This was a week of extremely big news: two seminal Supreme Court decisions and then President Obama's literally amazing eulogy for Rev. Clementa Pinckney slain in last week's horrific mass murder in South Carolina. (This week's inspirational gospel music). Your editor found the speech full of many quotes pertinent to the work we do but will add just one about the good reverend:
He embodied the idea that our Christian faith demands deed and not just words. That the sweet hour of prayer actually lasts the whole week long. That to put our faith in action in more than just individual salvation, it's about our collective salvation. To feed the hungry, clothe the naked, and house the homeless. It's not just a call for isolated charity, but the imperative of a just society.
In the New York Times, Thomas Edsall asks a provocative question given the extreme rise inequality and the dim prospects for economic mobility in the United States: "why don't the poor rise up?":
Ulrich Beck, a German sociologist who died earlier this year, noted the obstructions to collective social action. In 2002, in his book “Individualization,” Beck wrote that those who in the past saw co-workers as colleagues and allies now face competitive pressures such that when “a shared background still exists, community is dissolved in the acid bath of competition.” The result is “the isolation of individuals within homogeneous social groups.”
Beck goes on to contend that in advanced nations people have been released “from traditional class ties and family supports.” That has forced people to use their own resources to determine their “fate in the labor market, with all its attendant risks, opportunities and contradictions.”
..Insofar as individualization has taken hold in the United States, the prospects for collective action on behalf of the poor are dim, at best.
Collective action on behalf of the poor requires a shared belief in the obligation of the state to secure the well-being of the citizenry. That belief has been undermined by what Beck calls the “insourcing” of risk, transferring obligations from the state to the individual.
Meanwhile, also in the NYT, Margaret Sullivan discusses the the paper's decision to create a beat focused on the "super rich":
It’s not intended to play into what some readers and observers scornfully term “wealth porn” — the attention paid to high-priced possessions, from apartments to, well, doughnuts. Rather, it’s intended to recognize the effects of a new Gilded Age in America, and to write about it in a sweeping, big-picture way.
Other are focused on the super rich as well, taking another bite at whether traditional philanthropy and the fight against inequality are at odds. In the Wall Street Journal, hedge fund manager Andrew Kessler says don't look to the Ford Foundation, which recently pledged to tackle the issue head on; look to Henry Ford:
The bulk of the Ford Foundation’s assets came when it received 88% of the nonvoting shares in the Ford Motor Company, most after Henry Ford died in 1947. Ford hated inheritance taxes, then a punitive 70%. In 1956 Ford Motor went public at $3.2 billion. Most of the shares sold were from the Ford Foundation, about a quarter of its holdings. The foundation’s charter stated the money should go “for scientific, educational and charitable purposes, all for the public welfare.” How times have changed.
This story matters because people have lost sight of where foundations got the money they’re donating. Ford Motor was worth $3 billion 60 years ago because it was profitable and investors had high expectations, not because the company raised wages to $5 a day, a popular myth. Ford Motor was profitable because Henry Ford created scalable assembly lines, reduced the cost of the Model T to under $300, and sold 15 million of them...
[T]he most productive thing someone can do with his money—the only thing that will increase living standards—is invest. If the Ford or Clinton foundations really wanted to help society, they’d work on lowering barriers to business formation and cutting the regulatory chains that inhibit productive hiring in the U.S. and globally. But what fun is that? Better to boast about reducing inequality, public welfare be damned.
On the other side, Pablo Eisenberg argues in the Chronicle of Philanthropy foundations may not be ready to really toe the line on inequality:
The work of private foundations, while laudable, is also not going to transform the national state of inequality. Most foundation money is going into innovative services, increased job training, improved education programs, better research and data collection, or efforts to remove bias in police work and the criminal-justice system.
What’s needed, however, is more money for advocacy, organizing, and legislative activities that can transform the fabric of our society, approaches that foundations are reluctant to underwrite. To date, only a relatively few foundations have been willing to embrace such an activist agenda.
Over at National Affairs, Nancy Hoffman and Robert Schwartz discuss "paths to upward mobility" and make a case that we should stop thinking of high school as only a path to college in favor of more vocational training:
Many people think that vocational education is a wonderful thing — for other people's children. If [career and technical education (CTE)] continues to be seen primarily as a solution for at-risk youth and for students who can't be expected to do serious academic work, it will never gain the resources and political support it needs to be fully effective. Most important, it will never gain the serious engagement of the employer community. Employers may be persuaded to participate out of a sense of corporate social responsibility, but unless and until CTE becomes a mainstream system serving a very broad range of young people, employers will not see investing in CTE as a way of building their own future workforce.
Many years ago, sociologist William Julius Wilson argued that social programs directly focused on the poor were less likely to gain political traction than programs that were targeted especially to help the poor but were embedded within a more universal design, as in the case of Medicare and Social Security. The career-pathways movement needs to be designed and understood as a strategy to improve the economic prospects of a broad range of students, not just the poor. Given the underemployment of young college graduates and the rising student-debt burden — along with the growing evidence about the high returns on two-year technical degrees — middle-class parents are beginning to re-examine the notion that the only successful outcome of a high-school education is enrollment in a four-year college.
So, since the next generation has just graduated, we thought you might like to revisit the student loan issue via this cartoon from Randy Bish at the Cagle Post:
This week has seen lots of coverage on the future of work, a topic your editor finds very pertinent to the idea of helping people help themselves out of poverty. Over at the Atlantic’s there's this cover story by Derek Thompson on “a world without work,” where in the near future robots replace humans in the workplace:
What does the “end of work” mean, exactly? It does not mean the imminence of total unemployment, nor is the United States remotely likely to face, say, 30 or 50 percent unemployment within the next decade. Rather, technology could exert a slow but continual downward pressure on the value and availability of work—that is, on wages and on the share of prime-age workers with full-time jobs. Eventually, by degrees, that could create a new normal, where the expectation that work will be a central feature of adult life dissipates for a significant portion of society...
Frase belongs to a small group of writers, academics, and economists—they have been called “post-workists”—who welcome, even root for, the end of labor. American society has “an irrational belief in work for work’s sake,” says Benjamin Hunnicutt, another post-workist and a historian at the University of Iowa, even though most jobs aren’t so uplifting. A 2014 Gallup report of worker satisfaction found that as many as 70 percent of Americans don’t feel engaged by their current job. Hunnicutt told me that if a cashier’s work were a video game—grab an item, find the bar code, scan it, slide the item onward, and repeat—critics of video games might call it mindless. But when it’s a job, politicians praise its intrinsic dignity. “Purpose, meaning, identity, fulfillment, creativity, autonomy—all these things that positive psychology has shown us to be necessary for well-being are absent in the average job,” he said.
The post-workists are certainly right about some important things. Paid labor does not always map to social good. Raising children and caring for the sick is essential work, and these jobs are compensated poorly or not at all. In a post-work society, Hunnicutt said, people might spend more time caring for their families and neighbors; pride could come from our relationships rather than from our careers.
Over at Foreign Affairs, Erik Brynjolfsson and Andrew McAfee discuss whether humans would go the way of horses when it comes to replacing workers or if we again will adapt to change:
It is extraordinarily difficult to get a clear picture of how broadly and quickly technology will encroach on human territory (and a review of past predictions should deter anyone from trying), but it seems unlikely that hardware, software, robots, and artificial intelligence will be able to take over from human labor within the next decade. It is even less likely that people will stop having economic wants that are explicitly interpersonal or social; these will remain, and they will continue to provide demand for human workers.
But will there be enough demand, especially over the long term, for those two types of human labor: that which must be done by people and that which can’t yet be done by machines? There is a real possibility that the answer is no—that human labor will, in aggregate, decline in relevance because of technological progress, just as horse labor did earlier. If that happens, it will raise the specter that the world may not be able to maintain the industrial era’s remarkable trajectory of steadily rising employment prospects and wages for a growing population...
It’s time to start discussing what kind of society we should construct around a labor-light economy. How should the abundance of such an economy be shared? How can the tendency of modern capitalism to produce high levels of inequality be muted while preserving its ability to allocate resources efficiently and reward initiative and effort? What do fulfilling lives and healthy communities look like when they no longer center on industrial-era conceptions of work? How should education, the social safety net, taxation, and other important elements of civic society be rethought?
In current times, this San Francisco-based ride sharing company has a novel idea--simply hiring people. And McKinsey has a new report on the economic impact of the internet of things. Forbes’ Jean Case thinks millennials might have more power than machines in influencing the workforce of tomorrow:
You’ve been told – perhaps even warned, that this is the largest, most diverse and educated demographic to come of age. You’ve probably heard over and over again that they are going to disrupt our institutions with their technological tendencies and re-envision our corporate culture with their collaborative approaches. And they’re going to do so whether we like it or not.
This week in a 60-38 vote, the Senate passed a law granting the presidency “fast-track” negotiating authority on a Trans-Pacific Partnership (TPP) trade deal, reports The Hill. Supporters of the deal maintain that the demolition of tariffs on U.S. exports, as well as the affirmation of U.S. labor and environmental standards on the part of member countries will contribute to increased exports, higher wages. They say it also would create a fairer playing field for U.S. businesses who compete with Pacific companies that possess the dual advantage of being protected by tariffs while also facing less strict labor and environmental regulations. Over at the Chicago Tribune, U.S. Commerce Secretary Penny Pritzker says this will be the "most progressive trade agreement" in U.S. history. Bernard K. Gordon of Foreign Affairs Magazine is optimistic about the potential of the trade deal.
The Economist in a series of charts shows why so many folks are pro-trade deals:
Among the critics are congressional Democrats and trade union leaders and others who cite the lackluster success of the Clinton administration’s NAFTA deal in 1993 as evidence that these kinds of partnerships don’t benefit middle-class workers who rely on domestic manufacturing to make a living. Joseph Palermo, an associate professor of history at Sacramento State University writes in the Huffington Post that Obama is siding with the wrong interests in pushing for fast-track authority the trade deal. Meanwhile, Josh Bivens over at the Economic Policy Institute argues it harms the middle class, and it isn't even about trade but "who will and won't face fierce global competition":
Most (not all, but most) of the countries that would be included in the TPP are poorer and more labor-abundant than the United States. Standard trade theory has a clear prediction of what happens when the United States expands trade with such countries: total national income rises in both countries but so much income is redistributed upwards within the United States that most workers are made worse off. This is sometimes called “the curse of Stolper-Samuelson”, after the theory that first predicted it. And there is plenty of evidence to suggest that it’s not just a theory, but a pretty good explanation for (part of) the dismal performance of wages for most American workers in recent decades and the rise in inequality. And the scale of the wage-losses are much, much larger than commonly realized—it’s not just those workers who lose their jobs to imports. Instead, the majority of American workers (those without a 4-year college degree) see wage declines as a result of reduced trading costs. The intuition is simply that while waitresses and landscapers might not lose their jobs to imports, their wages are hurt by having to compete with trade-displaced apparel and steel workers...
And as has been well-documented by now, much of what the U.S. policymaking class champions under the rubric of “free trade” is nothing of the sort. For example, the biggest winners from trade agreements have traditionally been U.S. corporations that rely on enforcing intellectual property monopolies for their profits—pharmaceutical and software companies, for example.