage jobs that pay median annual wages of $18,000.”
posted by Ghidorah (41 comments total)

Compare that to the 1950's and 1960's when a single-earner household could reasonably hope to purchase a house. Is this called progress?
posted by fairmettle at 2:58 AM on December 3, 2019 [18 favorites]

It’s the Brooking Institution by the way. I worked at Urban Institute and I would mixed them up as well.
posted by terrapin at 4:29 AM on December 3, 2019

Is this called progress?

To the people that matter: yes.
posted by pompomtom at 4:39 AM on December 3, 2019 [4 favorites]

This is the rotten lumber propping up the low unemployment numbers.
posted by Thorzdad at 4:44 AM on December 3, 2019 [62 favorites]

This is a good study but it's avoiding some central questions: are these jobs that could pay enough, ie is somebody else making profits; and if not, are these jobs that are socially necessary at all, eg working in agriculture vs I dunno, spinning a sign advertising a car wash. Answering those can help figure out whether the issue is bargaining power for workers or simple labor surplus.
posted by ropeladder at 5:10 AM on December 3, 2019 [6 favorites]

Mod note: Fixed "Institute" → "Institution"
posted by taz (staff) at 5:19 AM on December 3, 2019 [1 favorite]

How is “labor surplus” a thing? I tend to think that an economy is a system to produce goods and services for the people. Labour is the people.

A “labor surplus” could only exist in a situation where an economy is some different sort of system.
posted by pompomtom at 5:21 AM on December 3, 2019 [16 favorites]

Unemployment is lower than ever! Except no one working is actually getting paid a living wage, and many of the workers are part-time or holding down multiple jobs, and no one has health benefits or any kind of a retirement plan, and most of them are saddled with crippling debt.

But low unemployment!
posted by caution live frogs at 5:22 AM on December 3, 2019 [65 favorites]

Answering those can help figure out whether the issue is bargaining power for workers or simple labor surplus.

Any given employer, besides a few pathological cases that aren't going to affect the headline numbers, is going to hire people because they think it will profit them to do so. It's obviously entirely possible that many of them are wrong, but we're only going to have a subset of their books available in this hypothetical audit, so it's not obvious to me how we ultimately make this determination. If you're suggesting that every single employee should be directly causing revenue >= to their salary, I ask who does the cleaning and bookkeeping?
posted by PMdixon at 5:26 AM on December 3, 2019 [2 favorites]

Surplus labor is a pretty simple concept. Take the amount of work necessary to support the population, subtract that from the total number of workers available, and presto!

Back when, almost all labor was involved in either raising children or farming/gathering food. As fewer people have been necessary to keep the population fed, surplus labor has become available for other things. Sometimes, when societies have lacked jobs for this surplus labor, we have let people starve in the streets, tossed people in gulags, or started unnecessary wars to kill people off.
posted by wierdo at 5:34 AM on December 3, 2019 [17 favorites]

Compare that to the 1950's and 1960's when a single-earner household could reasonably hope to purchase a house. Is this called progress?

In the US, the 50s and 60s were a bubble. Especially for white males in those industrial centers. It was an industrial producer that had been spared mass destruction of infrastructure.

Someone like myself isn't longing for the good old days of Ozzie and Harriet. Yet there are enough people who feel that my progress came at their expense, so much so as to drive a good portion of the political landscape today.
posted by 2N2222 at 5:39 AM on December 3, 2019 [22 favorites]

Surplus labor is a pretty simple concept. Take the amount of work necessary to support the population, subtract that from the total number of workers available

Extremely un controversial and well agreed-upon quantities for sure.
posted by PMdixon at 5:40 AM on December 3, 2019 [12 favorites]

The article is interesting and well worth reading.

Their median hourly wage is $10.22 per hour — that's above the federal minimum wage of $7.25 an hour but well below what's considered the living wage for many regions.

That we allow employers to pay less than a living wage (or, alternatively, that we don't provide a robust safety net for low-income people to fill that gap) is, to me, a real immorality.

Compare that to the 1950's and 1960's when a single-earner household could reasonably hope to purchase a house. Is this called progress?

Yes, the middle of the 20th century had an economy with far less inequality than we have now. But as others have noted, those benefits largely went to households headed by white men; others did not benefit nearly as much. Personally, I would like to bring back some of the attributes of that era (eg high taxes on the wealthy, robust labor protections, etc) while preserving the progress that has been made towards equality and social justice. Right now that feels like a pipe dream, though, given the attacks and rollbacks on both economic equality and social justice.
posted by Dip Flash at 5:55 AM on December 3, 2019 [28 favorites]

Extremely un controversial and well agreed-upon quantities for sure.

Yes, "creative" redefinition of words is an enabler of fuckery, as it has always been and will ever be. Many a famine has resulted from that choice.
posted by wierdo at 6:12 AM on December 3, 2019 [2 favorites]

Take the amount of work necessary to support the population

Part of the beauty of the last decade's Bush Boom was the stealth stimulus of the one-time housing mortgage fraud ---> suicide lending-fueled bubble of 2002-2007, which injected literally TRILLIONS of dollars directly into middle-class home-owner America.

https://fred.stlouisfed.org/graph/?g=pEde

shows real GDP % growth (blue) vs real household debt growth % (red)

the scale of this monetary injection is most visible in this graph:

https://fred.stlouisfed.org/graph/?g=pEdg

per-capita (age-16+) real household mortgage debt expansion ($, YOY)

showing the monetary injection at $4,000 per capita per year 2003-2006.

This was a real-world experiment resembling MMT's helicopter money and times were pretty good then.

Give everyone $4000/yr in free money again and people would find thing to spend it on, until eventually the high-rent spaces on the board (housing, health-care, education) take it all away.
posted by Heywood Mogroot III at 6:14 AM on December 3, 2019 [3 favorites]

Sometimes, when societies have lacked jobs for this surplus labor, we have let people starve in the streets, tossed people in gulags, or started unnecessary wars to kill people off.

I was listening to an interview with Jaron Lanier this morning in which he reports that several Silicon Valley "thought leaders" (who he doesn't name) have said to him that the opiod epidemic is actually opportune, given the coming AI-drive unemployment crisis.
posted by ryanshepard at 7:35 AM on December 3, 2019 [8 favorites]

Is there a modern equivalent to serfdom where economic disparity erases any meaningful objections to that definition? Also, is serfdom a typical–maybe even inevitable–outcome of unchecked profit/power hoarding? Or does it require specific planning and coordination from those at the top?
posted by Godspeed.You!Black.Emperor.Penguin at 7:38 AM on December 3, 2019 [2 favorites]

"If they would rather die, they had better do it, and decrease the surplus population."

Ebeneezer Scrooge, Silicon Valley thought leader.
posted by Esteemed Offendi at 7:47 AM on December 3, 2019 [43 favorites]

Productivity has increased massively. It's the very notion that TIME should equal PAY that has put us in this position, and I don't see a way out of it other than UBI.

I believe we are well past the point where 95+% of able-bodied adults need to work 40 hours per week to produce, manage, and maintain all of the food, goods, infrastructure, culture, and entertainment our society measurably wants.

And so we have a race to the bottom where everyone is precarious. Anyone is replaceable at any time. Unless you're of the connected, moneyed class: an exceptionally talented high producer, or the idiot son or grandson of one.

Our culture is broken. The notion that if you do not work you do not eat is so deeply ingrained that I do not believe we will be able to solve this problem, and the US empire is headed for collapse and failure.

Unless and until we liberate ourselves from the idea that WORK makes you WORTH anything, we'll just keep going down this road.

And whose purposes does it serve for it to be this way? The idiot sons and grandsons of vast wealth. The Waltons. The Trumps. The Sacklers. Ivy League Legacies.

So yeah, we DO have surplus labor and we won't admit it, and we'll keep eroding the pay of those people whose work becomes more and more undervalued due to being surplus, due to Baumol's cost disease, due to entrenched wealth seeking rents, and due the incredible market distortion of having everyone's retirement income tied to market growth.
posted by tclark at 7:52 AM on December 3, 2019 [47 favorites]

The gap keeps growing

To pick a nit: yes, the gap keeps growing, but this study examines only a point in time, so it tells us nothing about the trends. Increasing inequality is certainly a major economic problem, but it's not like there weren't millions of people scraping by in the past too.
posted by Mr.Know-it-some at 9:03 AM on December 3, 2019 [1 favorite]

Peg minimum wage to 30% of the total compensation (including medical & retirement) of the highest compensated US Senator. Do I get my nobel prize now?
posted by j_curiouser at 9:09 AM on December 3, 2019 [4 favorites]

The word "necessary" is interesting to me, and one that's easy for me to get stuck on.

<capitalism>Doilies, strictly speaking, aren't necessary. However, if there's a demand for them and someone wants to employ people to meet that demand, they can. But since they're a disposable luxury good, people will presumably pay only so much for them (except rich people who are stupid and not plentiful enough to support the paper doily market alone). So if you're making doilies, you gotta watch your margins because the bottom could drop out at any time. What do you do to protect your margins? Employees are by far the biggest fixed cost so you pay shit wages.</capitalism>

So I can either narrow my terms such that the necessity of doily production is assumed, and lumped in with every other industry. Under this rubric, a job is a job and everyone who works deserves a comfortable wage.

Under broader terms, the doily market is stupid and since it can't sustain well-compensated labour, should just be abolished -- a business model that doesn't include at its foundation the humane treatment of workers isn't a business model at all.

Either way, what I end up with is the feeling that a minimum wage isn't a guarantee to workers, it's a sanity check on business operators and the people who (should) regulate them: If you can't meet your minimal responsibilities to society by a) paying decent wages and b) paying your taxes, the fitness of the rest of your business model is moot, and you should try to find another way to make it happen or give up. If your product is important enough that society needs it, we will find a way to pay for it*.

* noting that necessary things like insulin in the US aren't expensive because of manufacturing wages, but because of raw greed.
posted by klanawa at 10:07 AM on December 3, 2019 [9 favorites]

Peg minimum wage to 30% of the total compensation (including medical & retirement) of the highest compensated US Senator.

Senators make $174,000 (not including benefits); assuming 2,000 annual hours, that's about $87/hour; 30 percent of that woud be $26/hour. Recent research suggests that raising it to $15 wouldn't have the negative employment effects that many economists had worried about in the past, but $27 is a whole 'nother world. I think even huge advocates of a higher minimum wage would be wary of pushing it anywhere near there.

Plus, Congressional salaries are way too low (as are salaries for other top federal employees, including judges, who generally make less than first-year associates at big firms). It's not just that people don't take the jobs, but that once they have served, they are being drawn out of the workforce to work as lobbyists. And salaries for Congressional staff are capped at the amount for members, which just makes the problem worse. ("The entire House and Senate combined spend less on staff ($2 billion a year) than corporations spend on lobbying ($2.6 billion a year).")
posted by Mr.Know-it-some at 10:19 AM on December 3, 2019 [4 favorites]

I wouldn't call the 50s and 60s a bubble. It was a long term economic expansion brought on by 20 years of pent up demand for housing and automobiles. I don't think that it had much to do with the war other than the fact that rationing ended and bans on civilian sales of cars and tires ended.
Our problems today are a result of the Republicans slowly repealing the progress made by the New Deal and the New Society.
posted by Bee'sWing at 11:30 AM on December 3, 2019 [4 favorites]

I don't think that it had much to do with the war other than the fact that rationing ended and bans on civilian sales of cars and tires ended.

I think it had a lot (but not everything) to do with the war. After WW2, the US was, almost literally, the only major industrial power with a functioning, fully amped-up industry, capable of everything from electronics and vehicles to aircraft and cargo ships. Everything from the lightest to the heaviest industries were untouched in WW2, and aside from Canada (which didn't even rate in industrial capability versus the US in 1946), there was nobody. Everyone else had to spend one to two decades to even stop rationing.
posted by tclark at 2:16 PM on December 3, 2019 [6 favorites]

I think you are underestimating the industrial power of the Soviet Union.
But there were a lot of countries that escaped the destruction of the war, Canada, as you say, but also Australia and Mexico and Brazil and India. Where was their economic boom?
posted by Bee'sWing at 3:08 PM on December 3, 2019 [1 favorite]

You might be underestimating Canada too. They had a pretty world class airplane manufacturing and arms industry (for their size).
posted by Bee'sWing at 3:20 PM on December 3, 2019

Yes, "creative" redefinition of words is an enabler of fuckery, as it has always been and will ever be. Many a famine has resulted from that choice.

I think the idea that what production is necessary can be usefully determined by anything resembling consensus is risible - I'll vaguely handwave at Arrow if you want an analytic argument. There has to be a social mechanism by which that can be worked out and adjusted over time because it's an inherently political question. If you don't mean that there is a unique, unambiguously best allocation of labor, you might want to adjust what you're putting down, because that's definitely what I'm picking up.
posted by PMdixon at 3:27 PM on December 3, 2019

Where was their economic boom?

Where was their industrial base?
posted by PMdixon at 3:32 PM on December 3, 2019 [1 favorite]

Beats the hell out of me that pundits keep telling us the economy is doing well, so that will help Trump. I don't know how people will vote, but it won't be because they feel so secure about their personal financial situation. (Obviously I'm not talking about the .1%.)
posted by zenzenobia at 4:07 PM on December 3, 2019 [2 favorites]

I wouldn't call the 50s and 60s a bubble.

I don't know how you'd characterize it as anything other than a bubble for reasons already laid out. Western Europe had plenty of pent up demand, having to endure two massive wars on its own turf in the span of 20 years. Yet much industry had been obliterated, austerity had been thrust upon them due to the massive amounts of money having been spent on said obliterated industry. Not to mention the tremendous losses in human capital. On all those fronts, the US was poised pretty well in the aftermath. Pent up demand in Europe would have to remain pent up for quite a while. They couldn't afford much, couldn't manufacture much, and what they could afford had to deal in one way or another with the unparalleled economic and industrial power that was the US.

I think you are underestimating the industrial power of the Soviet Union.

The Soviet Union suffered staggering losses in the war, and it's remaining industrial power came at a cost almost too horrible to comprehend. The only lesson learned here is that a country can become a world military power... if it ruthlessly controls all the output of its population, regardless of the hardship it causes. This was a system that had no compunction with starving whole populations to death, stealing all of your labor as it saw fit, terrorizing and depriving its people for any and all reason. Whatever industrial power the Soviet Union had did not go to sate the needs and wants of its people, or become an economic juggernaut in any way that any sane person could admire. May as well ask why North Korea isn't considered a great industrial power.

Places like Mexico and Brazil and India were relatively insignificant as global economic and industrial centers until well after the period of time we're talking about.
posted by 2N2222 at 4:47 PM on December 3, 2019 [5 favorites]

I think the idea that what production is necessary can be usefully determined by anything resembling consensus is risible

The victims of Mao's Great Leap Forward would have had no trouble reaching a consensus on that. The closer you are to having first dibs on the food supply, the easier it is to overthink.
posted by wierdo at 6:04 PM on December 3, 2019 [2 favorites]

Revisiting min wage pegged to Senate compensation: I don't believe I can be convinced that any senator works harder or contributes more to the smooth operation of the economy than a framer, disher, or LPN. And let's not neglect defined benefit pensions and free health care for life.

And if that seems excessive, we can always trim back Senate compensation until whatever 'realistic' minimum wage is met.

The fucking money is available. We're the richest society in history. /rant
posted by j_curiouser at 10:20 PM on December 3, 2019 [1 favorite]

Recent research suggests that raising it to $15 wouldn't have the negative employment effects that many economists had worried about in the past, but $27 is a whole 'nother world. I think even huge advocates of a higher minimum wage would be wary of pushing it anywhere near there.

Of the waged, minimum-waged workers tend to spend more of their wages than any other cohort. On a macro level the boost to aggregate demand would surely be welcomed by Western economies presently struggling with the fact that rich bastards have all the money, and only spend it to ensure/enhance their rich-bastardry.

On the micro level, sure doubling wages (for the most-needy) instantly would be problematic to some employers, which has macro implications - but that's largely about the uncertainty. Schedule it reasonably and the big problem will be the bottom falling out of the diamond-encrusted yacht market.
posted by pompomtom at 5:32 AM on December 4, 2019 [2 favorites]

(Presumes democracy. May not work in plutocracies.)
posted by pompomtom at 6:11 AM on December 4, 2019

We're the richest society in history. /rant

The US is the richest nation in history.

I do not believe that the nation of the US is one society. There's a society which includes the rulers of the US, and the rulers (legislative, executive, and/or fiscal) of most other nations, and they have no reason to give a shit about the poors, whether they are in Detroit or Dhaka.
posted by pompomtom at 6:50 AM on December 4, 2019

It's been my impression that use of ‘poor’ as a countable noun (‘a poor’, ‘the poors') is generally considered pejorative. At best it seems kind of dismissive and othering, even if it's being used ironically. Maybe it's just me.
posted by thedward at 9:01 AM on December 4, 2019

thedward - I read it as though he was using the rulers' voices, highlighting *their* disdain for the underclass.
posted by jpziller at 3:30 PM on December 4, 2019

Mod note: Maybe more to the point, echoing the language of oppressors and of shitty people in general to make the rhetorical point that their language sucks is a dicey move in mixed company. It may work fine in a small group where everybody knows where everybody's coming from, but any given conversation on MetaFilter let alone the internet in general isn't super likely to have that quality. Keep in mind who will hear you and who won't, and thus who is actually likely to be harmed, by that sort of choice.
posted by cortex (staff) at 3:42 PM on December 4, 2019 [2 favorites]

Even though I myself have used the p-word frequently, it is logically equivalent to using the n-word to mock slave owners. I.e., not great.
posted by klanawa at 1:16 PM on December 5, 2019

I apologise for not speaking American properly. Where I am it’s only used to emphasise the lack of empathy our rulers have for the general populace.
posted by pompomtom at 12:02 AM on December 9, 2019