Stay-at-home dads explains 2 million of this article's main statistic. So even if the remaining 5 million of the "needs work", the employment number is closer to 89%.
Edit: there's a reason economists usually use "looking for work" for unemployment numbers: it's really hard to gauge why people don't look for work.
This is something that I'm worried about. I'm three years out of college and in my (very small) group of friends, two of us have full time ccorporate (middle class) jobs, one is starting his second masters degree, one is a part time personal trainer, and one is doing seasonal work at a farm. All of them have college degrees and all of them express interest in entrepreneurship and start-up culture. I think there is a problem with these guys (and myself) of being content with a bottom of the ladder corporate job. We all feel like we should be having more of an impact on our world and our jobs. I can't decide if this is a misplaced feeling of entitlement or a legitimate want of a "good" job that provides professional satisfaction.
I remember leaving uni in 2003, for 3-5 years everyone had shitty jobs, bottom of the ladder and then it suddenly just changed.
The first few years of work young people are usually a complete mixed bag, even if gifted. They need quite a lot of baby-sitting, tolerance and guidance from co-workers and bosses and make silly mistakes and usually are quite poor at communicating.
It's all part of growing up. I can look back and realise that in myself back then.
And then it changes and you start getting promotions and then it's all different.
So don't judge anything by where you all are now, give it another 2 or 3 years. I know it sounds trite and patronizing, but it's true.
It's one of the reasons I'm always surprised pg, Thiel, etc. pushed for people to start companies straight out of college or even while in college. Young people are often so utterly clueless that I think a lot of the mistakes they make could just be fixed by them working for someone else for a little bit, even 6 months. As well solving the tendency for hip young entrepreneurs to make incredibly basic HR mistakes.
Unless they luck out and find themselves amidst a housing bubble circa 2006 where everyone and their brother is employed in constructing real estate, investing in real estateo, transacting in real estate on commission basis, underwriting mortgages for real estate or pitching dubious mortgages for others to buy real estate, there's not a lot of opportunities for under-educated males nowadays.
There are many many things wrong with the article (elementary mistakes that a Harvard economist should not have made), but considering that it is basically a puff piece for his book, I'm not surprised in the slightest.
The article is typical WSJ garbage, gets cause and effect confused, makes comical, out-of-touch assumptions and, as usual, places the burden and fault on NEETs.
Note that the article has the word "women" in it only twice (and in an inconsequential sentence); and the word "female" 0 times.
Discussing the unemployment levels of men in America without taking into account the vast sociological changes involving the genders in the last 20-30 years e.g. a lot more women in the workforce, societal expectations of more parenting involvement from men, etc.) is not much use unless you are trying on some sort of strange shaming tactic on men. FWIW I don't think the author is doing this intentionally.
Vast majority of these "unworking men" are employed in the underground economy, working under the table, which provides a subsistence living. Perhaps only 10% are true NEETs with recognized disabilities/parents wealthy enough to carry them.
I don't see it as a good or a bad thing - society has reorganized itself and there is no place for these people anymore. With greater and greater levels of automation the problem is only going to get worse. 30% of people find it hard to do math beyond 8th grade, where would they fit in the modern economy? Furthermore if you start from the very bottom, some people will struggle and succeed, but most will give up - whats the point anyway? Living a minimalist lifestyle supporting your own limited needs beats working for Amazon and keeling over at 35 with a heart attack.
Seems as if success and fulfillment in modern society is on the edges of the distribution - either you're a minimalistic bum or balls to the wall businessman.
I'm really disappointed that the author didn't even try to analyze why these people weren't working and instead just went into a rant about how they're destroying society by living lives of pure pleasure.
How many are stay-at-home dads? How many are living with wealthy parents vs. how many are on welfare? How many of them were looking for work but eventually gave up after their efforts proved fruitless? How many of them have actual, legitimate disabilities?
These are all interesting questions. And for actual disabilities, I don't think living with cystic fibrosis and being unable to work is the life of pleasure the author thinks it is.
The recent employment report was dubbed solid by many economists. 94,391,000 Americans not in the workforce is not good no matter how you try to slice or spin it !
I have the impression the article got the cause and effect ordering confused.
It states for example on one paragraph, that the men not working, exacerbate family breakdown.
As someone in my 28s having lots of problems like in the article, I can personally claim, that for me, and all my friends, it is the other way around:
Creating a family in the current society, is almost impossible, two incomes is necessary, thus reducing time available to take care of kids, divorce is too easy, making it too risky for men (in my country, 72% of "no-fault" divorces were initiated by women for example), young women are not interested in serious relationships (instead they are interested in having fun, one-night stands, drinking, sex, etc...) because it gets in the way of having a career.
So, because of all this, starting a family, even if you really, really want it, is excessively hard.
So... why bother? Why put a massive effort to work your ass off, if you won't have anything to do with the money?
Alright, you go and work 60 hours/week, save money... and now what? Buy a house, to live in it alone? Buy a car, that doesn't fit your parents garage that has their car already? Or buy videogames that you can't play because you work 60 hours/week?
It is logical, that the thing to be done, is do the mininum necessary to support a loner lifestyle, this is not my case (far from it), but I've met people where their current simple non-creative jobs can pay for international trips, restaurants and prostitutes, but are still too far from supporting a family, so... why not just stay where they are, and enjoy international trips, restaurants and prostitutes? Why work so hard to not have any leisure time, if the result would be reach old age alone, rich, and with nothing to spend that money with and no friends?
EDIT: people are making some assumptions about me and understanding this wrong. So to clear things up:
1. I am more of a exception guy, I don't like one night stands and whatnot, and don't go to bars or clubs, I look for women in my social circle, that is academia, workplaces (related to tech, always), and church. The women I described is what I saw there, maybe women elsewhere are different.
2. I am from Brazil, sometimes I forget how confortable life in US is in general, many people replied that you don't need two-person income if you have a non-luxurious life, here in Brazil, the US "middle-class" life, of having two cars for example, is only for rich people, most of the population can't afford even a single car (I for example don't own a car, even if I summed all my income of the last 5 years, I would still not have enough for a car), here two-person income is necessary even if you are going to live in a favela shack with walls made of discarded wood and roof tiles, I just assumed this was the case for most of US too. I would love some detailed information if that is true, or not.
3. From what I've heard, housing, healthcare, and some other basic necessities are very expensive in US in general, housing is very expensive in Brazil too, even if bad quality "supermarket" food is cheap, you can't start a family with a single income if you can't afford housing and healthcare, for example if your kids get sick, how you will pay for it? Even here in Brazil where the state gives completely free healthcare, people still consider it too risky to not have healthcare money, sometimes your kid need something now and you don't have time to wait the state.
4. Some people reading the text are assuming I am a NEET myself... that is not the case, I just find myself seriously tempted to do so though (because I am trying, very hard, to get money to start a family, yet I never got a legal job, and so far my total net worth is negative, some months I paid more in interest than the monthly mininum wage)
> young women are not interested in serious relationships (instead they are interested in having fun, one-night stands, drinking, sex, etc...) because it gets in the way of having a career
im guessing you dont know any young women cause this is absurd
We moved from the coasts to Iowa. I got a 14% salary bump. My wife got a 41% salary bump.
We have been socking away savings non-stop, just bought a house, and all of a sudden can afford vacations, furniture... Everything.
Life is better here, all around. Our commute dropped from a 1.5 hr drive to a 20m walk (5m if we drive). We went from shelling out $3,000 a month for a crappy one bedroom with no space to paying $1500 for a giant house.
We can walk to a swanky wine bar, and afford drinks rather than drive 45m to one where we just split a glass and grimace at the bill.
We can eat out, we can travel, the schools are good, the crime is non-existent, and our backyard has a trailhead in it!
Yeah, I always kinda laugh at people complaining about price of housing on the coasts. They would be able to buy a small mansion at the prices they are talking about if they looked in the Midwest / Texas
> We can walk to a swanky wine bar, and afford drinks rather than drive 45m to one where we just split a glass and grimace at the bill.
I didn't even know the regional differences in drink prices were so pronounced until I was talking on the phone with my cousin a few months ago. I live in Dallas, and she lives in NYC. I was talking about how I was about to go out for drinks with friends, and I ended up mentioning that how most of the bars here have one night a week where wells (and, at some places, U-call-its) are under $3. Her mind was blown. She didn't even know drinks that cheap were a thing anywhere.
That was one more entry in the "why I'll never live in a place like NYC" list.
There absolutely are places even in Manhattan where you can get at least beer for pretty cheap, like $3 - $4, depending on the night. Sure, there's more than enough expensive cocktail places around, but there's enough options for those not looking to blow too much on drinks.
On the other hand, you'll be somewhere else in the world and sweet corn just won't ever appeal to you, because you'll look at it and refuse to pay $1/ear for stuff that's probably been sitting around for days.
> We can walk to a swanky wine bar, and afford drinks rather than drive 45m to one
To be fair -- if you live in Iowa, it is much more likely to be the other way round. People drive everywhere in the US countryside and there are no sidewalks or even unpaved foot-paths.
I'm not sure if that's true for the U.S. I feel like peoples' standards have just gotten a lot higher.
I grew up in an upper middle class D.C. suburb. My parents and my brother and I lived in an 1,100 square foot house and had one car. This was typical 25 years ago. My peer group these days makes substantially more money than my dad did back then, and might live in a 1,000 square foot apartment for just two people, and still talk about how expensive it is to start a family. It seems like the minimum standard now is being able to afford a 2,000 square foot house and private school for the kids.
I like how many women are attacking this comment. This is literally what feminists fought for. Equality in the workforce. You no longer hear women say "I just need to get my MRS degree." Instead, women are more career focused this day and age. I think this comment, while it can come off as sexist, is partially correct. The 1950's notion of gender roles has somewhat shifted toward equality. It's extremely difficult to start a family if both partners are working 60 hrs a week.
the parts people are taking issue with are the ridiculous generalizations that young women aren't interested in serious relationships, etc. the parent comment's perspective comes off as judgemental and paternalistic, especially "I don't like one night stands and whatnot, and don't go to bars or clubs" okay? i have a hard time believing that no women in brazil want a stable relationship and a family.
it's also possible to go out to clubs, have one night stands, and want a stable relationship and family too!! imagine that.
If you get labelled as "PUA" or "MRA" or "MTGOW" or "KIA" or "GG" or some other labels I see thrown around, people seemly are more quick to dismiss whatever you wrote for any reason.
Young women get a lot of offers, they of course have to tell 99% of them that they are not interested - and to avoid hurting the guy's feelings, best to say you are against the whole idea of a relationship.
Right, so you can conclude three things. She isn't currently in a relationship, and isn't actually interested in one, or she is looking for something "better".
So, he should be figuring out how to keep these girls in his social circle, rather than considering it a rejection. Guys have time on their side, and maintaining contact with people has a way of moving them closer. Sadly, like anything else "playing the game" is how you win. Getting to know people has a way of overriding the initial physical attraction. Of course, it can go the other way too, physically attractive women can frequently be socially disgusting princesses.
If you look for statistics on how women have the upper-hand in term of choice of mate until some age in their thirties (varies by country/state) and the balance then brutally shifts the other way... then you will find plenty. sorry no time to look for references, but really this should be common knowledge
For women its gone up nearly 5 years in the last 25. A 28 Y/O guy is probably dating women younger than the average marriage age at this point. Especially true, if those women happen to be college educated.
Of course, the "I'm not looking for a serious relationship" line is being used like "lets be friends". AKA "Your nice, but I'm looking for someone higher up the mating hierarchy."
Frankly, if I were in my 20's, single, and got a line like this from a women, unless it came with some form of explicit rejection, I would consider it a bonus. A single guy in his 20s should be enjoying his freedom, and having an bunch of casual date/etc partners shouldn't be viewed as a problem. Guys have time on their side, and that starts to become really apparent in the 30's.
> Creating a family in the current society, is almost impossible, two incomes is necessary
No, it's really not. If one wants to live a 1950s-style life (e.g. a single car, no cable, no Internet, entertainment mostly playing outdoor sports, squeezing an entire family into under 800 square feet, eating mostly canned foods, children going to public school, each member of the family only owning a few changes of clothes) then one can manage to support a family on a single income.
But if one wants to have a modern lifestyle, with a big house, a bathroom for each member of the family, eating out, electronic entertainments, big closets &c. — then yeah, it'll cost a lot.
I am from Brazil. The things you described as 1950 are the normal here, and do require two incomes.
For example: the average rent for a tiny apartment in são Paulo (city that has 200.000 homeless households) is about the same as the minimum wage. thus you need someone to pay only the rent, and someone else to buy food, clothes, and so on.
If there are no incentives (or in reality - negative incentives) for men to fulfill their traditional roles in society then why should men do that?
Financially - you're absolutely right, you're not getting anywhere in life on one income. To make any real money you have to really bust your ass as an entrepreneur but lets get real - vast majority of people don't have the motivation, discipline and desperation to do that.
Marriage is a pretty much a scam for men - a voluntary agreement to be a beast of burden. 80% of men shouldn't be married (at least not to people they are).
The thing is that young men gravitating toward that, always has been the case, and they change their behaviour when they want a wife.
But now, they have no incentive to change that behaviour, in fact, the whole point of the article is talking about such behaviour, thus why I don't mention it explicitly on my comment, my whole comment is about why they keep that behaviour, thus mentioning it again would be redundant.
>divorce is too easy, making it too risky for men (in my country, 72% of "no-fault" divorces were initiated by women for example)
divorce is "too easy". The only thing this sentence says is that divorce happens frequently and that's an inherent bad thing. The only implied solution to this problem of divorce being "too easy" to initiate would be to somehow make it more difficult for women to divorce their husbands... an incredibly disturbing sentiment.
> young women are not interested in serious relationships (instead they are interested in having fun, one-night stands, drinking, sex, etc...)
bog-standard misogyny that reads like a post off of /r9k/, totally anecdotal and paints all young women as stupid and sexually promiscuous.
Great post and I actually agree with you on the "divorce is too easy" point - I don't think there is anything wrong with it being easy to divorce, however I think the real issue is that men get the short end of the stick. Internet gave us transparency and we know it. Men stopped marrying, so the government decided to treat live in arrangements as marriage in an attempt to catch-up. Hilarious if it wasn't so absurd.
As for "not interested in serious relationships" I think the posters anecdotes are valid and there is no misogyny on his part. If anything - I'd recommend the OP to embrace the new normal and not stress about it.
> Men stopped marrying, so the government decided to treat live in arrangements as marriage in an attempt to catch-up. Hilarious if it wasn't so absurd.
You're talking about common-law marriage, which is actually a very old institution. The Supreme Court approved its validity in 1877. It also still, in most states that still have it, requires that both members of the couple involved declare themselves to be married and/or present themselves to the community as a married couple.
It's actually starting to go away, even: Pennsylvania banned it taking effect in 2005, and Alabama will abolish it effective with the beginning of next year.
People resort to -ism shaming tactics because they aren't comfortable discussing the dirty parts of human nature; they'd rather just silence the conversation.
Saying that women are not interested in serious dating isn't sexist, although it is an oversimplification of a real issue.
In 2012, 34 percent more women than men graduated from U.S. colleges. Today, the odds of a college graduate marrying a non-graduate are lower than at any point since the 1950s. Hence, there are probably more women not engaging in serious relationships.
Wages must rise. They have not risen for nearly four decades in real terms. Major life expenses are unaffordable to all but the wealthy, such as housing.
This single fact explains lots of things in the present. It appears we're trapped in a local maximum while journalists and politicians blithely ignore the plateauing of growth, wages and technology outside of computation.
If you think everything is getting better and better, you've taken your eyes off the road for a while now.
I would say that housing should be less expensive. These prices are impossible even with a good salary. You need two good salaries to buy one house and still have money for your other expenses.
Agreed, but your local governments will not let that happen because they want your money. They fight every single day to maintain a false market value of your house, basing its value simply upon the few percent who are willing or able to pay an ever upwards higher prices. A value based upon construction labor rates that skyrocket because of their daily increasing mandated certifications, insurances and fees and taxes and laws, and a value based on construction materials subject to more of their certifications and upwards marching specifications (a 5 inch well for four people? while water usage per person is halved during the same period?). And finally, by them "adding taxable value" to your property (at your cost), for example, by forcing new massively expensive sewer and water systems, often, because historically they permitted very small lots. When those lots have sanitary problems and the land value falls low, they won't let go of the tax money from those properties, instead, charging everyone to upgrade the entire infrastructure at massive costs (for which they then get an admin fee forever, as well as keeping the taxes). Finally, outsourcing the infra. services to a third party, at what, cost plus? No, housing will never get cheaper.
Except the government has basically made it their priority to prop up the existing housing prices as much as possible, and keep it that way. For every young person desperate for an affordable house, there is an older person that is counting on their house's current value to be able to retire.
I really don't understand how that works. You can't (reasonably) sell the siding and plumbing in your house for groceries and medical bills... So how do people use their house for retirement (you know besides not paying rent or mortgage)?
Via a HELOC or a reverse mortgage, which becomes a thing for people 70 and older.
Alternatively, selling to cash out and move to some spot favored by American retirees, such as Costa Rica or Palma de Mallorca, where the dollar (as well as Social Security check) goes much further.
It is a mirage. You think you are making money but you cannot use it. Unless you retire in an inexpensive place. Or die. You will have a lot of money when you die and can sell your house.
What I don't understand is why the government isn't building housing to sell. You'd put workers back to work, and prevent some of these crazy expensive prices. It seems like all developers want to build are mcmansions and luxury apartments they can sell for tremendous profits. Where are the cheap starter homes and condos?
The price tag on the final construction is defined by three things - cost of land, cost of labor, and cost or building materials (which includes things such as equipment rentals). Where would a government construction company experience massive price advantage that cannot be replicated by a private entity? Their cost of equipment is same as everybody else's, their labor costs are probably higher due to extra layers of bureaucracy and stronger union contracts.
There's a lot of city owned land in the Bay Area, that would effectively cost the government nothing. Not to mention abandoned lots that should face stiff liens, and eventual seizure if nothing is done about it. Then they contract with the same builders that the private sector uses. But instead of building apartments with granite countertops and bathtubs with water jets, they use simple finishings (or just don't finish things at all, like in my apartment, the floor is polished concrete and the ceilings reveal the structural elements).
The primary reason for housing shortage is not real estate developer laziness and apathy. If Vegas, Florida or empty Chinese towns taught us anything, developers will build given a chance to appropriate a large budget or a cheap loan.
How much of that city owned land is zoned residential, has no building restrictions and is set up for electricity, gas, water and roads? Most developers also present a choice of finishings, if you're committing to a brand-new construction, where one can go from custom Italian marble to basically nothing. KB Homes and Lennar are particularly known for no-frills simpler-designs cheaper units, check out South or East San Jose and anywhere in Morgan Hill / Gilroy vicinity.
I said this somewhere else in this thread but just move to the Midwest. There is plenty of space and depending on where you want to live houses can be super cheap.
Far too many race and culture issues in the Midwest IMO. Not to mention lack of software jobs & economy propped up by ag cycles & federal farm bills. Lots of articles about the issues in rural America, won't repeat them here.
Much rather live in Seattle, NYC, Boston, etc. Much better living, profoundly more jobs (both in number and variety), far better culture, better politics, much more environmentally friendly.
I live and work in the suburbs of Dallas. I'm also an openly LGBT Jew, and nobody gives me any problem. And the large Asian populations (Chinese, Indian, and Korean especially) in the suburbs here shows that lots of people of other races choose to live here over other places in the country.
It's debatable over whether or not North Texas counts as "the midwest" (really, Texas can be divided into five sections, which go into separate regions), but I like to think of it as such. We're in Tornado Alley, and most of Dallas feels like a typical middle-American suburb.
There are many problems with moving to the Midwest. It's like someone suggesting moving to Puerto Rico to save on money since a place with a vastly different culture is not simply interchangeable (and I'm saying this as someone who has lived all over the U.S.).
Edit: for the downvotes lets remember that Puerto Rico is part of the U.S. and that Puerto Ricans are American (i.e. estadounidense).
You can have most of the amenities of coastal urban life in places like Chicago; which even has its own coast and doesn't have the outrageous COL that places like San Francisco, LA, or NYC have. Sure you're not going to make the same crazy salaries, but you're also not spending 5k for a 1br apartment in the Mission
My peer group just out of college in consulting paid $1000 - $1600 for nice places. Low end of the range would be shared with 2-3 others and maybe 40 min outside the loop. High-end would be for a 1BR 15-20 min out. You could also live in West Loop (think lofts) in brand new places for even less
I imagine that heating and electric adds a couple hundred though? (in CA I pay about $20/month for gas/electric, but remember paying hundreds when I lived back east).
I'm rarely home and have a small studio apartment. I don't have AC (most homes I know don't have it in Oakland), and there's almost no point in running fans when I'm gone.
That's my point. I could leave my house for a month, shut off everything that uses electricity and gas, and still have to pay more than twice what you pay just in connection charges. Do utilities in California just not charge flat rates for connections?
I've also lived all over the US, and the culture difference between NY or SF and nowhere, ID is, many times, less than the difference can be between many places in the US and Canada.
I suppose a lot of that depends on your ethnic background. I've been to places and been like, "woah I just stepped in to the 1950s." Certainly not everywhere (Chicago comes to mind) are like this, but again Chicago is also a pretty expensive city.
Even if house prices were not so inflated wages would still be stagnant. That's a much bigger problem for the economy than house prices because it is harder to solve for. Reasonable house prices are just a solution to the most immediate problem facing us today, that is all.
Judging by the downvotes, many people are totally in denial about this. It is pathetic.
I'm a red blood tooth and nail capitalist. If I say wage stagnation is real you had better believe it.
It is not that I don't believe non-wage compensation exists, it is that the same pattern exists in most other Western countries, not just America. It tends to begin a decade or so later in my own country and others (explained by us playing economic catch-up), but it is the same pattern. You can't explain this with a little redistribution here or there. Remember we're talking about (in this article's context) mostly younger people bearing the brunt of this, so it is not as if they are incurring major medical bills on average, thereby not requiring that health subsidy, so that is a hypothetical rather than a fact.
I suspect this is all better explained by lack of technological change (ex-computation) with logical follow through in the growth statistics and wages.
Let me give you an anecdote. Most graduated students from universities make less income per year than I did from my summer job. Read that twice. And I wasn't making much more than min wage at the time.
That can partly be explained by oversupply, but fundamentally this is such a contradiction to the education/wealth meme (go to Yale or go to Jail, you don't want to get a job at Mikky-Ds) that it has slipped under most older people's radar altogether.
The fact is actually that most college students would have been better off working minimum wage, living with their parents. They would be in a considerably better position today if that had taken that advice.
This is changing rapidly, more people are waking up to the realities of the job markets.
There is no longer any point in going to college. The jobs just don't pay enough for it to make any sense. I went to an elite university and I'm saying it. People who have the good fortune to have rich parents should not be counted as part of the statistics because there is a limit to the number of people who can work internships from Dad's townhouse in the most expensive cities in the world.
You adjust ROI for cost of living and you quickly discover any students in 'good jobs' have wealthy parents capable of covering their living expenses in places like London, New York.
This was not always the case, but it is now.
Today's intelligent student is better off starting their own company. Not because it is easy or likely to succeed, but because they are all out of options.
Do you have data on total compensation per hour in other countries, or are you just relaying anecdotes?
I suspect this is all better explained by lack of technological change (ex-computation) with logical follow through in the growth statistics and wages.
In that case, why has the US experienced significant compensation growth? Does the US have technology that they don't share with Europe?
Remember we're talking about (in this article's context) mostly younger people bearing the brunt of this, so it is not as if they are incurring major medical bills on average, thereby not requiring that health subsidy, so that is a hypothetical rather than a fact.
A lot of non-wage compensation is structured as wealth redistribution towards politically favored classes (e.g. old people) - that's the whole point. So what?
It sounds like your real complaint that older voters have hijacked the mechanism of government to steal from the young. (See also cost of living in NIMBY-filled places like NYC and London.)
> It sounds like your real complaint that older voters have hijacked the mechanism of government to steal from the young. (See also cost of living in NIMBY-filled places like NYC and London.)
That sure is a major part of my complaint yeah.
You probably already know this but that is something Niall Ferguson in his Reith lectures several years ago referred to as the breakdown of Burke's Social Contract, that inter-generational warfare will ultimately turn young people to the right wing whether they like it or not (four years after that claim, we witness the surge of alt-right, chan culture going from random to the right, the ever broader resonance of neoreactionary thinking). At some point I think these social critiques of their parent's religion (constantly reliving the 60s rebellion against their parents) convert to something about political economy and this all goes supernova. I don't think Trump is that point, this is a trend that is just beginning. I think the implosion of social democracy is on the way. Briefly, it is an end to migrants, healthcare and pensions (and military subsidies for us Euros). Instead resurgent tribalism, provoked and maintained by the Net and a total pull down of all those leftist memes about equality, oh the humanity, colonialism and so on. Basically from the perspective of the NYT it is the End Times. Hello and welcome back to the Victorian Era (2.0)!
All this is a symptom rather than a cause. Generational rebellion is quite normal after all. A total reinterpretation of history requires more of an explanation. That is what happens when the foundations come into question. Egalitarianism and universal thinking (as personified by Thomas Friedman) tends to flourish in times of peace and wealth, aristocracy when peace and wealth are in question. This is good news for Silicon Valley actually. And DARPA.
That means the cause is a lack of true economic growth. All economic growth must ultimately source from technological progress. The relationship between the technological world -> economic world -> social world -> political world is complicated but it exists, it is the bedrock of all.
Notice how money is free at 0% interest. Notice serious drops in oil price. Notice hordes of well educated students with no money. Notice lack of inflation. Notice the pervasive underemployment. The economy has lost its mojo. All those signs should traditionally have led to explosive economic growth, startup formation but they ain't. The economy has lost its mojo in some structural way and the levers at the Fed and ECB aren't responding except with the sound of grinding gears.
I think your graph from the Fed tells us more about the Fed than real incomes. Compensation! Total fudge factor when they are getting ridden for not producing results I'm sure.
>> I suspect this is all better explained by lack of technological change (ex-computation) with logical follow through in the growth statistics and wages.
> In that case, why has the US experienced significant compensation growth? Does the US have technology that they don't share with Europe?
First, I cannot prove this without expertise in forensic accounting but I'll tell you what I suspect to be true. I realize that isn't great but I don't know there's something better when talking at this kind of scale.
It is mostly demotic accounting fraud. Europe has already been there and done that with social democratic policy. There are some outliers but it is mostly fraud - by which I mean magick money from nowhere. Your compensation is coming from redistributive policies that fuck the future for short term political gains. As is tradition. A voucher for marked up dental work and broken roads.
The thing with those compensations is that you can make them seem infinite in scope, but tweak the parameters such that people don't actually receive a genuine benefit.
In my country we have free healthcare. You will also die on the waiting list before it materializes so people pay twice (taxed + also get private insurance). In the UK across the water pensioners appear to have a good deal but everybody suspects the entitlements aren't going to exist when they are called upon. I hear something similar is going on with SS in the USA. Entitlements are part real initially (borrowed perhaps from infrastructure funds or Fort Knox, somewhere where the loss isn't obvious for a long time) but it is ultimately a hypothetical.
Similar thing goes for corporate compensation. You surely know most of that is pure fraud. Dental work valued at 250 bucks when it is really worth 50 on the market, that kind of thing, only on an industrial scales across all the institutions.
We ought to thinking of this like a value investor. They like to see hard cold cash dividends. That guarantees something is working, right? And the absence of that... traditionally is either serious growth or serious bullshit.
> Do you have data on total compensation per hour in other countries, or are you just relaying anecdotes?
Total comp per hour I couldn't find anywhere (probably difficult as hell to calculate, esp. historically) but these graphs sum up the picture I'm trying to relay.
You'll rightfully complain compensation is missing from the graphs. Then again I would argue compensation was missing from the data for most of historical time. What was the value of a working housewife who converted staples into nutritious meals? That is a kind of compensation just as healthcare from a government is. Maybe if people had the time to prepare decent meals and relax for a bit instead of being harried by bills and rent they would be less unfit and thereby...
Alright. I was having a 'people are wrong on the internet' moment.
What does get my goat though is that a comment can spin off a hundred replies and the initial comment is invisible. I've seen it happen a few times now to other people. It is controversy/mystery and then a back and forth without context and I find myself highlighting the initial comments to discover what actually happened.
It even happens to the OP's initial statement! Blank and a slew of comments. That might be the flamewar detector in action though.
That seems like a flaw in the algorithm. If the thread is worth reading instead of a flamewar then surely the initial comment ought to be (more likely to be) visible for reading?
I get that the initial comment could be nonsensical and the offspring of it could be still useful but it seems weird since those replies wouldn't have happened without it. You've heard the saying that it is easier to get good information by saying something wrong on the Net and being corrected, rather than by requesting said information. Seems like the present algorithm goes against a 'Law of the Internet'.
The recent employment report was dubbed as solid by many mainstream economist. 94,391,000 were not in the work force. That's not good no matter how you try to slice or spin it !
Early one morning I got a fare at a house at the southern edge of Chandler. It was a young family - Man, Woman, Infant. They were going to the airport...
The man said that he'd tried driving for the taxi company, but it didn't work for him. I had various other passengers who'd also tried their hand at taxi driving, and couldn't make money. The traditional model for running a taxi service involves leasing cabs out for 12 hour shifts. Drivers have to work as much of those 12 hours to maximize their income. The first couple hours pay for the lease. An hour or two pays for gas. The last few hours are when you pay yourself.
This passenger had started driving for the Venture Capitalists' "not-a-taxi" business, and he thought it was great. The venture capitalists' business taps into the vast hoards of people who aren't good employee material, and those who want to supplement their income. But the money wasn't really enough for this passenger - he was working on a way to increase his income. After expenses, driving for the venture capitalists is the same as driving for the taxi company: they're both low-skill minimum-wage jobs.
It was a very nice neighborhood... I imagined that this family had support from their parents to be able to live there.
When I was talking to my ex-wife yesterday, she pointed out that I value freedom more than anything else. This is why I was drawn to taxi driving, and why I stuck with it for so long. The taxi company had their dress code, and standards. They didn't care what I did with their taxi, as long as I paid them at the end of the shift. I could have found a regular JOB, but I enjoyed the adventure of going new places every day, and meeting new people every day, and occasionally being sent to help someone who needed more than just a ride.
JOB is a backronym that stands for "Just Over Broke". My income from taxi driving was enough to finance my entrepreneurial ambitions.
The only "real job" I've had was working for Amazon [1]. I worked at a summer camp when I was 12 or 13. After I graduated from teh college with a "B.S." Computer Science degree (it is an expensive piece of paper that hangs on my father's wall), I worked at various family-owned businesses, and helped take care of my grandparents...
I am not well-suited to being an employee. Now that I don't drive around in the taxi anymore, I'm thinking about applying for the IT department at the local hospital... Recently I went to visit a friend in the ER, and this fellow was swapping out a scanner, so I struck up a conversation... It'd be a temporary gig.
This is an interesting opening, coming from the Wall Street Journal:
"Millions of young males have left the workforce and civic life. Full employment? The U.S. isn’t even close."
If the USA is not close to full employment, then the USA does not have to work about inflation. And yet, in other commentary, the Wall Street Journal has been obsessed with the risk of inflation, for many years now. They have urged the Fed to raise rates to head off a surge in inflation. But if there is hidden unemployment, then rates can remain low longer, with little risk of inflation.
I would think, when the labor force participation rate is 62%, and there are 94 million out of the work force, it's pretty obvious that there is a lot of unemployment. Granted, included in that number are the elderly and retired, but that's still a lot of people.
The thing with inflation, is that its not broad-based, 1930s-fill-a-wheelbarrow-with-Deutschmarks-for-a-loaf-of-bread inflation, it's inflation in some sectors and deflation in others. Housing, education and health care are going through the roof, but groceries and consumer goods are staying about the same or getting cheaper, and gasoline and heating costs are the lowest they've been in a decade or more.
Indeed - as Krugman keeps going on about, there's little risk of "classical" inflation. What there is is a lot of complaining from the rentier class (and some of the better off pensioners) that they can't make 4% for doing nothing any more.
Inflation can still happen in sectors that have both investment-like and consumption-like qualities, such as real estate, when massive amounts of investment capital try to look for safe and/or high-yielding havens.
Edit: there's a reason economists usually use "looking for work" for unemployment numbers: it's really hard to gauge why people don't look for work.