Economics, Foreign Policy, Politics, Top Stories

Will Workers’ Wages Ever Go Up Again?

Self-employment, temporary employment, on-call work, home-based work, and telecommuting are becoming more common. In some countries, such as Australia, nearly half of the workforce falls into one of these categories.

The growth in these types of employment opportunities is often attributed to the rise in app-based gig employers like Uber or Lyft. The employment contract signed by those working in the gig economy is very different from what workers in goods-producing industries had come to expect during most of the postwar era. Back then, for example, you knew when you were working. There were regularly defined work hours (normally 40 hours a week, assigned at a fixed time). These days, your gig employer practises just-in-time labour, putting you on perpetual standby. The company will call you when they need you, thanks. And they might need you for only 10 to 15 hours in a week.

And don’t count on receiving much in the way of the non-wage benefits unions negotiated for most industrial workers in America. Get sick or need dental work as a part-time employee in the gig economy? Sorry, companies don’t pay health-care benefits to part-time workers or “independent contractors,” as gig workers are classified by so many of their employers. Vacation pay? Let one of your other part-time employers cover that. And as for a pension? That’s something your government should provide.

Uber and Lyft have both been hit with numerous lawsuits over the legal status of their drivers, but they claim that the independent-contractor status of their workers is essential to the viability of their business model. The state of California has recently passed legislation that requires these companies to treat their so-called independent contractors as actual workers. Labour groups are pushing for similar legislation in other states. It’s debatable just how robust that business model is, however, since neither Uber nor Lyft, despite the billions they’ve raised from investors, has made a profit. Nevertheless, it’s certainly worked out for those in the C-suite. Uber’s five top executives pocketed $143 million between them last year. And their former CEO, Travis Kalanick, became an instant billionaire when the ridesharing company made its debut on the New York Stock Exchange.

As their businesses have grown, these companies have adjusted their payment algorithms in ways that have left less money in drivers’ pockets. The Economic Policy Institute calculated that Uber drivers earn, on average, an hourly wage of $9.21 after deducting expenses such as fees and commissions. In most of Uber’s major markets, that’s below the statutory minimum-wage rate; but since the drivers are classified as independent contractors, they are not covered by minimum-wage requirements. And since the average Uber driver doesn’t last for more than three months on the job, how they feel about their paycheque is a non-issue; they are totally expendable.

With more and more employment contracts following this model, it’s not hard to understand why we haven’t seen much wage growth in the service sector over the past few decades—and why an ever-greater reliance on the booming gig economy points to even weaker wage gains from the sector in the future.

This is especially bad news for millennials—now the largest segment of the labour force, and the cohort most likely to work in the gig economy. Roughly half have a second job to make ends meet. They are the most college-educated generation in history, raised by parents who were convinced that higher education was a pathway to success. But all that education hasn’t translated into higher wages.

The average salary of American millennials is disproportionately lower than the national average. They are doing a lot worse than most of their parents did at the same age—earning about 20 percent less—and their college education has left them with a record $29,000 in student loan debt on average, which costs $351 per month to repay. In Canada, according to the OECD, only 59 percent of millennials had attained the minimum salary threshold for middle-class status, defined as $29,432 (or 75 percent of the median national income). Sixty-seven percent of their parents had reached the middle class by the same age. In other words, millennials are falling behind, even though they’re working harder than their parents did.

What’s happening to millennials, and indeed all workers, is not supposed to be happening, according to economic theory—and not because it seems unfair. Economic theory has nothing to say about fairness, but it has plenty to say about the relationship of wages to unemployment rates. And what it says is that something is wrong. Stagnant wage growth in the face of low unemployment is an anomaly; it flies in the face of what economists used to refer to as the Phillips curve, which is part of standard macroeconomic theory. On one axis is the unemployment rate; on the other is the rate of wage increases. The higher the unemployment rate, the lower the rate of wage increases. The lower the unemployment rate, the higher the rate of wage increases.

What the Phillips curve tells us is that during economic good times, employers are more willing to pay higher wages to hire additional labour. Why? Because profits are higher, and strikes become more costly when business is booming. But when sales slump during an economic slowdown or a recession, businesses don’t need to hire as much labour and are less likely to grant large wage increases to attract it. For their part, workers are less likely to demand them, knowing that they’re lucky to have a job.

So, with unemployment rates at or near record lows (at least before the pandemic), why didn’t workers strike to demand larger wage increases in the way they’ve done in the past? If you want the answer to this question, head down to your local union hall and ask some of the angry old men hanging out there. Their tale pretty well explains why the Phillips curve is no longer working in today’s labour market.

For the most part, the angry men are blue-collar workers who used to have well-paying jobs in industries like autos or steel, and belonged to unions like the United Automobile Workers (UAW) or the United Steelworkers. In the old days, they would have voted Democrat (if they were American), but the leadership of the Democratic Party since the Clinton presidency has abandoned them in favour of global trade treaties that rendered them expendable. Until Donald Trump came along and courted them, many had stopped voting altogether.

They had good reason. To them, it didn’t matter if Congress was Democratic or Republican, or who was sitting in the White House. Nobody cared about them or their concerns. When it came to the new trade agreements being negotiated, they were the first to lose their jobs, and they would be the last to be rehired, if such a thing ever came to pass.

What made them a primary target of the new trade deals? Those union-won wages and benefits. That was, after all, the whole idea behind organizing a union in your plant—union action got workers higher wages and better benefits. Unions set the market price for labour by forcing companies to bid as high as they could pay.

But globalization changed the rules. Now companies could buy labour wherever they wanted, and what was once a virtue for workers suddenly turned into a vice. Once trade barriers fell, unionized plants were the first to be shut down in favour of the new global supply chains that were being forged with cheap labour markets all around the world. Job losses in unionized plants have been double those in non-union (and generally lower-paying) shops.

It shouldn’t come as a surprise to anyone that as union membership shrank, so too did workers’ wages. The right to collective bargaining, which in the past covered as many as a third of all private-sector workers in the US economy, now plays a marginal role in the labour market. You can also credit right-to-work legislation—enacted in 28 US states as of 2019—that enables workers in unionized plants to opt out of paying union dues, hence undercutting a union’s ability to finance itself. Take unions out of most workplaces, and you get a different dynamic than in bygone days: The firm sets the wage, and you can either accept it or not work there.

Union membership hasn’t just fallen markedly in the United States. As a percentage of the labour force, it has declined across OECD countries, even in those that traditionally had the highest rates of unionization. And it’s not just “angry old men” who have lost their union jobs to cheap overseas labour; women are affected, too. Still, the job losses for male union workers have been far more severe than for their female counterparts.

The reason is largely sectoral. Male union members have tended to work in goods-producing industries, like manufacturing, that have been on the front lines when it comes to the invasion of cheap imports from low-wage countries. For example, three-quarters of US manufacturing jobs are held by men. Female union membership is heavily concentrated in the health and education sectors, much of it in the public sector, where, in sharp contrast to the goods sector, employment is still growing and union membership is still relatively strong. It’s harder to offshore a teacher or a nurse than it is a welder.

Elsewhere, the story of declining union membership is much the same. Union membership as a percentage of the labour force in the once highly organized United Kingdom has fallen by about a third. More or less the same reduction has been seen in Germany. In Canada, union membership as a percentage of the labour force has declined by about a quarter. But nowhere in the OECD has union membership fallen more than in the United States, where less than 10 percent of the labour force now belongs to a union.

But even that economy-wide number, which includes government workers, understates the true extent of the decline in union membership in the private sector. During the 1950s, at the zenith of the labour movement, one in every three American workers in the private sector belonged to a trade union. Today, just one in 20 private-sector workers still does.

That precipitous decline has had widespread implications. Unions didn’t just raise wages and benefits for their own membership; they also had a big influence on raising wages for unorganized workers who were employed in highly unionized industries or regions. That was particularly true for manufacturing industries operating in the highly unionized north-east and mid-west parts of the United States.

Back in the day, if you didn’t want your workers to organize a union, the best way of keeping one out was to closely monitor collective-bargaining agreements and, if need be, match union rates. So, when 50 percent of truckers belonged to a union like the Teamsters, their settlements had a big impact on what the unorganized 50 percent were getting paid. But today, when less than 10 percent of truckers are unionized, the other 90 percent can’t expect to get much of a pay lift from their wage settlements.

All of this explains why you rarely hear about workers going on strike anymore, no matter how tight labour markets appear to be. You can’t go on strike for a pay raise if you don’t belong to a union—and even if you’re one of the few workers who still belong to one, your union’s bargaining tactics today are very different from what we used to see in the past.

With the threat of plant closures hanging over negotiations like the sword of Damocles, union priorities have shifted from bargaining for wage increases to bargaining for job and pension security. Strikes have become virtually suicidal. What invariably happens on the rare occasions they do occur is that a fleet of trucks rolls into a plant after midnight on a giant repo operation to cart away all the machinery they can remove before padlocking the factory gates. And the next thing you know, the firm has opened a new plant in Mexico and has sold the factory to some developer who’s going to build luxury condominiums.

That, in a nutshell, is why the Phillips curve no longer works.

 

 

Excerpted from The Expendables: How the Middle Class Got Screwed By Globalization by Jeff Rubin. Copyright ©2020 Jeff Rubin. Published by Random House Canada, a division of Penguin Random House Canada Limited. Reproduced by arrangement with the Publisher. All rights reserved.

Featured Image: Sears Roebuck employees on strike, March 15th, 1967.

Comments

  1. The author certainly is correct in pointing out ‘globalization’ has been a disaster for many light manufacturing industries.

    Missing from his analysis is the impressive wage gains under the Trump economy. Especially for minorities. Also missing is the role of unrestrained immigration plays, at least with regards to the US work force. Hard to get a raise when there is always someone waiting to take your job.

    A breakdown on union issues, like corruption, elitism (unions often wont easily permit workers to work for other unions, etc), the significant fees associated with them, etc., would have made a nice paragraph or three.

    I also would have liked to see the numbers on the recent resurgence of manufacturing in the USA. Finally some speculation about the future of manufacturing jobs would have pointed the way forward. De coupling supply chains with China is real, but are those jobs going to Michigan, or Myanmar?
    What about Brexit? The new NAFTA? An aging Japan? Korea? The article could have looked at all kinds of additional tangents.

    All in all a good article, but also a fair bit missing.

  2. Generally, a good essay, but there are several parts missing from the story. Apart from anomalies in areas such as branded goods or finance, it is competition that strips labour, not profits, at least over the long term. Also, many of the gains made by the top 10% (and the top 1%) relative to the bottom 90%, represent the fact that the market is rewarding those who can find efficiency saving and strip labour processes, like never before. This is because a globalised economy is generally hyper-competitive- still about profits, but existentially more about business survival.

    Nobody want to address the elephant in the room. The type of transitional economic shifts discussed in Jeffrey Sachs book The Ages of Globalisation has created a shift from traditionally masculine low skilled, semi skilled, skilled and trade professional work towards generally feminine work in the tertiary sector. A significant portion of male population is incapable of making this transition, not least because the education system is producing endemically high rates of functional illiteracy and innumeracy.

    Adding low skilled (and adjacent) migrant labour to the available pool is a disastrous policy, with incalculable social costs. Little work has been done in the US to study the effects of migration on different parts of the income spectrum, but the UK has about five studies which have looked at the income spectrum. Now, the loss of 5% to 8% of wages at the bottom of the spectrum might not seem like a lot, nor does a 2% reduction in labour participation rates within the host population, but taken together with a shift from traditionally masculine to more feminine-preferred labour, this shows an absolute catastrophe for male workers in the bottom 50% of the income spectrum and one which can be measured in terms of broken families and single parent homes, worse rates of mental illness, higher rates of homelessness and the deaths of despair only Andrew Yang was willing to talk about in the recent Democratic Primaries.

    Labour is a commodity like any other, and with over 80% of recent refugee, asylum seeking and illegal immigration to the UK comprised of working age males, with most them competing in the low skilled and semi skilled space- and the US likely comparable in this respect- it is little wonder that 20% of males in their twenties are economically inactive in the US, with the market for labour even worse for males over forty in many parts of the country.

    It is also worth noting that many gig workers are quite happy with the more flexibility work routine that the gig economy offers. Recent legislative limits to the number of stories a freelance writer can submit to an employer in California has proven disastrous for freelance writers based in California.

    The passage of Assembly Bill 5 offers some relief: freelance writers, editors, photographers and editorial cartoonists were given a partial carve-out, allowing publishers to hire them for up to 35 separate “content submissions” in a given year.

    This Government intervention, this move by government to introduce an element of force and coercion into what should be a purely voluntary exchanges, has robbed many workers of their income and made it impossible to sell their labour unless they relocate. And who will be worst hit by this legislation? Not the sprawling and entrenched media powerhouses safe and secure in their market dominance, but rather the small and new media outlets offering their customers more choice in the media landscape, and an escape from the manufactured consent of established media.

    In a recent talk at the Oxford Union Nobel Prize-winning economist Richard Thaler quipped that the working classes in the UK were emancipating themselves. It’s well worth a watch and available on YouTube. And what he said is essentially true- because in aftermath of the 2008 global financial crash, many workers simply took their compulsory redundancy pay and set up their own businesses. Over a million made this transition. Not only did many shift from the construction industry to the home improvement and repair market, saving their newfound customers money in the process, but there was a whole slew of new business types springing up or experiencing massive growth from previously tiny niche sectors. Dog grooming and paid dog workers servicing several customers at a time, are just a couple of examples.

    So perhaps the question Will Workers’ Wages Ever Go Up Again? is the wrong question. Perhaps a better question would be when will Government realise that they need to create an environment that is conducive to self-employment and small business entrepreneurship. One way to do this would be for State Governments to provide some form of temporary underwriting assurance so that prospective entrepreneurs are not put off by the thought of their family losing their healthcare. And, of course, it goes without saying that there needs to be a serious look at the disproportionate cost of regulatory compliance for new enterprises.

    Government doesn’t need to help, it needs to get out of the way.

  3. and the US likely comparable in this respect

    I think the agricultural sector of California in particular would collapse if all illegal immigrants were to magically disappear from the state.

  4. And 20% of the male workforce unable to compete against lower paid, harder working migrants, which the rest of society is forced to pay for in terms of welfare, disability and social costs. In theory you might disagree, but in practice you’re already paying. Or do you really think that it costs $3,000 per EMT incident? The costs of more Americans being homeless or drug addicts are externalised to consumers, even through private insurance. So there is no way for even a libertarian to escape the increased costs, unless you want to forego your private health insurance.

  5. I see now. My mistake.
    My point still remains. If I choose not to take a job because it does not offer what I consider appropriate compensation that is my choice. If however someone drops a population of individuals into my market who are willing to live at a significantly lower standard of living how is that really different from them taking the job away from me. I understand the benefits to society of immigration but usually after a wave of immigration we close the doors for a while to assimilate the immigrants restoring a new equilibrium. That has not happened this time. At least not in California.

  6. But nowhere in the OECD has union membership fallen more than in the United States, where less than 10 percent of the labour force now belongs to a union.

    Of course, the US has the highest wages of the OECD also.

  7. This is true and obviously observed in the US labor market. The two lowest quintiles of wages have been stagnant, but overall the standard of living has risen.

    There are 3 factors at work though: automation, global trade and low skilled immigration. All 3 of those have impacted low skilled wages in the US.

  8. You might want to get on Michael Lind, with his new-ish book, The New Class War. It would be good to have a counterpoint to these ideas as well, because unionism was not an unambiguously Good Thing back in those days (which I remember the tail end of).

    Globalization (at least uncritically open to imports from developing countries), large fluxes of illegal immigrants, dysfunctional educational systems, the college-educated/non-college-educated division, assortative mating at said colleges, the decline of the family in the working and lower classes – that sums it up.

    You won’t find many so-called “progressives” willing to talk about these issues, except for the occasional oddball like Lind. They’re far more interested in career-promoting identity politics and watching Nike commercials. For example, you’ll never hear them talk about the damage that illegal immigration has done to many parts of the US or how much both native-born Americans and legal immigrants hate it. Few political issues feature such a wide gulf between the general and popular view and elite opinion

    And thank you, Jeff Rubin, for correctly presenting the Phillips curve as (real) wages versus unemployment. It’s often presented as general inflation or price level versus unemployment, which is wrong. That’s the false idea in the heads of the Federal Reserve. They should be looking at real wages.

    That said, the decline of the clout of the working class didn’t start in the 1990s. It began in the late 60s and early 70s, with the Great Inflation set off by the Vietnam War and the Great Society (the Johnson-Nixon era). Those outside of union contracts, and even many of those in, could not keep up with inflation. That was the first blow to the widespread postwar middle- and working-class prosperity, made more painful by the oil price shocks of 1973 and 1979 and dramatically slowing productivity growth. Only in the last few years, thanks largely to better trade deals and enforcement against the hiring of illegal immigrants, have wages started to accelerate their gains and almost get back to the trend of general price inflation. That connection was broken in the early 1970s, almost the day the US went off the gold standard (in 1971). Pay ordinary people in fake, unstable money, then spend 20+ years driving down interest rates on safe investments appropriate for most people (not speculators), and you will see their standard of living decline.

    Even more striking is that the wage increases of recent years have been concentrated among black and Hispanic workers, because these workers are more affected by downward pressure from illegal immigrants than college-educated, Zoom-watching technology workers.

    It is an even crueler irony that the two biggest blows to the US working class came from Democratic presidents, Johnson and Clinton. Nothing Republican presidents did from 1945 on compares to the damage wrought by these two. The working class benefited from less reckless policies, and more stable monetary conditions, like those of Eisenhower, Kennedy, and Reagan. Trump is a spotty and uneven character, intuitively understanding some of this, but without a political framework or stable coalition (i.e., a functional political party, not just a collection of wealthy donors).

    This is the big sociopolitical and socioeconomic class division in American society. The party that is supposed to be for “little people,” the Democrats, has become thoroughly part of the problem. That sums up what’s wrong with our politics in many ways. One party is clueless, the other is lost in the endless corridor of identity navel-gazing and keeping voters distracted.

  9. Stagnant wage growth in the face of low unemployment is an anomaly; it flies in the face of what economists used to refer to as the Phillips curve, which is part of standard macroeconomic theory. On one axis is the unemployment rate; on the other is the rate of wage increases.

    The author thinks the Phillips curve isn’t descriptive but he’s failing to put it into context. Due to global trade and low skilled immigration the Phillips curve has expanded to include not just the niche of the countries labor force but to include the globally connected economies. The wages are rising just as the Phillips curve predicts. But they are rapidly rising in 3rd world countries.

  10. Well, there are a number of factors here. First, Keynesian full employment economics had pushed the balance between labour and capital so far in one direction by the seventies that capital was losing money and value (hyper inflation). So the balance needed redressing. Second, inward low skilled migration put a downward pressure on wages for the bottom two quintiles. Third, globalisation and offshoring transferred income growth from the first world to the developing world.

    image

    As you can see this has been an extraordinarily positive thing for most of the world’s poor. Global absolute poverty halved between 2000 and 2012. But it has also hollowed out the income of the least fortunate in the developed world. It’s why Western countries should pursue an immigration policy very similar to Australia’s massively successful program. Market dominant migration increases total wealth, it gives opportunities to those best able to exploit them and prevents the corrosive Social Darwinism in the bottom two quintiles of the income spectrum, which has become commonplace in most of the rest of the West.

  11. Oh good, another useless economic book/article from Jeff Rubin. Where to even start on this nonsense.
    “Standard Macroeconomic Theory” has always been wrong in the sense it is developed by academics and not representative of real world conditions. The Phillips curve is a perfect example of useless economic theory - it tries to take a complex subject matter/metric and drill it down to a singular cause/effect - “when unemployment goes up wage increases drop”. Employment levels are determined by many factors including international capital flows, tax rates by country, political risk, tax rates, interest rates, technological change, etc, etc. It is not simply a singular cause and effect.
    Ever wonder why governments and economists have never been able to predict the business cycle?

    If an economy is in a major disruption (as when the economy moved from agriculture to industrial) - who else would you expect to have the largest adjustment? The middle class in 1st world countries make up the majority of the employed and they pay the most into the tax base.

    And I am sorry if the plant worker screwing in bolts has lost his $30/hr job to a guy in China making $30/mth - the US was built on taking all the British manufacturing away - it was cheaper in the US.

    So few people look at the larger picture and the long term trends. 2nd world countries are now more innovated and the people are hungry to get to the middle class level. This is the way it always goes and always will go, it is human nature. Unions are now needed in 2nd world countries, they serve no purpose here now. Time to adapt and move along. Companies will always pay wages that allow them to make and sell a product at a reasonable profit. if 1 company is making 'too much ’ profit another one will come in and price the product lower. Adam Smith’s Invisible Hand.

  12. They become public charges

    That’s not an inevitability, that only happens because of socialistic policies. First you rob the individual of familial support, then make him dependent on the state.

  13. What is ze in?

    Autocorrect kept trying to “fix” the pronounce ze, talk about a micro aggression.

  14. No, because the accumulation of capital in the hands of the few is one of the things that you actually want. Now, granted there are probably about 5% to 10% of billionaires who gained their wealth through crony capitalism or be exploiting tricks which added no value to society, but most gained their wealth through either making things easier for people or designing new products which caught the public imagination. These are the people we want allocating capital in our societies, for the simple reason that they’ve been proved right, repeatedly.

    Where we perhaps could agree more is that there should be simple and minimum levels of tax existing as a bare minimum, which no-one should be able to avoid or evade, with the possible exception of the net loss carry forward. America also has a weird system of classifying property as a wasting product, which is probably some misguided attempt to stimulate house building, which it doesn’t. Many countries, like Sweden actually do a relatively good job at collecting their 28% CGT. No business owner should pay a lower rate of tax than their secretary.

    People should worry less about the accumulation of wealth at the top, and more about people’s general standard of living at the bottom. There tends to be a misconception that it’s the drive for profits which strips labour and lowers wages. This is incorrect, other than for branded goods and certain sectors like media, it’s competition which accomplishes this- and good job too, otherwise we would all still be working for a dollar a day, scrapping potatoes out of fields 12 hours a day.

    It’s also worth noting that a large part of personal wealth calculations is completely erroneous, and has to do with the oversupply of money inherent to fiat money and fractional reserve lending- that’s where you should be focusing. Because in our current system this notional money accumulates in share prices and property values, completely skipping its formerly useful role, and massively overvaluing many businesses, because of capital surpluses. A far better use of printed money would be to allow every citizen, regardless of status, a zero interest lending facility for anyone who doesn’t have coverage for healthcare through public or private systems. It could be built upon a pay-us-when-you’re-dead premise. The fact that this bad debt would mostly be eaten by the federal reserve shouldn’t concern us at all- they’ve been doing that for years with far larger sums, with little or no negative consequences.

    My brother is a head chef. Because of COVID his part of the market (mid to high end rustic or modern British food, to eat in) has radically shrunk. As a consequence, he has found himself operating a high speed potato riddling line at 45. The work may be hard, but I know full well that he enjoys the social aspects of the job and the sense of achievement. By contrast, he would be crawling up the wall, if he was on furlough. He was an actuarial technician at one point, was a summer intern at Jaguar when he was studying Management Science, and also has a Masters in Computers. He just found that at 35 he didn’t like office work, especially the politics.

    Social incentives can be just as powerful as financial considerations. But we do need incentives, and its usually best to include this with some form of measurable performance related pay. One of my bugbears is that incentives don’t always extend down to the lowest rungs of society, because managers believe they can motivate people to get it for free. This is incorrect, proportional pay rate systems perform 50% better than flat rate systems, shown through industrial engineering studies as an average.

    A great example I used to quote was from a British Secret Millionaire. The millionaire wanted to investigate why cleaners were getting paid nearly twice as much at one site, as their counterparts on other static caravan sites (static mobile homes). Upon further investigation he found that the woman supervisor operated a stringent entrant selection scheme, including highly selective job trials, method study, and a high morale atmosphere of continuous improvement. As a consequence, the cleaners were cleaning four times as many caravans per hour, at noticeably higher standards. They deserved twice the pay, because they were doing four times the work. They also had higher morale because they felt they were doing an excellent job.

    Stress and financial security can be factors here, but I would argue that fears over job security can be worse. If we look at where the problems of drug addiction and suicide are worst, we can see that the biggest problems emerge where 45+ men find themselves suddenly thrown on the scrap heap and unable to find work, and for twentysomething young men who have never managed to find themselves a secure productive role. The other factor is Social Media- it has had a hugely negative impact on girls in particular, who are less likely to play games, and far more likely to gain a poor body image and experience reputation damage through Social Media.

    You can’t have any kind of hierarchy with this type of system. So no organisation and no leadership, because it only works when contributions are voluntary rather than conditional. This means no direction and no clear objectives. A prime example, would be all of the socialist-style Kibbutzim. They were, almost without exception, complete failures- and where they did marginally succeed, it was due to highly responsive and charismatic community leaders who were able to hold it all together. These individuals would be selected out of any socialist system, because collectivist systems loath the exceptional. In many circumstances, women would offer sexual favours to hyper productive males as a form of compensation for their hard work, so even in systems without money, some form of currency emerges…

  15. Great comment

    It’s not anecdotal, but hardly scientific- a few years back I watched a modern British historian on a documentary detailing the Seventies. It was his observation that exactly at the point that consumerism kicked in during the seventies, with older men absenting themselves from football stands, for trips to the DIY store on a Saturday, or visits to the Garden Centre with their wives, that we saw the rise of football hooliganism- so older men might tolerate a few abusive chants, but not young lads throwing sharpened pennies into the opposition’s stands.

    This ties in with a study which a fellow QC commenter mentioned (but I don’t have to hand), which showed that for every 1% reduction in the level of fathers in a community, the juvenile crime rate increase by 3%. A trend which can often follow on into adulthood. Obviously, a systemically higher rate of criminal history with a community can make a huge difference in future earnings potential, especially in America where culturally, there is a clearer distinction between good guys and bad guys.

    On the positive side, I think you’re right that it’s difficult to tie down causation, but that’s likely more to do with the complexity of trying to boil down causation to a single cause or a few salient factors, that any doubt in the causation itself. Psychology shows us that there are many ways in which fathers in the home improve social functioning for children, this probably multiplies and magnifies out through fundamentally healthier peer groups, producing comparative advantage.

    Another aspect is a sense of agency- research into a sense of agency imparted during education shows an 8% increase in the chances of African American men joining the middle class by later life, and fathers also probably serve as a good source of agency at a community level. We just don’t know how beneficial a high number of fathers can be in a community, in terms of embodying potential iterative life paths for young boys able to spot men similar to them, and to see themselves in similar roles when they are older. There is also the extent to which young men need to gain the stoic voluntary assumption of lifelong burden, which frames most men’s lives.

    Probably true. We know that hypergamy is a basic fact of life. Women will date an attractive man who is popular with his peers, even going so far as to have his baby- but she won’t settle into a stable long term relationship with him, unless he is productive. It’s interesting that social mobility tends to diverge by sex for African Americans. There are a couple of short PBS segments which interrogated Dr Raj Chetty’s work for public consumption.

    They showed that African American women had slightly higher social mobility than white women, although on average were still paid 11% less due to the inherent lower start position of coming from a lower single parent start position. But the stats for African American boys were truly abysmal. A household with $120k a year income, performed as though it was a household with only a $35k income. This points to fathers being far more beneficial for boys, than for girls, and the reason why I think peer group moderation is key.

    The only instances where African American boys performed at the same rate as white boys was in the rare 1% of instances where boys came from a two parent household, with a high proportion of fathers in the community and were situated in more integrated communities- with the last two factors likely implicitly linked through the data, but probably also a matter of a more diverse peer group.

    It’s often the exceptions which prove more informative, and this outlier group does more to argue the case for fathers than anything else. It also might point to the incredible importance of personal narrative, with boys possible far more likely to give up in the face of personal narrative of nebulous disadvantage- either by race or by class, and girls far more likely to seek support and comfort in their peer group.

    In terms of ‘causation working both ways’, it’s likely a particularly perverse social feedback system is to blame here. Despite social progress on interracial marriage people largely tend to marry or have relationships with their own communities, especially at the bottom end of the socio economic spectrum. The in-group is usually higher for poorer people.

    This creates a cul-de-sac of social mobility, regardless of race, but more prevalent for some than for others. Simply put, there is a shortage of productive eligible young men to settle down with, resulting in higher rates of single motherhood for poorer folks. And its only going to get worse looking at university admissions by sex, unless something is done to promote vocational training for young men.

    Archaic divorce laws are a key factor here, although admittedly one of many. Historically, men were far more likely to marry down and women were far more likely to marry up. This allowed for a lot more social mobility through marriage. Perhaps now that women are becoming increasingly likely to be stung with a punitive divorce settlement and alimony, the law might finally be revised to something approaching fairness. This in turn might restart the dynamic of social mobility through marriage.

    Although plenty of positive changes came out of the sixties and seventies, this was one thing the permissive society got wrong. If only conservatives had taken a compassionate approach, thinking in the interests of the children, instead of a more condemnatory approach aimed at short term election success, Western societies might be in a far healthier condition.

    If we think about it in anthropological terms, almost every culture around the world had a mechanism for a rites of passage, mainly meant to implement the symbolic passage from the feminine sphere of influence, to the sphere of male supervision, as soon as boys hit puberty. And on a biological level, we can all remember that urge to pull away from mother’s apron strings (an anachronistic way of putting it, but true nonetheless).

    We have to wonder whether that there might have been other cultures out there which didn’t have this social transition from the feminine to the masculine, for boys. It could be an incredibly benign social mechanism for helping teenage boys to deal with the emergence of status-seeking biological aggression as they develop towards adulthood, helping them channel that aggression into productive activities.

    We have to consider the possibility that cultures which don’t possess this mechanism might be rare or non-existent because they destabilised internally because of rampant unchecked male aggression, or externally because the lack of productive men made them unable to compete with other groups for resources. This might not bode at all well for our future, even with the mitigation which modernity and advanced policing can offer.

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