Notes from the inequality beat:
President Obama was in Galesburg, Illinois, to urge more spending on education and infrastructure to combat the “inequality of opportunity” that besets America and, especially, its shrinking middle class. Galesburg, a hollowed-out industrial city (and hometown of Carl Sandburg), was an appropriate venue: it never has recovered from the closure of Maytag and other factories since 2000 that destroyed 7,000 jobs (in a city of 32,000) and decimated its own middle class.
Obama seems to feel that all he needs to do to solve a problem is to give a speech about it. He knows better, of course: five years in Washington has shown him that increased spending, even if justified, isn’t going to come.
But a drumbeat of recent news articles and academic reports are making it plain that it will take more than some school reforms to reverse the decline of America and its middle class or close the ever-widening inequality gap between most Americans and the folks at the top. We’ll keep an eye on future articles and reports as they appear. But here’s a grab-bag of recent straws in the wind.
One of the grimmest reports is “Dancing with Robots,” a study by economists Frank Levy of MIT and Richard J. Murnane of Harvard for the Democratic think tank Third Way.
Levy and Murnane started by looking at job categories that have been growing since 1970 and are projected to keep growing. Big gains showed up in low-level manual labor – truck driving, carrying a sofa up three flights of stairs, cleaning a building, digging a ditch. Computers can’t do these jobs, so they’re safe (although truck drivers should be worried: see below). Big gains also appeared in relatively high-level jobs – writing a complex legal brief, teaching biology, diagnosing a strange illness, even repairing auto engines. Computers so far can’t do these jobs: indeed, they can help doctors and lawyers work better by increasing information or magnifying diagnostic tools.
The decline comes in the middle, where most Americans work. “For much of the 20th century,” the economists write, “a significant amount of work involved following directions. Today, work that consists of following clearly specified directions is increasingly being carried out by computers and workers in lower-wage countries.”
Levy and Murnane offer hope – and then dash it. First, they note that “the remaining jobs that pay enough to support families require a deeper level of knowledge and the skills to apply it.” American schools still teach basic skills as well as they used to, they say, but that’s not good enough now. Twenty-first century literacy involves new technical skills, often through a college education. Those who have it will prosper: those who don’t will be down with the ditch-diggers. In 1980, they say, a 40-year-old college grad earned 26% more than a 40-year-old high school grad: today that gap has grown to no less than 84%.
So the solution is more higher education. Simple, huh? Not so simple, say Levy and Murnane.
A shrinking middle class means more Americans living in poverty. This means they are less able to afford higher education for their children. More important, they are less likely to live in neighborhoods with good schools. Most important, poorer families simply offer their children less intellectual stimulation than richer ones. This increases the rich-poor gap in this country and makes it harder to close.
“Roughly speaking, the spread of computerized work is increasing the importance of education even as it is undermining many children’s opportunity to acquire foundational skills needed for post-secondary education,” the authors write. Taken together, they say, these factors “are a recipe for an increasingly class-bound society with little upward mobility.”
Almost every day, news articles fill in the details of the Levy/Murnane study. Here are some examples:
Real poverty is restricted to a minority of Americans, right? Wrong, according to an Associated Press study showing that four out of five American adults experience joblessness, near poverty or reliance on welfare for at least part of their lives. The white-black divide is narrowing, not because blacks are becoming more affluent but because whites are becoming poorer, the AP said. In other words, the ghetto isn’t some inner city area any more: for more and more Americans, it’s home.
The prosperous state of Minnesota has regained nearly all the jobs it lost in the recession. Unemployment there is only 5.3 percent, well below the national 7.6 percent unemployment rate: at 5.1 percent, Minneapolis has the lowest unemployment rate of any big American city.
Again, hold the fireworks. Adam Belz, writing in the Minneapolis Star-Tribune, reports that many of the employed are temporary workers, not full-timers, without the pay, security or benefits that full-time workers enjoy. The number of temp jobs in Minnesota is 68,199, an all-time record, Belz writes. “Temp hiring has been rising 14 times faster than overall hiring since the recession,” he says. It’s part of a national trend, he adds, with temp positions growing by 40 percent in the country over the past four years, compared with a 4 percent growth in overall hiring.
Sure, temp jobs are better than nothing. But this trend helps explain the disappearance of the middle class and the economy distress reported by the AP.
Still, there are good jobs out there – in education and health care, the so-called “eds and meds.” And no less than 5.7 million Americans are truck drivers, driving vans and semis for decent wages. How bad can this be?
Not so bad, if it lasts. But it won’t last. Aaron Renn, in an article for New Geography, writes that eds and meds, like other jobs, are no longer the growth machines they were between 1990 and 2008, when these public service jobs accounted for 50 percent of all national job growth. Since the recession started, government has shed 741,000 jobs, including 355,000 teaching jobs.
Renn explains many of the causes. But the big one is that eds and meds, like all government jobs, are basically funded by government. At a time when both state and federal budgets are squeezed, job growth in these areas is ending.
That leaves truck driving. Robots, at least, can’t back a semi into a supermarket parking lot. Can they?
In an article entitled, “Daddy, What Was a Truck Driver?”, the Wall Street Journal reports that “autonomous” trucks – drone vehicles without human drivers – are already operating at an iron ore mine in a scorched area of Australia called The Pilbara. Already six automated trucks are hauling ore and dirt around the site 24 hours a day, eliminating 24 jobs altogether. Eventually, it’s planned to have 45 of these trucks on site, wiping out some 180 jobs.
Not surprisingly, the company involved is Caterpillar, the Peoria-based global corporation known for its hard-nosed campaigns to drive down wages and benefits and crush unions. Unlike most Caterpillar workers, autonomous trucks won’t go on strike.