From the Economist's Leader (their editorials) this week, which points to the linked article:
- Few ideas are more unshakable than the notion that the rich keep getting richer while ordinary folks fall ever further behind. The belief that capitalism is rigged to benefit the wealthy and punish the workers has shaped how millions view the world, whom they vote for and whom they shake their fists at. It has been a spur to political projects on both left and right, from the interventionism of Joe Biden to the populism of Donald Trump. But is it true?
Even as the suspicion of free markets has hardened, evidence for the argument that inequality is rising in the rich world has become flimsier. Wage gaps are shrinking. Since 2016 real weekly earnings for those at the bottom of America’s pay distribution have grown faster than those at the top. Since the covid-19 pandemic this wage compression has gone into overdrive; according to one estimate, it has been enough to reverse an extraordinary 40% of the pre-tax wage inequality that emerged during the previous 40 years. A blue-collar bonanza is under way.
Across the Atlantic, such trends are more nascent, but still apparent. In Britain wage growth has been healthier at the bottom of the jobs market; in continental Europe wage agreements are building in higher increases for the lower paid. Long-running trends in inequality are being questioned, too. A decade ago Thomas Piketty, a French economist, became a household name by arguing that it had surged. Now increasing weight is being given to research which finds that, after taxes and government transfers, American income inequality has barely increased since the 1960s.
All this can be discombobulating, not least when the prices you pay for food and energy have risen at an unusually fast pace. So ingrained is the idea that workers are suffering in today’s world that claiming otherwise is almost heretical; the dissenting inequality research has sparked an ill-tempered debate among economists.
To understand what is going on, it helps to consider that the blue-collar bonanza is not just an artefact of the statistics: it makes intuitive sense, too. As we explain this week, three forces that shape labour markets—demand, demography and digitisation—have each shifted in ways that benefit workers.
This is why I fucking hate The Economist: "Hey, Siri - what does 'artificial intelligence' for 'less skilled workers' actually look like?" Meanwhile, actual economists have been debating the actual cause of this massive wage shift and its long-term implications: It's pretty neat how The Economist starts by going ackshully, it started in 2016 and is somehow related to AI which proves Piketty and Graeber wrong dhyuk dhuk When the reality of the situation is - A paralyzed federal government was taken advantage of wholesale in 2020 to provide an absolute liberal wet dream of pork barrel projects - that then rolled into a Democratic administration with effectively zero legacy programs or employees thanks to Trump hollowing everything out - followed by a massive groundswell of labor frustrations with the status quo when it was revealed that 70% of the workforce could stay home without impacting productivity at all - while the other 30% decided that if they were going to be called "essential workers" they might as well get fucking paid like it Hey, Economist! Say something stupid! Holy shit I'm sure they never thought they needed to do that before! It's not like every employee turnover in a skilled position costs the equivalent of six months' labor to fill! Surely this must be somehow related to the Trump tax cuts, right? What blows.my.mind. is that this is clearly and obviously a conscious policy choice. But since the choice is to turn away from Reaganomics/Thatcherism, The Economist needs to make it about AI somehow.Artificial intelligence (ai) is giving workers, particularly less skilled ones, a productivity boost, which could lead to higher wages, too.
A survey of small American companies found that more than 90% seek to retain employees if possible.
The interesting part to me is a) seeing the massive decrease in inequality realised in the past years, and b) ruminating on the exact causes. I'll give you the Economist is not very good at the latter, but I'd be surprised if the largest determinant in this blue collar revival is policy, and not "covid / russia and its implications". By which I mean: covid caused large disruptions in global manufacturing and massive shifts in (the willingness to do) blue collar work. The Russian invasion caused energy insecurity which pushed inflation even further than the labor troubles could. I get that the U.S., with the benefit of hindsight, has made the right choices to navigate these unprecedented times, but isn't that secondary to the larger economic forces at play here?What blows.my.mind. is that this is clearly and obviously a conscious policy choice.
Speaking from my haughty perch of hundreds of economics charts per day, the largest determinant of blue collar revival is policy. To be (undeservedly) charitable towards The Economist, this is likely less obvious in Europe. Europe has long had a better social safety net, a higher wage standard and a more equitable tax structure. The Marshall Plan, fundamentally, rebuilt Europe's economy the way the Democratic Party would shape America if the Republicans weren't in the way. Europe's COVID policies, as a result, largely reflected a tepid enhancement of the status quo because the status quo was almost good enough... at least when compared to hypercapitalist economies like America's. American COVID policies, on the other hand, were "quick, Republicans are sleeping, pass massive social reforms" because there were (and are) plenty to pass. Do you remember walking into the gun section of Bass Pro Shops and not being titillated, not being amused, not being intimidated, not being agitated but being genuinely and truly awed? The sheer Americanness of it all left you speechless for several minutes. It was useful for me to see that reaction because frankly, it's the water I swim in. Preposterous amounts of gun culture has been a given going back to Lea Thompson with an AK-47. It's like that backpack you wore up the mountain - you don't truly realize how heavy it is until you take it off. Remember that feeling and recognize that's the way Americans feel when they learn about things like European healthcare. European college. European vacations. It's a fundamental, speechless recognition of a vast difference that has no supporting evidence for its existence beyond cultural choices. It's a horrified, irreversible recognition of a great wrong that you have no way to right. It's important to understand that COVID relief, for Americans, was a realization that the wrongs can be righted. It was discovering that shitty treatment was a choice. The minute you make more money sitting at home than you do driving a forklift? You're never driving a forklift for that much ever again. You could watch it in everyone's eyes. Families getting $700 a month just for being families - even though it was their own money, from their own tax credit, that they were getting anyway - the government sending them checks just for having kids felt like a dream. Bartenders recognizing that no, they're not going to get abused by drunks for $2 and tips ever again because clearly, that's a choice by their employer. We did a funny thing up here. We raised the wages on service staff from $2 to $15. And for a while, all the restaurant owners got salty and put things on the receipts telling you that you didn't have to tip. And you know what? After COVID? The little receipt notes went away and the tips stayed the same. Do people eat less at restaurants? Yeah. Are the restaurants doing fine? Yeah. And when you do go? Your service is hella better. Go figure. as Quatrarius points out, there's a massive difference between being "underpaid" and being "grossly underpaid." By almost all metrics, American productivity is on trend or better compared to where we were prior to COVID. By almost all metrics, Europe is not. This is not because Europe is a bunch of laggards, it's because Europe had less room for improvement. Energy insecurity? Yeah for Europe. The US and Canada are the 4th and 5th largest oil exporters in the world and the 3rd, Iraq, is effectively a vassal state. What we got was the CHIPs act and the American Rescue Plan, both of which were tailor-made to grow blue-collar industry in red states. From 2010 to 2020 I got emails telling me how to "offshore" my production. Since 2021 I have been getting emails telling me how to "onshore" or "nearshore" my production. There's a real and deserved recognition that the United States fundamentally gave up its position as a manufacturing leader in exchange for the financialization of American industry. There will be a real and deserved recognition that the United States fuckn' up and decided not to do that anymore in 2021. Partly? That's China being too expensive. Partly? That's global polarization and the unpredictability of trade in a world where history has decidedly not ended. But mostly it's the result of the Republican Party giving up any attempts whatsoever to throw sops at business once Paul Ryan left, leaving the Democrats to go Remember the '50s? Worked out pretty well for you guys, right? Yeah taxes were high but so were profits and you had no problem attracting labor because the government made sure everyone was mostly okay most of the time. How would you like the '50s again? 'cuz we're thinking errbody loves the '50s, unless you were black, but that's a whole other issue we'll sidestep for now. So how 'bout the '50s? It is fair and accurate to recognize the Trump administration as a kernel panic of the American operating system. Things have not fully reset but the vacancy of an empty stack was rapidly filled by Democrats, who care about wonky shit more than gay penguins in children's books. The Economist should know this. I want to believe they see the same charts I do. I want to believe they have better sources of information than I do. But they are not demonstrating it.
That's a good way of looking at it. I might've talked about this before, but when I was working with Americans for a project I did in 2020 it was an...interesting look into the hypercapitalist abyss. Someone on the team having a breakdown over their health because of its ties to job security was quite the a Bass Pro Shop moment, so to speak. I distinctly remember the Americans being annoyed at me and my colleague being fuck'n gone AGAIN every 8 weeks or so because we have reasonable PTO (in my case a slightly above average of 30 days/yr) that we reasonably use, during which we reasonably disappear off the face of the earth. Their annoyance was frequent but also brief in a - I now realize - "I don't want to think about this for too long, let's go discuss something else" kinda way. It might've just hurt too much in exactly the way you descibe. Did you know we invented a term for that?. I'm glad you're catching up on worker's rights and you're right, I probably underestimate the leaps and bounds that have been made since I last visited the other side of the pond. I think we, as far as labour go, only got two things out of the pandemic: immense pressure on blue collar work (with very strong calls for a minimum wage raise) and a seemingly irreversible increase in the number of WFH days to two or three for most white collar work. Nothing earth-shattering - for me it seems energy insecurity and inflation has had a bigger impact on society than labour reforms. I do now wonder what impact Brexit had on all of this, and thus also on the Economist's lukewarm take. It seems to me they basically slid further back the past years. They're not just geographically in between the EU and US, economically too, with classism thrown in for extra spice. It's a fundamental, speechless recognition of a vast difference that has no supporting evidence for its existence beyond cultural choices. It's a horrified, irreversible recognition of a great wrong that you have no way to right.
This is not because Europe is a bunch of laggards, it's because Europe had less room for improvement.
I haven't been to Europe or the UK in 30 years. I have only second hand data. But the second hand data I have on the UK? Is toe-curling. We've got nursing problems, the UK's got nursing problems. Back in April when the UK had a general nursing strike I remember looking up their hours and going "what a bunch of pussies" because NHS nurses are, like, 2/3rds time compared to typical American shifts. But then I remember looking at their wages and going holy fucking shit because a US nurse makes like double, 2.5x as much as a British nurse. You'll put up with a lot when you're being paid through the nose. When you're being ripped off? The UK has been unfavorably compared to Poland for a while now. Lately it's being unfavorably compared to the former East Germany. The fundamental approach of Brexit was to stiff-upper-lip it through the challenges which is probably great for the City of London? but the thing is, if you don't take care of your least, your least become your people. I have gotten the sense that culturally, the British are comfortable with inequality. Culturally, too many Americans feel the same... but it's something we fight about. So much of British culture, at least what gets exported over here, is about knowing and/or finding your place in a hierarchical society. American culture, if anything, is about overturning it.
I’m sure a proper pole would be offended to be compared to the UK. Poland is growing, getting stronger more relevant in the world while the UK Is in full on decline. It’s not quite South Africa but is getting closer every day. I should visit soon before it really falls apart.
update on the Q economic index: I'm making 21 dollars per billable hour now doing VHR work and will be making around 22-23 in the new year, but the company i have been contracting for is collapsing due to being dogshit and losing their ssa contract also i have to bill my time so they nickel and dime me because i get paid per hearing and for up to 15 minutes in between, so depending on how much gap there is i get screwed out of money also because the company is shit and the middleman nature of it is a scam, I've probably averaged less than 8 hours a week which is maddening. I've talked to other VHRs and this is just normal. they fuck everybody over on hours. but no kidding, making 10 dollars more an hour almost makes it bearable. I can't pay rent though but like i barely could before with working four times the hours there's a new company coming in in the new year and I'm leaning hard on them to try to get more hours so maybe with a little luck I'll be able to break even soon. the judges during the disability hearings dismiss earnings bigger than mine as "not substantial gainful activity" now that i write it all out i guess I'm not doing that good
but like, i see job listings i applied for 2 years ago still open. my sister has been dealing with awful management at HER massage/spa receptionist job. somehow getting fucked by a faceless company of rentseekers serfing me out to the SSA still feels better than getting micromanaged by a small business tyrant having said that i would love to have a real, nonfake job, where your coworkers and govt liaisons aren't baffled by your company's incompetence in scheduling and communication. i know we have some michigan business owners on hubski - y'all hiring? I'm good at doing real work at fake jobs and fake work at real jobs so my bases are covered. forget everything i said about the small business thing earlier
How good are you at being present 40 hrs a week plus 16 hours mandatory overtime from 230-11 every day? Boeing in Seattle is hiring for like 16-22/hr that will pay for gas and a car to live in. Maybe a shared room after overtime. Brown Bear car wash is paying 22 but the hours probably under 32.