Advertise here: Contact FM.

The Coming Collapse of the Middle Class
May 1, 2008 2:22 AM Subscribe

"The Coming Collapse of the Middle Class"

With inequality on the rise [1,2,3], what can be done to combat the "credit crunch"* and restore the link between wages and productivity? [cf.]

Afterall, "economic inequality makes democracy repugnant to elites and attractive to the masses. It is a recipe for civil conflict and unstable democracies. But a sizeable middle class is conducive to democracy: civil society is stronger, while the dangers of unbridled populism are reduced."

Otherwise, "globalization will fail and capitalism or even humanity itself may come to an end. The real alternative to good globalization is world war. And because of the nature of today's technology, such a war would be apocalyptic in the twenty-first century. Because there is not much time left, the Great Boom, taken as a whole, either is not a bubble at all, or it is the final and greatest bubble in history."

---
*when "what the US economy produces is no longer well matched to what Americans consume, and we are structurally unprepared to generate tradables, goods or services, in quantity adequate to cover the difference," is it -- US living standards -- even defensible and/or is another revolution on the way?

posted by kliuless (98 comments total) 50 users marked this as a favorite

Whoa, since when have they allowed 57-minute videos on YouTube?
posted by TheophileEscargot at 3:00 AM on May 1, 2008 [1 favorite has favorites]

"globalization will fail and capitalism or even humanity itself may come to an end."

Missing tags: Exceptionalism. American.
posted by rokusan at 3:03 AM on May 1, 2008 [10 favorites has favorites]

The argument in this post is full of unsupported assumptions and leaps in logic... I'm not going to cower in my bunker just yet.
posted by Spacelegoman at 3:06 AM on May 1, 2008

If a transcript of this comes out, I'll read it, because it sounds interesting. But an hour long video? Bah.
posted by modernnomad at 3:07 AM on May 1, 2008 [4 favorites has favorites]

Also, the most depressing thing linked to there is the WSJ graphic showing that for 90% of American families, their real income has dropped during this decade.
posted by modernnomad at 3:11 AM on May 1, 2008

Stop stop stop!

Factories may close, jobs may be outsourced, but when it comes to the crunch, there is still day trading and the ability to sell our groovy lampshades on eBay.

Boom, go about your business please.
posted by mattoxic at 3:17 AM on May 1, 2008 [2 favorites has favorites]

I don't really have time for the video either. If you click through, she's a law professor not an economist or sociologist: it seems like a long time to spend listening to an amateur talk about something outside their expertise.

The other stuff seems a bit waffly but not particularly kooky. Refreshingly there were no calls to abolish fractional reserve banking and to return to the gold standard.

As I've said before, I think we should wait to see how the bursting of the credit bubble pans out before attacking inequality too strongly. Theoretically, as the rich gained most from the bubble, they should also lose most from it. That should reduce inequality to some degree naturally. Slamming a bunch of extra taxes on the rich isn't necessarily a bad idea, but it ought to be done in a boom not when potentially heading into a recession; or you risk hurting non-rich people do by deepening that recession.
posted by TheophileEscargot at 3:17 AM on May 1, 2008

And we finally get a Presidential candidate who appears to be an intelligent, principled, reform-minded person, and all we can do is yell, "but... but... his preacher said some crazee anti-American stuff!!!"
posted by psmealey at 3:24 AM on May 1, 2008 [9 favorites has favorites]

Yeh, we've been bouncing some of her ideas and writings back and forth in my research group at University; a few links I've found interesting:

She blogs on Huffington Post.

Her book with Tyagi, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke.

Her new book is interesting as she advocated active debt management driven by realistic budgeting for families, i.e, cheaper houses, etc.

Her testimony on bankruptcy reform to the US Senate back in 2005.

An interview in the Harvard Gazette, revisiting themes of bankruptcy driven by two incomes.

Another interview where she discussed bankruptcy in general, and touches upon US / European differences (I find it difficult to explain to folks that The United States is considered creditor hostile regime in banking circles; there ain't no Chapter 11 here - run your biz into bankruptcy and no court is gonna save you).

I've long advocated that folks live absolutely not relatively. A lot of her writings that I've seen touches upon the same theme, although her most recent book has lots of hard data documenting the (alarmingly large!) percentage of net pay that goes on just four, necessary spendables ( food, housing, health / education & transportation).

I haven't seen this interview and can't grab an hour to watch it today, but I'll be traveling tomorrow to then - thanks for posting.
posted by Mutant at 3:32 AM on May 1, 2008 [7 favorites has favorites]

I think it's worth watching the video - it's well-presented and the numbers seem to make sense to me.

For those who haven't, the basic premise is to start with a basic income/expense comparison of a 1970's family with a 2000's family, then start layering on a higher risk of income loss, higher health care costs and income drops for missing work, etc. With each layer she adds a new pressure to the 2000's family, and one more potential way that they could end up in serious trouble. I'm not exactly hiding in my bunker, but it's a compelling argument.
posted by ukdanae at 3:41 AM on May 1, 2008 [1 favorite has favorites]

Awesome. Thanks.
posted by seanyboy at 3:49 AM on May 1, 2008

The middle class is and always has been an illusion.
posted by Eideteker at 4:00 AM on May 1, 2008 [1 favorite has favorites]

she's a law professor not an economist or sociologist: it seems like a long time to spend listening to an amateur talk about something outside their expertise.

She's a well-known expert on consumer issues related to finance and credit. She has some interesting things to say in FRONTLINE's "Secret History of the Credit Card."

That said, I think the gloomiest and doomiest of these experts are talking out of their butts. The goal of the rich in the US is to grab as much as they can without watching the rest of us get fed up and storm the Bastille. If we revert to some 18th-century economically divided nightmare like they're suggesting, people might actually get irritated enough to demand actual reforms and vote for real progressives that will change the structure of government. No rich person wants that, especially the ones that own the government.
posted by Mayor Curley at 4:57 AM on May 1, 2008 [3 favorites has favorites]

After watching the 57-minute video (first link) all without skipping, I can confirm ukdanae's view that it is very well worth watching. Unlike most "economic experts", she's not full of fluff, and she's doesn't become sensationalistic. It's one hour of content, which makes interesting points about how the bursting of the bubble will pan out. One might even learn that she doesn't attack inequality. (The rest of the links, I don't care much for)
posted by flif at 4:58 AM on May 1, 2008

Also, talking about changes in the wealth or inequality of families over decades raises a bit of a red flag for me. The structure of families has changed over that period. You don't have so many families with a full time breadwinner and a full time homemaker anymore. Instead you have more two-earner and more no-earner families, which exaggerates family inequality.

However, it's difficult to address this in policy terms. Generally men earn more than women. Suppose you put an extra tax on two-income families: it makes more sense that the woman in a couple gives up work, so you're incentivizing women to leave the workplace.
posted by TheophileEscargot at 5:08 AM on May 1, 2008

dad, can you front me $85 for gas?
posted by quonsar at 5:17 AM on May 1, 2008 [6 favorites has favorites]

With inequality on the rise [1,2,3], what can be done to combat the "credit crunch"* and restore the link between wages and productivity?

There's a link between wages and productivity!?

Hmm. Since when?
posted by RoseyD at 5:20 AM on May 1, 2008 [1 favorite has favorites]

For starters, there's no way I'm watching that. I come to the Internet precisely because I can attain information faster than I can in other media, so sticking an hour-long lecture on the Internet makes no sense to me. Give me a transcript, or I'll find something else to do.

But second, I think perhaps the biggest problem here--and she may address this, I don't know--is that the vast majority of people simply aren't capable of producing very much. Most Americans do jobs that don't require any particular degree of training or education to complete. Sure, we do have a lot of engineers, lawyers, doctors, and teachers, but we've got a lot more phone-answerers, paper-filers, drivers, servers, retail clerks, and cleaners, jobs which require little more than an able body.

But though most people don't produce much more than they would have 500 years ago, massive increases in productivity among the educated classes has led to an increase in the perceived cost of living for everyone. I say "perceived," because even someone who earns less than the national average, say $30,000 for a family of four, still lives a palatial lifestyle compared to the historical norm. Historically, unskilled or low-skilled labor produced enough to provide you with just enough food to keep body and soul together (assuming there was food to be had at any price) and a room in an unlit and unheated hut. Today we consider a lot of things "essential", e.g. health insurance, electrical power, etc., which have never even been--and are still not--an option for the vast majority of humanity, and which, notwithstanding perceptions to the contrary, are actually pretty expensive. Exactly how expecting someone who produces the same amount as a medieval peasant to be able to afford 21st-century amenities has always escaped me.

Does this strike anyone else as odd? I'm not saying that abandoning centuries of technological advancement is advisable or even acceptable, but I do think that a lot of the current discussion is based upon assumptions which don't have anything to do with reality.
posted by valkyryn at 5:40 AM on May 1, 2008 [4 favorites has favorites]

Theophile, regarding inequality of families: you're absolutely right about the change to two-income families over the last 30 years. Elizabeth Warren's contention is that this has become the new economic baseline and presents its own inherent risks.

In one-income families, if the breadwinner loses a job or becomes disabled, the other parent can step up and earn income. In two-income families where *both* those paychecks are required to cover the basics, if one adult loses a job or becomes disabled, there's not that "internal safety net" within the family unit and the consequences can be much more pronounced.

Like Mutant documents, she's not "just a lawyer", she's been a researcher/writer/advocate on these issues for years and her work is thought-provoking and not a little scary. Definitely worth checking out.
posted by Sublimity at 5:45 AM on May 1, 2008 [2 favorites has favorites]

Thanks for articulating that much better than i could, Sublimity. I searched around and couldn't find a transcript of this speech, but here is an interview with Warren where she's talking about how precarious a middle-class family's security can be after a single crisis, which she talks about in the video.
posted by ukdanae at 5:52 AM on May 1, 2008

"I don't really have time for the video either. If you click through, she's a law professor not an economist or sociologist: it seems like a long time to spend listening to an amateur talk about something outside their expertise."

So if she was, in fact, and economist or sociologist rather than an expert on economic law and bankruptcy you would swallow it at face value? Or perhaps you would find another reason to disregard her research before actually listening to it? If you are too lazy to watch the video then say so, don't come into the post and make up some asinine reason why you didn't. She's not calling "doom and gloom" and if you'll actually watch the video all she does is present a some purely objective, factual statistics, from reputable sources, and puts forward a theory which is hardly outlandish or irrational given the facts of the case. The fact that you have come into the thread to boldy state your own predictions without even taking the time to listen to her arguments says much about your own credibility, which is obviously nil unless you have a degree in the precise subject, am I right?
posted by Dillonlikescookies at 5:53 AM on May 1, 2008 [8 favorites has favorites]

I don't quite get this argument about not being able to afford kids (In the comments below the video on the first link). It sounds like what they mean is being able to afford kids while still living the same lifestyle as you would if you didn't have them. Obviously that's not going to be the case.

But obviously it's still possible to reproduce, you're just going to need to make some sacrifices. And furthermore, as long as you don't alienate your kids it would probably make retirement a lot easier.
posted by delmoi at 6:07 AM on May 1, 2008

If the middle class in this country collapses you can expect right-wing movments that will make the current neo-cons look like pikers.
posted by Ironmouth at 6:14 AM on May 1, 2008 [3 favorites has favorites]

If the middle class in this country collapses you can expect right-wing movments that will make the current neo-cons look like pikers.

Freikorps anyone? It's time to go pick up that Mini-14 I've been considering for years.
posted by MikeMc at 6:31 AM on May 1, 2008

I wonder if the argument about not affording kids is that both parents need to work full time to pay off the 400k mortgage, Volvo SV90, BMW 5 Series, plasma TV AND the cost of full time child care ...

If that's what you wonder, you didn't find this link.
posted by Kirth Gerson at 6:32 AM on May 1, 2008

Hehe dillon, enjoy your free time while you have it.

Someday, you too may find yourself reluctant to invest an hour listening to someone talk when you have no reason to think they know what they're talking about...
posted by TheophileEscargot at 6:32 AM on May 1, 2008

For starters, there's no way I'm watching that. I come to the Internet precisely because I can attain information faster than I can in other media, so sticking an hour-long lecture on the Internet makes no sense to me.

That would have made this FPP a lot quicker.

Transcript:
DAD makes funny noise.
QUADRUPLETS laugh.
DAD makes funny noise.
QUADRUPLETS laugh.
DAD makes funny noise.
QUADRUPLETS laugh.
DAD makes funny noise.
QUADRUPLETS laugh.
DAD makes funny noise.
QUADRUPLETS laugh.
MOM: Do it again, Daddy.
DAD makes funny noise.
QUADRUPLETS laugh.

Seriously, I think the anti-video sentiment in this thread is odd. One of the great things about the internet is that an interesting lecture that I couldn't have seen live is now available for me completely free. Youtube and podcasting have demonstrated that internet video and audio are in high demand. If you don't have time to watch a lecture right now, fine, but I think the real problem here is that some people have cultivated a taste for instant gratification to the extent that they actually complain that no one has posted a transcript, rather than just moving on. If you don't like lectures, there's a big long article to read just a couple of threads back.
posted by Pater Aletheias at 6:50 AM on May 1, 2008 [5 favorites has favorites]

I don't really have time for the video either. If you click through, she's a law professor not an economist or sociologist: it seems like a long time to spend listening to an amateur talk about something outside their expertise.

Albert Einstein was a patent office clerk when he developed the Theory Of Relativity.
posted by briank at 6:53 AM on May 1, 2008 [1 favorite has favorites]

If you are too lazy to watch the video then say so

are you hinting that someone is too lazy to watch television? how absurd

some of us are too busy to watch an hour video - maybe someone should treat other people's time as if it's actually valuable to them and provide a transcript
posted by pyramid termite at 6:55 AM on May 1, 2008

If you don't have time to watch a lecture right now, fine, but I think the real problem here is that some people have cultivated a taste for instant gratification

or effective, efficient communication
posted by pyramid termite at 7:00 AM on May 1, 2008

For those balking at the length of the video, but are interested in the content, you should bookmark it to check out later.

I'm about 1/3 of the way in and Warren is very good. She was excellent in the Frontline credit card show, and she's very interesting and engaging in this lecture as well.
posted by glycolized at 7:09 AM on May 1, 2008

It wasn't until post WW-II that this country really developed a solid middle class and was interested in building it. IMO, we have moved more toward how this country was built pre WW-II in which there was a large gap between the haves and the have nots.
posted by toddbass10 at 7:26 AM on May 1, 2008

Video is great for someone like me who works mainly on his computer (website designer, 1996 style). I play the video on one area of my screen while working in another (2560 x 1600 resolution so lots of room to work with).
posted by autodidact at 7:33 AM on May 1, 2008

My God this person is dumb. First of all, the only link between productivity and wages is an inverse one. Productivity is a function of technology and business organization much moreso than it is of skilled labor. You raise productivity by deploying technology, which allows you to hire fewer, less skilled workers who are paid less.

And like Eideteker said, there is no middle class. I'd love to write some screed about how the system is ripping people off and the wealthy manipulate the social order to enrich themselves, but that wouldn't be honest. There are too many people in the so-called middle class who have never driven a ten-year old car, who spend upwards of $200/month on cell phones for their families have cable TV packages with premium channels, etc. to place all the blame on the system.

Stop talking about democracy and economics. The United States was one of the few exception in world history in that the American Revolution was not a middle class revolt, it was a revolt of the wealthiest elites in the colonies. The Constitution allowed only for landowners to vote, land owning being an indicator of wealth and status. Senators were not directly elected, and neither are Presidents.

As it may pain people to realize, the United States was not a democracy, and will never be one. It's rapid and massive success is entirely dependent on the country being under the control of wealthy elites who have a vested interest in the country's success. The moment the elites are content to turn over political control to the masses is when the know the country is headed for failure. If that happens, it means the wealthy have shielded themselves from whatever disaster is coming, or have moved their money elsewhere.

The middle class in America is largely comprised of spendthrifts and idiots. They are still buying gas guzzling trucks and SUV's at $4.00/gallon even when more economical options are available, and their justifications for doing so are entirely irrational. They are completely and hopelessly uneducated. We are actually engaged in a national debate over whether we should teach biology in biology class, or instead teach religion in biology class. And it's the middle class parents who are pushing for the latter, while the coastal elites push for the former.

Apparently, the middle class cannot calculate for itself whether it can afford a mortgage payment, and when the bank forecloses on their houses, they hold parties to destroy them. They can't be bothered to learn what they don't know, but they also don't like it when you tell them what they don't know. And they hate it when you tell them they can't have something. Having things and getting more things is extremely important to the middle class, unless you foolishly believe that the shopping malls and Walmarts of the country are patronized exclusively by the rich and the destitute.

And globalization won't fail. The European and Chinese middle class do not have the sense of entitlement that the American middle class does, for example. They will continue to trade and thrive. It's only we who'll be left out.
posted by Pastabagel at 7:36 AM on May 1, 2008 [10 favorites has favorites]

Nice link, but your not-so-subtle "below the fold" attempts to link the financial problems to a possible/likely revolution fed by former members of the middle class isn't very persuasive. Keep dreaming, but I'm here to tell you that Dan and Sharon and their kids Brittney, Conner, and Ashley won't be picking up semi-automatics and storming Washington, D.C., even if the bank kicks them out of their 2,000 square foot colonial in the suburbs and they have to get their dinner from a soup kitchen.
posted by pardonyou? at 7:38 AM on May 1, 2008 [2 favorites has favorites]

delmoi, I wonder if the argument about not affording kids is that both parents need to work full time to pay off the 400k mortgage, Volvo SV90, BMW 5 Series, plasma TV AND the cost of full time child care- to look after the kids so both parents can work to pay off the....

It's fucking madness
posted by mattoxic at 9:18 AM on May 1 [+] [!]

It's not that at all. It's about housing costs escalating beyond all reason, along with health care costs and a number of other non-negotiable issues, and increasing job volatility. As a single parent, one of her riskiest groups, I find this terrifying. You really should watch it to see the numbers. The most striking issue is that the higher costs are not in clothing and cars (except where a second car is needed). It's in the essentials and it's not about McMansions but rather basic housing needs. When I was a teenager, the advice we got was that we should estimate about a quarter of our paycheck would go to rent. That's laughable today.
posted by etaoin at 7:40 AM on May 1, 2008 [2 favorites has favorites]

Albert Einstein was a patent office clerk when he developed the Theory Of Relativity.

That doesn't mean it's worthwhile to listen to the theories of every random patent clerk or anyone with an equivalent job title.
posted by delmoi at 7:49 AM on May 1, 2008

For the record, the video linked above the fold does not have remotely the sort of hysterical tone suggested by some of the links below the fold. While she does suggest -- briefly -- that the US is moving towards a more polarized income distribution of rich and poor, that's not the centerpiece of her lecture, and she's not climbing into a bunker. The video itself is primarily an attempt to answer the question "How come my Mom and Dad mostly had one person working, while I and my SO both work, yet Mom and Dad seemed better off financially?" I don't think she explores it nearly completely enough, but it's smart and interesting as far as it does go, and people are already complaining that it's an hour.
posted by tyllwin at 7:56 AM on May 1, 2008

I wonder if the argument about not affording kids is that both parents need to work full time to pay off the 400k mortgage, Volvo SV90, BMW 5 Series, plasma TV AND the cost of full time child care- to look after the kids so both parents can work to pay off the....

The video (which I just finished watching) gets into that. Warren explains that a lot of the conventional wisdom that surrounds our increasing consumption (as exemplified by pastabagel's rant above) is wrong: Compared to 1970, we spend less per car over its lifetime, less on food, less on clothing, and less on appliances. We're spending more—a lot more—on houses, medical care, and child care. Also, since many families have two earners, they have more income, therefore more taxes, and two cars, therefore more on cars total.

It's a long video, but it's fascinating. I recommend diminishing your productivity slightly in order to watch it.
posted by adamrice at 8:04 AM on May 1, 2008 [8 favorites has favorites]

Albert Einstein was a patent office clerk when he developed the Theory Of Relativity.

With a physics degree. He just couldn't find a job that used his degree after school, just like every other postgrad.
posted by smackfu at 8:04 AM on May 1, 2008

Not a transcript, but my notes from the lecture:

1. Though household incomes have increased over the last thirty-five years, median incomes for males have actually dropped by $800. (Women make less still.) Household incomes have only increased because both partners are working.
2. Household savings have gone from 11% of take-home pay to -0.8%, while the contemporary family has negative savings: revolving debt has risen from 1.4% of annual incomes to 15%. From saving 11% of annual income to indebtedness of 15% of income!
3. However, contemporary households actually spend less on consumer goods than they once did: 35% less on clothing, 18% less on food (including eating out,) 52% less on appliances, 24% less on automotive expenses per car. This revolving debt is not the result of consumer society, despite what everyone would have you believe.
4. Comparing households from 1970 with households in 2006, Warren adjusts for family size by asking questions about the two parent/two child household.
5. Mortgage payments are up 76%: real estate costs are way up, but it’s not really a matter of size. Median home size has gone 5.8 rooms to 6.1 rooms, basically an extra bathroom. However, new construction is aimed at the top 20% of families.
6. Health insurance and health costs are up 74%.
7. Since more families need two cars, the lower per car cost still leads to 52% increases in automotive costs for the two-income household.
8. Child care is up 100%, but that’s just because the average two couple household had no child care costs thirty-five years ago.
9. The median family is paying 25% more taxes than thirty-five years ago.

So: single income families in the 1970s earned less money but had more disposable income. Today, the two-income family spends 3/4 of its annual income on fixed expenses, and spends the 1/4 left on food, clothing, and entertainment. They can’t pare back their spending when financial hardships arise, and if either income is lost through family illness or job loss, the 2006 family can’t pay its fixed costs!

The contemporary middle class (literally media) household works harder, its individuals make less money, it is more brittle, vulnerable to risk. All this volatility spells the coming collapse of the middle class. Bankruptcies are rising, all due to job loss, family illness, or divorce, but people aren’t admitting it. “A middle class where people are falling out and into poverty is a middle class that has less room to bring people up and out of poverty.” Poverty is intractable because the middle class is shrinking, and I think Warren is right to say that our economy is increasingly becoming a two-class society: those who don’t get sick, lose their job, or get divorced, and those who do.
posted by anotherpanacea at 8:22 AM on May 1, 2008 [27 favorites has favorites]

the first sentence in the last paragraph should start: "The contemporary middle class (literally median) household..."
posted by anotherpanacea at 8:24 AM on May 1, 2008

Mortgage payments are up 76%: real estate costs are way up, but it’s not really a matter of size.

it's a matter of location - the fleeing of the cities for the suburbs has been expensive and it's getting more expensive with the price of gas what it is - it varies from locale to locale, but people in my area have been willing to pay a lot of money to buy a house in the "right" school district

of course, people don't like to talk about that
posted by pyramid termite at 8:34 AM on May 1, 2008

of course, people don't like to talk about that

She makes that point about schools. A bit timidly for my taste and one of the areas I wish she'd gone into more is the cost of fleeing the cities both to the individual family and to the broader community, but that inevitably leads to the question of "why?" and "why?" is a minefield I can't blame her for not wanting to venture into.
posted by tyllwin at 8:37 AM on May 1, 2008

on a somewhat related note, The binge culture of banking must be changed and Has the Financial Industry's Heyday Come and Gone?
posted by ornate insect at 8:50 AM on May 1, 2008

Does my heart right to see a fellow female Texas expat (I think it's an appropriate term for a Texan who chose to leave Texas) doing such great, appreciated research.

(I am not 100% certain she's Texan, but she sure does sound suspect. And she got her bachelor's from University of Houston.)

Thanks for the fantastic link. I've been talking to my (New Hampshire-based fourth-generation Texan) mother about the debt issue pretty consistently for awhile; now we have a new set of numbers to talk about.
posted by nosila at 8:59 AM on May 1, 2008

The middle class in America is largely comprised of spendthrifts and idiots.

This is a very popular fallacy but a fallacy none the less. Read the "Two Income Trap" it's actually a bit of an eye-opener. The "middle class" aren't struggling because of venti lattes, flat screen tvs and gassing up the Canyonero, it's stagnant wages and exploding costs for healthcare and housing that are the biggest culprits.
posted by MikeMc at 9:09 AM on May 1, 2008 [3 favorites has favorites]

Comparisons to 1970 raise another warning flag with me. Before the stagflation crisis, the US economy experienced an inflationary boom. (What you might call a bubble). By taking the peak of a boom as a baseline, you can make conditions since then seem poor by comparison.

It also seems a little dubious to take some of these things as "needs". Two cars is an obvious example. Even with healthcare: life expectancy has increased by 7 years since the 1970s. Healthcare has gotten better and more expensive, and people are willing to pay quite a lot for another seven years of life. That doesn't necessarily mean things have gotten worse.
posted by TheophileEscargot at 9:15 AM on May 1, 2008 [2 favorites has favorites]

it’s not really a matter of size. Median home size has gone 5.8 rooms to 6.1 rooms, basically an extra bathroom

But houses don't cost by the room. They cost by the space and material. You also need to look at lot size.
posted by ROU_Xenophobe at 9:16 AM on May 1, 2008

It also seems a little dubious to take some of these things as "needs". Two cars is an obvious example.

I'm not sure it's so obvious. A family who lives in the city doesn't need two cars, but one who lives in a rural area, small town, or suburban area probably does given the fact that the median family she's using consists of two working parents.

For several years now, I've been vascillating from one side of the fence to the other on the question of whether I want children. Lately, I'm spending more time on the no-kids side of the fence. Today, after watching this lecture, I am running as far away from the fence as possible.
posted by nosila at 9:31 AM on May 1, 2008 [1 favorite has favorites]

Here it comes! It's the Straw Man Army!
posted by Kirth Gerson at 9:32 AM on May 1, 2008 [1 favorite has favorites]

Ha! Nice, Kirth.
posted by nosila at 9:36 AM on May 1, 2008

Theophile, I know that it would waste your time to watch a long, boring video full of information, but you have spent some significant fraction of an hour raising objections, some of which Prof. Warren answers in her remarks. Looking at this purely rationally, you could learn more by watching, say, 5-10 minutes of the video, than talking about how she must be terribly wrong. Start at around minute 7, after she thanks everyone.

You'll especially need to guard against confirmation bias, because you've already taken oppositional public positions in this thread..

Of course, you may value talking over listening . . . If that's so, I need not tell you to just ignore this comment.
posted by ferdydurke at 9:50 AM on May 1, 2008 [1 favorite has favorites]

For several years now, I've been vascillating from one side of the fence to the other on the question of whether I want children. Lately, I'm spending more time on the no-kids side of the fence. Today, after watching this lecture, I am running as far away from the fence as possible.

I ran our expenses pre and post-kid the other day, and I worked out that overall, our expenses are up about 10-15%.

Health care, she was no added expense on the insurance, though she has her own deductible. Her annual physicals are covered.

Foodwise, she eats what we eat, and it just means fewer leftovers.

Clothing costs are up, but one dress shirt for me equals five shirts from the thrift store for her, so she's getting clothed just fine.

Incidentals have been a pain, e.g. the car seats and strollers and such. But that's what grandparents are for. Ditto toys.

The real PITA is daycare. Here in Seattle, getting daycare under $1000/month is well-nigh impossible, and the waiting lists for the good centers are such that you make sure you're on the list before you throw away the contraception.

On the plus side, we get a little back for daycare on our taxes on top of the dependent exemption, so that offsets about 30% of the daycare costs for us. Daycare did play into our equation over whether my wife went back to work, though. When roughly 15% of your take-home is chewed up by daycare, it's worth asking whether there's any point in having a second income that's just going to daycare.

For the most part, though, the increased expenses just meant giving up things we had to give up anyway in having a kid, e.g. eating out every single week at nice restaurants. So in the end, the question of whether we could one-income it or two was the only one that mattered. (We couldn't, unfortunately, though I have friends who are one-income households and saving a ton on daycare).

All that to say don't let the scare stories of "the end of the middle class" deter you from having a kid. Generations before us went through much worse and still managed to have us.

Consider carefully before throwing away pills and condoms, YMMV, always drink responsibly, rotate your tires, prices higher in AK and HI.
posted by dw at 10:01 AM on May 1, 2008 [1 favorite has favorites]

Man, you guys in America, like, really need state healthcare. Like yesterday.

I don't mean to be facile, but if people are choosing not to have children because of the cost of healthcare (and possible catastrophic costs in event of illness) this is hardly a good thing.
posted by jokeefe at 10:15 AM on May 1, 2008 [2 favorites has favorites]

Thanks for the figures and the counter-balance, dw. And for the disclaimer. :)
posted by nosila at 10:17 AM on May 1, 2008

Today, the two-income family spends 3/4 of its annual income on fixed expenses, and spends the 1/4 left on food, clothing, and entertainment. They can’t pare back their spending when financial hardships arise, and if either income is lost through family illness or job loss, the 2006 family can’t pay its fixed costs!

But...but....but......Xboxes......Ipods..... They're so fucking cheap! Things are great!
posted by Avenger at 10:41 AM on May 1, 2008

I have not checked all the links/movies/arguments but some thoughts:

Since the 90ies, Russia, China and India have joined the world economy (-> "The World is flat") and brought cheap labour to the market. The salaries in the western world are either sinking or at best stagnating for the broad masses. Further, the percent of what government expenses eat up of the gross domestic product is increasing since at least a 100 years (-> higher tax load).
Due to globalization, a lot of import taxes have disappeared. Taxes on capital are sinking in most western countries since capital is very mobile and flees high taxation. Rich people and companies have tools of lowering taxes (trusts, offshore, captive insurances etc. etc.) and can also evade taxation. The people most taxed is the middle class with little or no way of lowering taxes. Hence you just tax the people who have the biggest problems evading taxation.
At the same time you have a monetary system which rewards rich through "asset price inflation" and punishes the poor by general inflation.

Bottom line: the middle class gets crunched in between taxation and inflation. This is the same in the US as in Europe.

I don't see an easy way out of this problem. The best thing that you can do is probably to become as mobile as goods and capital and try to work in a country[ies] with a decent jobmarket, little taxation and a working health care/education/retirement system.
posted by yoyo_nyc at 10:52 AM on May 1, 2008 [1 favorite has favorites]

Pastabagel sez

And globalization won't fail. The European and Chinese middle class do not have the sense of entitlement that the American middle class does, for example.

Give it time, son, give it time. Britain and Europe are already on the path (have you heard reports from conteporary britain about middle class yobs?): Little Emperors know entitlement, believe me. We'll all be american soon enough.
posted by lalochezia at 11:17 AM on May 1, 2008 [1 favorite has favorites]

Xboxes......Ipods..... They're so fucking cheap! Things are great!

Ladies and gentlemen, the President of the United States.
posted by oaf at 11:17 AM on May 1, 2008

And to think, all those increasingly productive new engineers and doctors and teachers acquired their credentials by sitting in lecture halls listening to stuff just like this, when they could have did it so much quicker if their education had been available as a .pdf.

Thank you. You've made this point far better than I could have.
posted by SeizeTheDay at 11:30 AM on May 1, 2008

And to think, all those increasingly productive new engineers and doctors and teachers acquired their credentials by sitting in lecture halls listening to stuff just like this, when they could have did it so much quicker if their education had been available as a .pdf.

i guess no one read the last link
posted by pyramid termite at 11:37 AM on May 1, 2008

This is a very interesting lecture, and worth spending my lunch hour on.

And there ends the topical content. If that's what you were looking for, please move along now.

Ok, so, Pastabagel: I ignored an obnoxious comment by you earlier today in the longshoremen's strike thread. But here you are again, and my god, you really are a pompous jerk. You remind me of every college-age libertarian I've ever met. If you're not in fact a college-age libertarian, you're doing something wrong. And if you are, for your sake and everyone else's, shut up for about five more years.
posted by rusty at 11:56 AM on May 1, 2008 [4 favorites has favorites]

But houses don't cost by the room. They cost by the space and material. You also need to look at lot size.

The house that sold in Salinas for $40K in 1977 zillows for $480K today.

The "Two-income Trap" is exactly that. Land values & rents have been bid up to present levels by increased household wages.

If we want affordable and sustainable housing costs we should qualify loans on the average wage of the couple not the sum.

Plus perhaps start taxing site values more and fixed improvements less to cut speculators and slumlords off at the knees.
posted by tachikaze at 12:41 PM on May 1, 2008

"Pastabagel Shrugged"
posted by JackFlash at 12:51 PM on May 1, 2008

The "Two-income Trap" is exactly that. Land values & rents have been bid up to present levels by increased household wages.

The point you try to say is wrong The household wages have been increased but much less than general inflation has inflated prices. If you inflate adjust your income and the house price you will see that the house price has increased tremendously faster than your income. Hence, once again asset holder and rich people got rewarded, the working class punished by the monetary system/FIAT money.
posted by yoyo_nyc at 12:52 PM on May 1, 2008

That doesn't mean it's worthwhile to listen to the theories of every random patent clerk or anyone with an equivalent job title.

No, it means "don't judge a book by its cover".
posted by briank at 12:57 PM on May 1, 2008

The best thing that you can do is probably to become as mobile as goods and capital and try to work in a country[ies] with a decent jobmarket, little taxation and a working health care/education/retirement system.

I realize you are not seriously suggesting this, but I often hear people who do. And it bothers me. I don't want to move away from my family, my home and my history. I want to be a part of a thriving community, as well as being an individual. Becoming mobile might lead to better earning opportunities, but the costs seem too high. What is lost is a sense of place and the sense of self that goes with it.
posted by elwoodwiles at 1:41 PM on May 1, 2008 [1 favorite has favorites]

the problem is that everyone's trying to recreate the 50s, 60s, and part of the 70s as if that's the norm. It's not. It was an aberration, a perfect storm of postindustrialization, a giant bounce off a killer depression, everybody but the US rebuilding from a devastating war, and a half dozen other factors. The norm is a lot of poor people and a few very rich people, and like it or not, capitalism is always going to regress to that.
posted by stupidsexyFlanders at 1:41 PM on May 1, 2008 [1 favorite has favorites]

Apparently, the middle class cannot calculate for itself whether it can afford a mortgage payment, and when the bank forecloses on their houses, they hold parties to destroy them. They can't be bothered to learn what they don't know, but they also don't like it when you tell them what they don't know. And they hate it when you tell them they can't have something.

Pastabagel, are you aware that there is very little financial education in the United States public school curriculum? I'm from North Carolina, and I made it all the way through college without taking a single economics class. Everything I know about finance I learned from my parents, my coworkers, or the internet. It's not that I didn't bother to learn -- I DID bother to learn. No one in school bothered to teach me -- finance is just not part of the curriculum.

Perhaps you perceive that the system is unjust -- I wish that you would turn your anger away from the people whose productivity is being exploited.
posted by Laugh_track at 1:55 PM on May 1, 2008 [2 favorites has favorites]

Sure, we do have a lot of engineers, lawyers, doctors, and teachers, but we've got a lot more phone-answerers, paper-filers, drivers, servers, retail clerks, and cleaners, jobs which require little more than an able body.

WTF? Elitist much?
posted by The Light Fantastic at 10:46 AM on May 1 [2 favorites -] Favorite added! [!]

Clearly, "phone-answerers, paper-filers, drivers, servers, retail clerks, and cleaners, jobs which require little more than an able body" don't contribute to the economy or society.

So I suggest that we fire them all, and the engineers, lawyers, doctors and teachers can all answer their own phones, file their own paperwork, drive the taxis, buses, subways - hey, why not planes too? - and clean their own toilets. I'm sure they could easily do all those things in addition to their current professions, because it doesn't take any brains to run a decent filing system, hold your patience endless against elitist and arrogant customers on the telephone, or effectively organise a cleaning schedule to make sure you can finish in time, including keeping cleaning materials supplied.

No, it couldn't possibly be that the original poster is an ignorant fool who doesn't understand how all work in an economy contribute to that economy - or it wouldn't exist.

/sarcasm

But seriously, if we were to debate the utility to society, I would hold a toilet cleaner as far more useful and important to our society than a lawyer. Because frankly, we need lawyers only because we have a confrontational legal system and the other guy has lawyers. Lawyers are like nuclear bombs that way. The only benefit they possibly serve are to advocate for people against the gov't - but how many lawyers are employed in doing that?
posted by jb at 2:51 PM on May 1, 2008 [3 favorites has favorites]

jb--I think it was quevedo who said that "a lawyer is someone who picks your pocket and gives you a law for it"
posted by ornate insect at 2:57 PM on May 1, 2008

But houses don't cost by the room. They cost by the space and material. You also need to look at lot size.

Well, actually, houses cost by school district.
posted by anotherpanacea at 3:08 PM on May 1, 2008

So I suggest that we fire them all, and the engineers, lawyers, doctors and teachers can all answer their own phones, file their own paperwork, drive the taxis, buses, subways - hey, why not planes too? - and clean their own toilets

I know this wasn't your point, but have you ever been to post communist Russia or Romania? Or Jordan, or Saddam era Iraq? That's pretty much what you had there. One of the earmarks of a failed state is that the ambitious get the jobs, any jobs, whatever's out there while the rest either starve or pick up arms.
posted by psmealey at 3:32 PM on May 1, 2008

She also features prominently in the documentary and companion book Maxed Out.
posted by IndigoJones at 4:50 PM on May 1, 2008

psmealey - my sarcasms was definitly in action there. I wanted the original poster to realise how utterly ridiculous their statement was. Doctors and lawyers (and other educated professionals) can only be "productive" because that productivity is based on the productivity of others as well. For every $ earned by a lawyer contributing to the GDP, part of that is the labour of their secretaries, filing clerks and cleaners. It's interesting to think about the fact that they all work the same hours, to collectively produce the same product - legal services - but they are not compensated equally. Now, some people would argue that is because the lawyer is more "productive" than any of the support staff, but since that productivity usually measured by their compensation, it's a tautology.

And yes, when the society fall apart, it's the lawyers who are out of work - while everyone scrambles to keep the essentials of life going.

--------------------

Back to the original post: this is an excellent post, thank you. I was wary of the long video, and had difficulty getting it to load, but it was worth every second, and Warren is an excellent lecturer. It was much, much clearer than the average 1 hour academic lecture, and I'm including the ones for undergraduates in this as well.

I do have to admit that my first response to the title "The Collapse of the Middle Class" was "that isn't possible; everyone knows the middle class is always rising!" - a joke on how social historians from the medieval period forward keep claiming that their own period is the beginning of that elusive but all essential creature, the middle class. To be honest, I've done a fair bit of reading on this, but much of the debate seems to have been qualitative -- maybe I've missed something interesting, but I haven't seen very much analysis of exactly what proportions of a population were ever in the middle income ranges. Looking at Gregory King's 1696 estimates for numbers of families at different incomes, and ignoring anyone above £100 (less than 4% of the families), the distribution was still heavily weighted towards those with less than £25 - King thought about 65% of all people under £100 (and 62% of the whole country) had the incomes of "Labouring people and Out servants", or cottagers, common soldiers and sailors or paupers. He estimated that about 20% had between £25 and £50 (including artisans, handicrafts, small farmers), another 12% had up to £75, but only just over 3% had £75-100. But this is at the turn of the eighteenth century, which at least one scholar has as a "polite and commercial society", and many depict the middling sorts - esp the urban - as being the real story of the century. (They all owe E.P. Thompson more cred than I thought, before I just made this graph). Maybe the middling sorts were growing (does anyone know of any earlier statistics, like the Lay Subsidies of 1524/5, broken down by wealth or income?), but they were still smaller than the lower classes.

Thing is, I've always wondered about the modern claims that the 20th century is the age of the middle class as well. Is the United States (and by proxy, similar western countries) really one in which there are very few poor, very few rich, and a big bell curve of the middle class? (She doesn't say bell curve, but she does say something about a nice distribution). After some googling (and getting annoyed at the L-curve people, who have a point, but not a very interesting one), I found the obvious answer on the wikipedia page for Household income in the United States. This graph shows much more equal distribution of income than any graph from 1696 would show, but I still wouldn't have called it a society dominated by the middle class. Leaving aside households under $10,000/year, it seems that each sucessive range of $10,000 is smaller than the one before. There are a more households on $10-30,000/year than there are on $30-50,000, and a lot more than there are with $50-70,000. The national median is $44,389, but is this really what people mean when the use the qualitative descriptor "middle class"? It's the middle income, but I don't think that many Americans would agree it is middle class (what would "middle class" be?), and I would suggest that is because American society has a much more pyramidal structure (and larger lower class) than most people (including myself 20 minutes ago) realise.

This isn't a criticism of Warren at all - as far as I know, she looked at two parent-two child families over time, and presumably across a variety of income ranges. I was just thinking that if we are going to talk about the "middle class", it would help to think about how many people actually have middling incomes (by range).*

*I'm leaving aside the much more pesky use of "middle class" to describe a group - possibily heavily stereotyped - which is not necessarily middling income, but often upper-middle in income, even into the top tenth of income. This is the use in a lot of 18th/19th century history, and in contemporary commentary. I find this usage annoying, as the "middle" part of the term always makes people think that these people are somehow in the middle of income distribution, when really it means they aren't gentry (aka rich), nor are they like the rest of us working slobs. We would be much better off talking about people by income range.
posted by jb at 5:24 PM on May 1, 2008 [2 favorites has favorites]

(sorry - if anyone is wondering, I wasn't really talking about people in 1696, but households. Households varied greatly by size in the 17th/18th centuries, and they got bigger the farther you went up the social scale, but most of the 40 people in a typical peer's house would have been servants, and so it's a bit silly to talk about them as being rich.)
posted by jb at 5:27 PM on May 1, 2008

The video is well worth watching - or listening to, I had it running behind other things. Professor Warren may be a law professor, but her specialty is consumer credit and bankruptcy. I am an accountant that works in family law and I can attest anecdotally to the points she makes, but she is a rare expert that takes the information that the "middle class" is on shakey financial foundations and then looks further to see how much worse it is for the poor.
I remember seeing her on Frontline addressing the eroding of usury laws. She is clear and concise and I'd like to see her in an official government capacity of some kind.
posted by readery at 5:43 PM on May 1, 2008

I actually wouldn't like to see her in a government capacity. I think she is much better off in academics, where she can continue to do excellent research (which gov'ts should definitely pay attention to) in a free and (relatively) non-politicized atmosphere.

The reason I feel this way is that there are certain fields in academics which have become revolving doors for people moving from academia into politics and back again (as adminstrations come and go), and it's been terrible for those fields. Way too politicised, way too much ideology overwhelming research, and also just some bad researchers getting prestigious positions from which they can influence the field (for the worse) because they were hot-shot advisors for some politician or other. Security studies in the US, for example, is much worse than it is elsewhere (in terms of research quality, rigour), because it's been politicized in this way.
posted by jb at 5:48 PM on May 1, 2008

"Children in a two parent home are more likely to experience a bankruptcy these days than a divorce."
posted by dobie at 6:32 PM on May 1, 2008

For starters, there's no way I'm watching that. I come to the Internet precisely because I can attain information faster than I can in other media, so sticking an hour-long lecture on the Internet makes no sense to me. Give me a transcript, or I'll find something else to do.

But second...

See, that's where you went too far. It's one thing to chime in just to tell us why you don't want to watch a video, but seriously—if you didn't watch it, I really don't need to know what you think about it.

But second, if the primary value that you use to decide whether or not information is important is how quickly you can consume it... I also don't need to know what you think.

Feel free to read the punctuation ending that last sentence as a word, you'll get a better sense of my tone.

The European and Chinese middle class do not have the sense of entitlement that the American middle class does, for example. They will continue to trade and thrive.

I am not an economist, but my understanding is that if the US economy collapses, the Chinese economy will collapse (perhaps even worse) because so much of their economy is based around exporting stuff to the US.

The middle class is and always has been an illusion.

Yeah, so have money & love been, but I'll take them over nothing. Without context, that sentence is meaningless, boring and reeks of claptrap.

Also, talking about changes in the wealth or inequality of families over decades raises a bit of a red flag for me. The structure of families has changed over that period. You don't have so many families with a full time breadwinner and a full time homemaker anymore. Instead you have more two-earner and more no-earner families, which exaggerates family inequality.

Umm.... yeah. That was about 10 minutes of her talk, what you just said. Except she, you know, actually explained more exactly how it works, and had charts, and data, and numbers, and stuff.

So watching the video was sort of like reading a lot of the comments in this thread, except she actually took the time to read about the shit she was talking about before she started running her mouth.
posted by illovich at 6:54 PM on May 1, 2008

It's interesting to think about the fact that they all work the same hours, to collectively produce the same product - legal services - but they are not compensated equally. Now, some people would argue that is because the lawyer is more "productive" than any of the support staff, but since that productivity usually measured by their compensation, it's a tautology.

Too right. I hope you have an operation tomorrow, so you can suggest that the surgeon and the assistant switch places. Same hours, same skills, right?
posted by Durn Bronzefist at 7:36 PM on May 1, 2008

Too right. I hope you have an operation tomorrow, so you can suggest that the surgeon and the assistant switch places. Same hours, same skills, right?
posted by Durn Bronzefist at 10:36 PM on May 1 [+] [!]

I didn't say they were exactly the same.

But I wouldn't want to go into surgery without a nurse or an anathesiologist either. My sucessful surgery is a group effort - if you want to talk about the 'productivity' that surgery represents, you must understand it is the product of a group (and yet further people, like cleaners and orderlies and food services...)

Pulling apart the tangled web that is status, credentials and actual skill which translates into wages is nearly impossible (and it is a tangled web of all of these things, as well as demand).
posted by jb at 8:05 PM on May 1, 2008 [2 favorites has favorites]

Of course it's a group effort. So let's have a second nurse stand in. Same # of people.

What you're willfully ignoring is the difference in skill, and perhaps ability. The surgeon could walk in tomorrow and replace the nurse for a day. The reverse would not be true.

But don't let that get in the way of your rhetoric.
posted by Durn Bronzefist at 8:29 PM on May 1, 2008

What you're willfully ignoring is the difference in skill, and perhaps ability. The surgeon could walk in tomorrow and replace the nurse for a day. The reverse would not be true.

Perhaps you're missing the point? Would you be comfortable with the surgeon operating without nurses to assist? Without janitors cleaning the OR before you're wheeled in there? Without AP clerks cutting checks to the power company to make sure the lights stay on during the procedure? You might be but I'll bet money the surgeon wouldn't be. The surgeon example makes me think of the old saw about there being 10 support people for every soldier on the front line. Just because you don't see them, or credit them if you do, your surgery isn't going to happen without them.
posted by MikeMc at 9:35 PM on May 1, 2008 [1 favorite has favorites]

The surgeon could walk in tomorrow and replace the nurse for a day.

Hahaha... They are different disciplines and have only the faintest relation to each other (look up patient outcomes pre modern nursing if you have any doubts about this, when doctors were doing the nurse’s job as well).

But I'll meet you halfway and say that before a surgeon gets to practice, perhaps s/he should go through training as a CNA, surgery tech, and nurse, and maybe a few years floor time.

Most anything anymore is so intertwined and scaled back that there are no unimportant jobs (even your burger flipper is your final defense against a rash of nasty diseases from undercooked meat and maintaining sanitary conditions). You are like the roofer who tries to take credit for the entire house.
posted by quintessencesluglord at 10:34 PM on May 1, 2008 [2 favorites has favorites]

Durn Bronzefist - Find yourself a nurse and ask her/him about surgeons! Then you'll know why I respond to your comment with:

HAHAHAHA bwwhahahaHAHAHA hooo....
posted by crazylegs at 12:05 AM on May 2, 2008

OK, now, after having watched the video, I have this to say: Excellent video, stupid thread. Except for the supplementary links provided by some posters.
posted by Laugh_track at 5:08 AM on May 2, 2008

here're some supplementary links between wages/compensation and productivity :P

Some factors aren't in dispute. Since the end of the recession of 2001, a lot of the growth in GDP per person -- that is, productivity -- has gone to profits, not wages. This reflects workers' lack of bargaining power in the face of high unemployment and companies' use of cost-cutting technology. Since 2000, labor's share of GDP, or the total value of goods and services produced in the nation, has fallen to 57% from 58% while profits' share has risen to almost 9% from 6%. (The remainder goes to interest, rent and other items.)

cheers!
posted by kliuless at 6:41 AM on May 2, 2008

Most anything anymore is so intertwined and scaled back that there are no unimportant jobs (even your burger flipper is your final defense against a rash of nasty diseases from undercooked meat and maintaining sanitary conditions). You are like the roofer who tries to take credit for the entire house.
posted by quintessencesluglord at 1:34 AM on May 2 [+] [!]

Yes, burger flippers are important. You would be an idiot to think otherwise. No fast food place can get by without labour, and it's just about their highest expense. Would you rather be handed raw meat? That's called a "grocery store", and even then we feeble people require people to lay that raw meat out for us.

My point is that the carpenters or the architechs shouldn't take credit for the entire house either.

And if you want to say that services and other low-paid jobs are unimportant, try going without them for a few weeks. Don't buy any food out, don't get a coffee at Starbucks (because you are so clearly skilled, you can make it yourself, can't you?), don't shop at grocery stores - go and buy straight from the farmer. Slaughter the animals yourself if necessary. Don't let street cleaners go by your house; if you are in charge of your office, give all support staff a few weeks free leave, including the cleaning staff.

Up thread, the original poster showed an ignorant and elitist attitude towards jobs which did not require degrees. They are not unskilled - they require varying amounts of skill and apptitude (I have a masters degree, and I couldn't file as well as my mother who has no degrees), as well as a lot of plain old hard work (often harder and less rewarding than most well paying jobs). I think that some people of a certain class just have never worked such jobs, never known anyone who worked such jobs, and have no idea what kind of work is involved. There is an anthropogist who has written on working in a meat packing factory; this man, with multiple degrees, was going on and on about how skilled the workers there were, and how stupid he felt when he began.

As for what people are worth: I said above that it is a complex web of skills, status and demand, and culture. For anyone who argues that it is skills and/or "importance" alone, that is poppycock - or early childhood education people (they have specialised degrees, and are given responsibility for the well being of your children) wouldn't be so poorly paid. But they are because the job is both low-status and supply is high compared to demand.

There is also cultural stickiness - people aren't willing to pay (or to have their gov't pay) above a certain amount. Lawyers are highly skilled, but also have a high supply compared to demand, which should drive their wages down. But that is a profession which has been high status for centuries and where the cultural idea of what you pay them is set at a high point to start with. I've hired an incompentent lawyer; she still demanded $1000 for a few hours work, didn't tell us to do anything we hadn't already thought of and it went to negotiation -- all of this work could have been done by the rental legal advice office in our city for no cost to us, and a fraction of the cost to the city. Yes, doctors have more years of training than nurses, but fewer years of training than a PhD in epidemiology -- guess who gets paid more?

I think this really does matter -- and to bring it back to the original topic -- with the dying of the manufacturing sector in the developed world, more and more of us are going to be working just those low paid service sector jobs. Our societies are becoming divided between a rich professional class who demand high wages on their own perceived importance, but refuse to recognise the contributions of the rest of society. Those middle class families that are collapsing are drivers and filing clerks and cleaners -- and there was this brief period in history when society seemed to raise its head and say that, yes, that work is respectable too, but it's pulled itself back into the turtle shell of elitism.

Maybe you don't have to worry about it, because if you've already made it, the declining social mobility and the willingness of upper class families to push and claw for their children's future means that their children will be lawyers, no matter how incompetent or useless, and can freely look down on the people who make their clothes, their food, drive their taxies -- because those people just aren't productive.

Or maybe, just maybe, you could show some respect towards your fellow human being and recognise their contributions, see how your lives are all intertwined. Yes, if that lawyer isn't sucessful, all of his staff will lose their jobs. But if his staff are incompetent, he will lose his job (and don't think he can so easily replace them - turnover costs money, and good support staff are not a dime a dozen - my mother has watched companies go out of business after losing good support staff). Frankly, capitalists and labour need each other, just as the professional and service and manufacturing and primary sectors all need each other. We have a specialised economy, where no one person's work is sufficient to keep it going, but relies on hundreds, thousands, millions of other people. The buger flipper is essential to that economy, as essential as the doctor or lawyer. Of course I wouldn't have a surgery done by a burger flipper, but I wouldn't trust a doctor to make me a good burger either.
posted by jb at 8:15 AM on May 2, 2008 [2 favorites has favorites]

(actually, burger flipper skills in most fast food places have less to do with quality, sadly, than with speed, efficiency and reliability. But that doctor would probably be slow, disorganised, and hold up the whole production line, unless he had previously worked in a fast food place and developed the skills to work there. And when you get to restaurant cooking, even a simple diner, you are talking serious multitasking, and no mistakes allowed. Cooking is a skilled and stressful job.)
posted by jb at 8:18 AM on May 2, 2008

(Sorry, realised that I misread the comment I thought I was responding to. Good points on nurses, quintessencesluglord.)
posted by jb at 8:21 AM on May 2, 2008

While working in the administrative side of UW, I grew to wonder how it is that schools can charge so much up front with no guarantee. If I buy a vehicle, it comes with a warranty. An education does not.

I also grew to believe that the most fair way of making folks pay for their education would be to charge a percentage of future income, say 0.1% per quarter attended. That way, the successes would pay for the failures, and everyone still comes out either ahead or at least not in debt with nothing to show for it.
posted by owhydididoit at 4:10 PM on May 2, 2008

Perhaps you're missing the point? Would you be comfortable with the surgeon operating without nurses to assist?

Perhaps you're not reading my post? I had just suggested an extra nurse on site, so you have your assistant. If you're just talking about an extra pair of hands, well sure. And yes, burgers don't make themselves, and someone has to make the nails that the carpenter hammers in for the building that the architect designed. If that's your entire point, I will concede every bit of it. If that's the point of the post, it's a pretty basic one, and one that less people would disagree with than you apparently imagine.
posted by Durn Bronzefist at 9:07 AM on May 3, 2008

nosila: Does my heart right to see a fellow female Texas expat ... doing such great, appreciated research.

I don't know the extent of her Texas affiliations, but I took two classes from Prof. Warren, and in both, she made it quite clear that she considers Oklahoma her home state.

BTW, I realize I'm three weeks late on this thread (I was on vacation when it started, only found the thread because of the new inequality thread), but just in case anyone reads this far: Professor Warren is not an expert econometrician, and I suspect that she is unaware of some of the finer points and technical details of modern data analysis. But she is an expert (the expert, some would say) on bankruptcy law, and she has sensibly decided that in order to be able to understand the social significance of bankruptcy and implications of certain policy proposals related to bankruptcy, she might need to examine how people actually end up in the bankruptcy system, and why, and the extent to which the bankruptcy institution helps them, and whether it is effective in achieving the goals for which it supposedly was designed. Alarmingly, this attitude is not at all common among legal scholars (though thankfully, it is becoming somewhat moreso).

To understand bankruptcy, Professor Warren and her coauthors have collected an amazing amount of data - including large panel surveys, actual direct interviews with people in the system, and the kind of hard (linked) data on income, expenditures, demographics, fine-grained court filing data (including the finance statements in each case), and outcomes that gets "real" economists all excited. None of the economists studying bankruptcy had access to that sort of data before she and her co-authors started researching the issues, so there may be reason to question anyone else's earlier research in the area. And while Professor Warren may not be a Ph.D. econometrician herself, she works with some, and she has a cadre of research assistants at Harvard who sometimes have degrees in economics, sociology, and other social sciences. She is also remarkably good at recognizing when she doesn't have the full story - so her research has continued to expand to explore alternative explanations for observed phenomena. So I urge anyone with an interest in the issues to watch the video, or read one of her papers, or otherwise check out some of the actual research she has done.
posted by dilettanti at 8:23 AM on May 20, 2008

« Older Keyboard calligraphy... | William Finnegan reports... Newer »

This thread has been archived and is closed to new comments

The Coming Collapse of the Middle Class May 1, 2008 2:22 AM Subscribe

The Coming Collapse of the Middle Class
May 1, 2008 2:22 AM Subscribe