Kudoka Theater, Or Why The Middle Class Is Disappearing And What We Can Do About It

On Saturday, The New York Times’ Opinionator published an excellent piece titled, “How Technology Wrecks the Middle Class.” It is co-authored by David Autor, an MIT economist who, among other things, specializes in “income inequality,” “impacts of technological change,” and “employment protection.” The article represents a slight pushback against the extreme pessimism that some economists and scholars have advanced as a response to mechanization and computerization, which seem to be bringing us “the end of labor.”

There will be no end of labor, of course. But we are watching what may be the end of the plethora of middle class jobs that once made America widely—as opposed to narrowly—prosperous and made us the envy of the world. As the Times article explains:

Computers excel at “routine” tasks: organizing, storing, retrieving and manipulating information, or executing exactly defined physical movements in production processes. These tasks are most pervasive in middle-skill jobs like bookkeeping, clerical work and repetitive production and quality-assurance jobs.

Logically, computerization has reduced the demand for these jobs, but it has boosted demand for workers who perform “nonroutine” tasks that complement the automated activities. Those tasks happen to lie on opposite ends of the occupational skill distribution.

On one end are the “so-called abstract tasks that require problem-solving, intuition, persuasion and creativity,” which “are characteristic of professional, managerial, technical and creative occupations, like law, medicine, science, engineering, advertising and design.” On the other end are “so-called manual tasks” like cooks, truck drivers, and hotel maids, which because “their skills are not scarce,” cannot command high wages. Thus, the conclusion:

Computerization has therefore fostered a polarization of employment, with job growth concentrated in both the highest- and lowest-paid occupations, while jobs in the middle have declined.

Timothy Noah, who has written about America’s “growing inequality crisis,” was on MSNBC this morning to talk about the New York Times article and income inequality and the loss of middle class jobs. Noah says the change, which David Autor elsewhere calls “job polarization,” is worldwide, noting that the Japanese have a term for it: kudoka (“hollowing out”). But, Noah continues:

It’s worse in the United States than it is in comparable countries that are facing precisely the same technological challenge. We seem to be handling it worse here in the United States.

When asked why, he explained, an explanation that should ring in the ears of anyone who gives a damn about the possibility of restoring a robust middle class in America:

I think it’s mostly government policy. Things like the minimum wage. Our minimum wage hasn’t gone up for a long time. Our government is pretty hostile toward unions. We don’t have a good early education program. There are all sorts of government programs that in other countries focus more on the needs of the middle class and focus on creating greater income equality.

Get that? Our government, despite what you hear from reactionary Republicans, can help with the hollowing out that technology, great for us in other ways, has caused. Noah offered a few things (he left out advocating for a more progressive tax system) that can help: provide more support for community colleges, which help train “middle skill” workers; make college more affordable;  end government’s hostility toward labor unions; make sure the Federal Reserve’s monetary policy is focused on job creation; and raise the minimum wage.

As far as the minimum wage, here is a video circulating that makes a salient point:

14 Comments

  1. “Manual tasks” like flipping burgers command only the lowest wages, even with minimum-wage support. However, I can foresee that this could change in the rather distant future, and that such manual tasks could translate to “abstract tasks” because of human creativity and social involvement. It makes me think of the Subway fast-food chain.

    Why do people go to Subway when at the same store (often, Wal-mart) they could go buy the elements of the sandwich and put it together themselves for half the cost? Sure, they are saving time, but I think it’s more than that. There is interaction between customer and server. Customer stands there and directs the choices, server complies with a socially-pleasing demeanor. This is not mere mechanics, it is a kind of cultural ritual that has esthetic value. Servers who lack good people skills or a socially-pleasing face will not do as well, so I can foresee a time when this might raise their value to the employer. There is similar value in many other people-skill jobs like nursing, care-giving, and child-watching.

    Of course this doesn’t take care of the ugly, the grumpy and the mentally-ill. Society will as always have to take care of those gratis. I wouldn’t want to live in a culture that wouldn’t.

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    • Well said, Jim.

      Your comment made me think about something that I have thought about often. Why is it that some of us who drink like to sometimes go drink in public places like bars? I could drink much more cheaply at home, even invite friends over to drink and socialize. But sometimes I just like to go out and sit in a bar and talk to my friends over a beer. I am glad there are such establishments and I appreciate those who wait on me when I go. My daughter actually worked at Joplin’s 609 Club, where some of Joplin’s snooty folks often go, and she made more money there than she makes in the comparable time she spends teaching high school. There is a market, for whatever reason, for such a thing, just as you suggest there is a market, which may become more attractive for wage earners, for those who want to eat a fresh sandwich at a restaurant.

       

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  2. ansonburlingame

     /  August 27, 2013

    Duane,

    So many points to rebut, yet so little space to do so!!

    Let’s see, for starters. You seem to agree that technology has made manual labor a decreasing demand, a considerably decreasing demand. Skilled labor in much smaller numbers is required instead. I don’t dispute such “facts” or observations. But the question becomes what to do about it?

    I submit that by and large anyone working at miminum wage (or close to it) is a “manual laborer” in the sense that no particular skills are required (to flip burgers for example). Your solution is to raise the minimum wage to pay such manual labor the money that approximates the pay for skilled laborers. Hmmmmm?

    Has not a basic value in America been (for a long time) that one gets paid for what he or she is WORTH, not what he or she demands as a need? Today robots install things on assembly lines and no “nut tighteners” are needed. Only people that maintain robots are in demand, skilled technicians. Then look how hard it is using the output from public schools to meet that demand in America today. Corporations by and large must train such workers now, further cutting into growth in total revenues for such training.

    I suppose you have heard of “job shops” where workers sit in a room hoping to get a job yet are paid to sit in the room while they wait. Hmmmm?

    Do you agree that the quality of the output from public education, call it apptitue if you will, has declined considerably since the early to late 1960’s? Do you think such decline, the apptitude to be productive in a changing work place, has affected the size and wealth of the middle class in America? Long ago a high school graduate could immediately enter the work place, productively and live a middle class life style. Today a high school graduate is lucky to find a job as a “bugger flipper” but still wants to be paid as if he or she is fixing robots. Good luck on that count.

    Try this on for size. When the output from a free K12 education system meets the demands in a changing work place, changing because of technology, then you might see a return of a middle class, over time, a large group of people being paid what they are actually worth in the market place, not what they want or need.

    50 plus years ago I decided to get into the Navy’s nuclear program and worked my butt off to do so, just get into that program. That decision, my own personal decision led to a career in nuclear power, an emerging and growing field when I began my professional journey. Today I would not touch it with a ten foot pole, a career in nuclear energy. I instead would be studying my butt of to get into cyber “stuff”, get in on the leading edge of such a professional discipline, in the military or private world, today.

    You can bet your bippy such is the advice I am giving my grand kids today as they (all 11 of them) are beginning to make such life decisions in pursuit of their high school and/or college efforts. On the other hand, study only enough to learn “auto mechanics” today in school and one will likely be an “auto mechanic” for the rest of one’s life. Do you want that for your kids or grand kids, today? Yet today, some 25% of high school aged kids don’t even work hard enought to be an “auto mechanic”. They drop out entirely instead to become ………? Does that concern you and what exactly do you suggest we do about THAT problem in America today?

    Here is another point. According to some statistics seen recently, it is possible (if you believe the statistic) that 75% of all Americans age 17 – 24 are NOT qualified to serve, anywhere, in the military today. They are simply not qualified to get in on the ground floor to be trained to be in the military. 26 Million Americans in that age group are not qualifed to be “grunts” today, in the military. They are in that not qualified category for reasons BOTH medical and apptitude and I do not know the split between those two sub categories. I do suspect obesity, by and large a personal choice and not the responsibility of society to fix, is a big part of that disqualifying number.

    Do you believe obesity for any kid is a social problem or the problem of choices made by that kid and/or his parent(s)? I submit as well that “fixing” obesity is like trying to “fix” alcoholism or drug abuse and we as a society have not made a dent in that problem in America, now have we?

    My wife read recently that alcohol and drug related deaths today in America are now the GREATEST cause of death, far above that from heart disease, cancer, etc. True or not I have no idea but it makes sense to me knowing what I have seen over the years. Compare if you like the efforts today to eliminate smoking on the part of teens. Have you seen the same public effort to reduce the use of alcohol and drugs? I haven’t for sure.

    Back to the number of people not qualified to serve in the military. IF they are truly not qualified to be TRAINED to be a “grunt” just what in the world ARE they currently qualified to do, I wonder, in a modern world of today?

    Anson

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    • Anson,

      Nope, you go it wrong—again.

      1. You wrote: “Your solution is to raise the minimum wage to pay such manual labor the money that approximates the pay for skilled laborers.”

      No, the reason to raise the minimum wage is to give folks who work hard for a living, who spend the working day actually working, to give those folks a wage with which they can at least feed themselves and their family without having to apply for food stamps . Which, by the way, means the government—your tax dollars and mine—subsidizes employers like fast-food restaurants and Walmart, just as we subsidize folks who don’t have health insurance, either by paying more because of their visits to the emergency room, or, as ObamaCare will insure, by subsidizing their health insurance premiums. Why should we have to do that, when businesses are making huge profits?

      2. Please explain to me what a worker is “WORTH” and how you came to calculate that worth. Presumably when you were in the Navy, you weren’t paid what you were “WORTH.” You were paid by your grade, which was the same for everyone in that grade, right? Did the government give you a “bonus” salary because your skills were in high demand? Or would anyone who have done your job in the Navy been paid the same as you, given your experience and time served?

      3. I don’t have the slightest idea what “job shops” are. Please direct me to a definition I can understand.

      4. As far as your point about the decline in public education as it relates to the kinds of jobs a high school graduate can get these days, all that relates to the point of this piece: middle skilled jobs are being killed by mechanization and computerization. That would have happened no matter how well the education system worked, Anson.

      5. Related to the above, do you want our school system to be solely designed to supply workers for whatever industry or occupation happens to be in vogue at the time? Huh? Should we eliminate the humanities? Should we only teach students that the totality of their being is related to how they fit into a mechanized and computerized society? I don’t disagree that we ought to redesign our school system to reflect the world we live in today, but I disagree if you are suggesting that we jettison teaching kids to be well-rounded human beings and instead make them fodder for corporate needs.

      6. There is room in this world for auto mechanics, plumbers, and other know-how occupations. There ain’t a damn thing wrong with that, Anson. One of my most valued and needed services is the guy who comes, twice a year, and cleans out my sewer line. He’s a magician as far as I’m concerned. And you know what? He told me he couldn’t even get his kids to go into the business to replace him.

      7. We could mitigate the problem of dropouts if we redesigned the school system along the lines I have suggested before: offer kids in high school a couple of tracks to follow, including intellectual pursuits and vocations, etc. After a basic education in the humanities, one could then get on a path to become a mechanic, welder, plumber, electrician, computer technician, programmer, and so on. As suggested in the piece above, community colleges could complete the job.

      8. Our social problem with obesity has many fathers, including genetics. I do believe we need to do a better job of exposing those corporations who addict kids to fatty foods and sugary drinks while young and then make money off them the rest of their lives, all to the detriment of their health.

      9. As far as I can tell, heart disease and cancer kill far, far more folks than alcohol and drug abuse. Now, how much of a contributing factor to heart disease and cancer does alcohol and drug abuse represent I don’t know. But I’m guessing that our eating and exercise habits cause more deaths than our drug habits.

      10. Finally, there will always be people among us who aren’t capable of doing anything but menial jobs, or in some cases no job at all. What do we do with those folks, Anson? Kill them? Starve them to death? Watch them rot in the streets? Refuse to treat their illnesses? Refuse to take care of their kids? You tell me what kind of society you, Anson Burlingame, want to live in, one in which you have to step over folks and their kids on the sidewalks or one in which those folks are given at least a subsistence income and their children are educated and well-fed?

      Duane

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  3. ansonburlingame

     /  August 28, 2013

    For as long as America and most other capitalistic societies have existed the worth of labor has been a business decision, not a humanitarian one. You make a “widget”, that widget sells for… and you get paid…… Of course other societies have attempted a different tack, such as communism, a total failure so far, and even socialism, a partial failure, so far. America however became the greatest nation in the world while others fell by the wayside, economically and a rising standard for all in America, far exceeding the rest of the world, continued UP.

    But now……..?

    And yes, in the Navy, back then and today, “nukes” get paid a bonus, a big bonus, just for working as nucs. Jim can add his own views on that path in the Navy as to why that was done and still is being done, today. Towards the end of my Naval career, working in the Pentagon, my total pay was around 1/3 higher than for classmates, same rank and time in service, that had not become nucs.

    Now for education, briefly. Any kid with ambition today, should strive to become something that will be of value to society, value high enough to society such that his worth meets his own socio-economic goals, later on in life. Nothing wrong with learning to be a “plumber” as long as one will be content with a plumbers wage, based on his worth, not his needs, in the future.

    It seems to me that we always disagree, which does not make me wrong, over the issue of worth vs need. ANYONE that thinks they can or should live on a minimum wage for a lifetime is just not thinking straight, in my view. A minimum wage job should only be a stepping stone to higher wages based on worth to society, not some government decreed “need” such workers might have.

    As a kid, I worked “minimum wage” baling hay 10 hours a day. Good money for a kid but I sure felt sorry for the adult “field hands” trying to live on the same wages that I was making, very sorry for them. That is one reason I worked my butt off the become more than just a “field hand”, a low paying life time job, for sure.

    And no, I do not care to be walking “over poor people in the streets” either. Teaching them all to become productive citizens in a fast paced and modern world is the best step forward.

    But just keep on with your social policies as you always call for and watch America become more and more like, well you know what, up “north”. I submit that Detroit is a FAILED policy of terrible attempts at social engineering. You in turn will blame it on greedy corporations alone. We both think the other is “wrong” but so what. I certainly don’t write anywhere to change YOUR mind.

    Anson

    Like

    • King Beauregard

       /  August 28, 2013

      “ANYONE that thinks they can or should live on a minimum wage for a lifetime is just not thinking straight, in my view. A minimum wage job should only be a stepping stone to higher wages based on worth to society, not some government decreed “need” such workers might have.”

      If it’s not enough to live on — rent, utilities, food, transportation — it can’t be a stepping stone to higher wages, because you’ll starve or freeze (or be fired for lack of transportation) before your first 90 day review. ANYONE who can’t see that is just not thinking, in my view.

      That doesn’t mean minimum wage should be lavish, but if it’s not enough to meet a person’s most basic needs, it’s not a job a person can afford to take.

      Like

  4. ansonburlingame

     /  August 28, 2013

    King, do you KNOW of anyone in America, today, minimum wage or not, that is starving in the streets or freezing to death. Even IF such people exist, I submit such conditions are a direct result of their own personal choices, being too “drunk” to get into a shelter for a hot meal and a bed, or having the sense to apply for food stamps and public housing to avoid such calamities, starvation and freezing to death!!!

    A “wage” used to be payment for services rendered. You and Duane, and others as well, want wages to be dictated by “needs”. Well let’s start defining real NEEDS and maybe lower the …… minimum wage!!! TOTAL income, entitlements, wages, charity, etc. should be used to construct total finanical NEED, not “wants”. Hell food stamps alone amount to about 40% of the monthly income of a minimum wage, today. Let’s see, $8 (per hour) X 40 (hours per week) X 4 (weeks per month) = $1280 (per month) and food stamps alone add about $500 per month to that total, some $1700 per month. Then move into public housing for “free”.

    So for some $22,400 per year, no rent, no food costs, do you really think someone will STARVE or freeze to death. And such a caculation ONLY takes into account food stamps and free housing for the “poor”. America is NOT France in 1789 but you progressives sure try hard to paint a picture as if that is the case, today.

    No one in their right mind WANTS to live on such income. But live, yes they can, particularly if they refuse to make the better choices for themselves to live otherwise. But such choices must entail ADVANCED PLANNING. Just remember, some 25% of American kids today REFUSE to take advantage of a free education. Now WHY is that the case?

    Anson

    Like

    • King Beauregard

       /  August 28, 2013

      “King, do you KNOW of anyone in America, today, minimum wage or not, that is starving in the streets or freezing to death.”

      No, largely because we aren’t living in the world you call for; decent men have made sure we have a social safety net to take care of people. The majority of people on SNAP, for example, are the Working Poor: they have jobs, but those jobs don’t pay enough to provide self-sufficiency, so they buy groceries through SNAP. Unfortunately, it is a flawed safety net, and there is a big problem that needs to be addressed before the Working Poor can escape poverty: once their wages rise to a given level, assistance is cut off and they’re worse off than before. The solution seems clear enough — some sort of sliding scale of benefits — but as it is, your team is focused on miserly approaches and is not about to try to actually solve this problem.

      An increase to the minimum wage would be the best fix, so that people wouldn’t be caught in some zone where they can’t achieve subsistence but also can’t get assistance.

      Like

  5. My impression here is there is general agreement that workers should be paid what they’re worth, and the ability of a lot of workers to be productive and worth a high wage is diminishing. I think that is point of Duane’s post.

    I think the disagreement boils down to this:

    Anson generally thinks that this underclass is a result of lack of personal responsibility. People have made their own beds and should lie in them, with maybe some exception in the case of failing schools provided by an incompetent government. An improved ‘safety net’ will surely just become a hammock for the feckless.

    Most others here think that workers worth have declined largely due to factors out of the worker’s control, and should safety net be made more generous if anything to offset that, along with a higher minimum wage.

    I’m largely in the latter camp, but a little concerned that a higher minimum wage will just reduced jobs available to the unskilled even more.

    Anson, I don’t think you really address the question of the ‘hollowing out’ of the jobs with middle skills. Doesn’t this suggest that a growing share of the work force, regardless of their industriousness and responsibility, just will never be able to make a jump from low skilled to middle or highly skilled job? If you disagree with the premise, how come?

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  6. I think it’s mostly government policy. Things like the minimum wage. Our minimum wage hasn’t gone up for a long time.

    Very very few people make the minimum wage – fewer than in a long time. Further, the minimum wage is not a wage that head of households make. Typical minimum wage earners are the teenage kid or the retired elderly.

    By raising the minimum wage we effectively increase unemployment as more and more people are priced out of work. Those first jobs that we have teach us valuable on the job skills; listening, dressing, speaking, showing up on time and working together. Without those skills taught early, many workers loose precious years that could have been used to move up the job ladder.

    Last, common reflection will allow us to see that as we increase the cost of labor, people will purchase less labor.

    Our government is pretty hostile toward unions.</i?

    Unions have long ago lost any usefulness they once provided. They are now largely a hindrance to growth, a reducer in the number of jobs and have really just become a conduit of money from people to politics.

    We don’t have a good early education program.

    This is largely an emotional pull on new parents. The positive benefits of programs like Head Start fade by the 3rd grade.

    However, to be fair, the benefits that America has enjoyed are being diminished. This isa very natural consequence of the globalization of the globe. As other countries shake off generation bone-jarring poverty, it is only going to impact the US in ways that we see as negative – more jobs going over seas, more competition that pushes down wages among others. As the world improves its overall poverty problems, the US will slowly relinquish the massive advantage we’ve enjoyed.

    However, there IS good news. As the developing world is yanked out of abject poverty and wages equalize, these folks will begin to become consumers demanding products. They themselves will demand higher wages pushing up wages here.

    All is not lost!

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  7. The huge wage gap is almost entirely due to the changes in tax policy since Reagan. Technology, my ass. Technology hasn’t hollowed anything out. That’s just an attempt to explain what’s happened without having to use the word “taxes.” What the hell are some of you talking about? (Not you, Anson. I know what you’re talking about, and the less said, the better. Please stop encouraging him, people.) And it’s a red herring to talk about so-called “minimum wage” jobs as the lower end of the wage spectrum. Those are supposed to be for kids and a few part-timers. The minimum wage is still too low, but the only reason people over 25 are working at those jobs is because of the destruction of middle class jobs as a result of the horrendous government policies over the past 30+ years. Everything else is right-wing bullshit.

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    • Needless to say, I disagree with your analysis. Time doesn’t permit me right now to address all of your concerns in detail, but I will say if you don’t think mechanization and computerization have done a lot of damage to middle class jobs, I don’t really know what to say to you. I worked for and retired from the Postal Service. I started in 1979 and at that time there were close to 800,000 employees who earned middle-class wages and had tremendous benefits. Today there are just over 500,000 employees, who deliver mail to millions upon millions more delivery points than in 1979 (there are more than 2000 new delivery points added each and every day). Now, with the latest contract between the USPS and the NALC and APWU, new employees will begin as low-paid workers without any benefits, who will do the job hoping they can become career employees in an uncertain future. Almost all of the job losses are because of internal mechanization and computerization (the technology the Postal Service uses is amazing and has increased productivity exponentially) and because of external mechanization and computerization (email, etc.).

      I don’t disagree that the tax issue is important, which I mentioned in the piece, but the hollowing out is largely a product of productivity gains that come from technology, as well as exporting manufacturing jobs to labor-cheap countries.It’s this latter cause that you and I may find some agreement on, but I’m afraid both parties have blessed it through free trade policies, such policies leading to globalization and a race to the bottom in wages for Americans. (By the way, there are positive things about globalization, too, but I’m not prepared to defend it right now.)

      Duane

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  8. From a liberal source, there a post on how European inequality before taxes and transfers has increased.

    http://thinkprogress.org/yglesias/2010/09/13/198515/europe-and-america-before-and-after-tax-and-transfer/

    I think that is consistent with the fact technology and globalization are driving up inequality, not just increasing less progressive taxes. Europe has however reduced this increase more after tax than the US. The increase in pre-tax share of income by the top of income distribution also explains how the share of taxes the wealthy have increased even as their tax rates have dropped. The wealthy are paying an increasing share of taxes because their share of total income has increased so rapidly in recent years.

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