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The Dual Economy

The Dual Economy

In his new book The Vanishing Middle Class, MIT economist Peter Temin provides a short and accessible take on this country’s deeply unequal economy, which he argues now represents two different Americas. The first is comprised of the country’s elite workers: well-educated bankers, techies, and other highly skilled workers and managers, members of what he calls the “finance, technology, and electronics sector” (FTE)—the leading edges of the modern economy. A fifth of America’s population, these individuals command six-figure incomes and dominate the nation’s political system, and over the past half-century, they have taken a greater and greater share of the gains of economic growth. The other America, what he calls the “low-wage sector,” is the rest of the population—the dwindling ranks of clerks, assemblers, and other middle-income workers, and an expanding class of laborers, servers, and other lowly paid workers.

Drawing on the work of the Nobel Prize-winning economist W. Arthur Lewis, Temin describes this new reality as a “dual economy,” where the fortunes of the first America are all but disconnected from those of the second. Free trade and technological advances allow the FTE elites to make more money, pay lower prices, and enjoy an integrated global market’s many conveniences, even as those trends sweep aside many of the good jobs that the rest of America relies upon. Increasingly isolated, elites have little reason to care about less affluent communities, and much reason to want to reduce their taxes, so they tend to favor stripping away the safety net and pulling public funds from the schools the poor and middle class depend on. The American educational system, which used to be an engine of upward mobility that lifted many children of parents with few means into society’s upper echelons, has been split into two systems—separate and unequal.

Trump’s American Dream: You’ll Have to Be Asleep to Believe It

Trump’s American Dream: You’ll Have to Be Asleep to Believe It

While there are many reasons why Donald Trump won the election, it’s clear that the movement of the white working class away from the Democratic Party had something to do with it. Given that this demographic seems to have put Trump over the top in the Electoral College, what do we expect his administration’s policies to do for this group—and for the working class (which, importantly, is increasingly nonwhite) more broadly?

First, his proposed tax plan will dramatically increase income inequality in this country. It will be a windfall for elites—particularly the richest 0.1%, America’s corporate executives and Wall Street financiers—who already have rewritten the rules of the economic game to favor them. Meanwhile, it will punish millions of low-income and single-parent families by stripping away some of their tax deductions. (Ironically, the white working class that broke decisively for Trump has been increasingly falling into this latter camp.)

The Spiritual Crisis of the Modern Economy

The Spiritual Crisis of the Modern Economy

I've written a piece for The Atlantic about the hollowness of our modern economy and the effect it has on the working class. Here is an excerpt:

The modern economy privileges the well-educated and highly-skilled, while giving them an excuse to denigrate the people at the bottom (both white and nonwhite) as lazy, untalented, uneducated, and unsophisticated. In a society focused on meritocratic, materialistic success, many well-off Americans from across the political spectrum scorn the white working class in particular for holding onto religious superstitions and politically incorrect views, and pity them for working lousy jobs at dollar stores and fast-food restaurants that the better-off rarely set foot in. And when other sources of meaning are hard to come by, those who struggle in the modern economy can lose their sense of self-worth.

You can read more here. At the moment (before more Trump news pushes it off), it's on The Atlantic's front page.

Extremely Exhausting

Extremely Exhausting

The Atlantic has published a piece I wrote about living in an extreme meritocracy:

Increasingly sophisticated data-gathering technologies measure performance across very different domains, from how students score on high-stakes tests at school (or for that matter, how they behave in class), to what consumers purchase and for how much, to how dangerous a risk—or tempting a target—a prospective borrower is, based on whatever demographic and behavioral data the credit industry can hoover up.… Statistical models that measure performance have biases that arise from those of their creators. As a result, algorithms are often unfair and sometimes harmful.… But as serious as their shortcomings are, the widespread use of decision-making algorithms points to an even bigger problem: Even if models could be perfected, what does it mean to live in a culture that defers to data, that sorts and judges with unrelenting, unforgiving precision?

Here’s the full story.

A Minimum of Dignity

A Minimum of Dignity

This weekend, low-wage workers from around the country will be arriving in my city, Richmond, to make a case for increasing the minimum wage. It’s the first-ever national convention for the Fight for $15 movement, which in the past few years has launched wide-ranging strikes and protests to raise awareness about how a $7.25-an-hour wage—the current federal minimum—just doesn’t cut it for many workers struggling to make ends meet for themselves and their families.

There’s a long line of economic arguments in favor of, and opposed to, increases in the minimum wage. Among other things, opponents say it will raise prices for consumers, cause employers to slash jobs or cut back on workers’ hours, and put many companies out of business. Advocates say it will help the economy by giving workers more money to spend in their communities, encouraging the unemployed to seek out work, and reducing the stress and anxiety the working poor deal with, as well as their reliance on government benefits.

As important as the economic impacts of this policy are, however, it’s even more important to consider its cultural and moral implications. After all, that’s what drives much of the widespread public support for increasing the minimum wage, even among people who have never heard of, say, the elasticities of labor supply and demand. Many Americans just don’t think it is right that people who work hard should have to struggle so hard.

Hillary Clinton and the Art of the Impossible

Hillary Clinton and the Art of the Impossible

Hillary Clinton's acceptance speech on Thursday brought to mind the wide gap that separates those in this country who want sweeping change and those who favor incremental reform. It's played out during the presidential campaign, obviously, in the fierce primary clashes between Bernie Sanders and Clinton, and between Donald Trump and his Republican rivals. But it's also a tension that can be seen in Clinton's own politics.

Today, Clinton is the centrist foil to Sanders's bold and radical idealism. She has explicitly described herself that way. "You know, I get accused of being kind of moderate and center," Clinton told supporters last September. "I plead guilty."

Progress for African Americans? Yes, and No

Progress for African Americans? Yes, and No

All the discussions today of how much racial progress we’ve made since Dr. Martin Luther King was alive reminded me of a disturbing point about the black−white health gap mentioned in recent research, some of which I discussed in an Atlantic essay over the weekend.

According to the Centers for Disease Control, African Americans have been catching up with whites in terms of life expectancy at birth. So things are looking up, right?

Yes, and no. To a sizeable extent, what explains the narrowing of the life-expectancy gap in the last couple decades is not just that things are better for African Americans (though they have improved), but also that things are worse for whites—working-class whites above all.

Best of In The Fray 2015

Best of In The Fray 2015

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Don't Blame Canada If They're Doing What America Should Be Doing

Don’t Blame Canada If They’re Doing What America Should Be Doing

I wrote an essay that appeared in the Atlantic yesterday. Based on the research for my book on unemployment, the piece talks about the debate over Denmark in last week's Democratic presidential debate—and how the real debate should be over Canada:

Clearly, America won’t expand its social safety net to anywhere near the scale of Denmark’s over the next president’s time in office. Judging from their rhetoric in the debate, though, Clinton and Sanders both agree that government can and should play an important role in extending economic opportunities more broadly. Canada’s approach to policy shows us some of the practical ways a country can do that—without having to go far from our roots as a New World society of dreamers and strivers.

Page 99 of My New Book on Unemployment

Page 99 of My New Book on Unemployment

I participated in Marshal Zeringue's Page 99 Test at the Campaign for the American Reader. The blog is based on a quote by the writer Ford Madox Ford: "Open the book to page ninety-nine and read, and the quality of the whole will be revealed to you." New authors talk about the ninety-ninth page of their book and what it says about its larger themes. Here's what I wrote about my book Cut Loose:

Page 99 talks about how the unemployed deal with the depression and anxiety that come from losing part of their identities. Work is central to our sense of self—it’s often the first question we ask someone we meet—and during the workday we build friendships that sustain us throughout our lives. Many of the people I interviewed felt isolated. Friends could no longer relate. Relationships with spouses and children became strained. Unable to provide the way they used to, they found themselves mired in blame and doubts.

Op-Ed on the Fight for a $15 Minimum Wage

Op-Ed on the Fight for a $15 Minimum Wage

Newsday has published an essay of mine that puts the fight for a $15 minimum wage within the big-picture context of my new book, Cut Loose: Jobless and Hopeless in an Unfair Economy.

Futures for the Middle Class

Futures for the Middle Class

This week, after 167 years, the futures trading pits in Chicago closed down. Computers now handle the work that shouting traders flashing hand signals used to do. I was struck by this part of the story:

“What’s also disappearing is a rich culture of brazen bets, flashy trading jackets and kids just out of high school getting a shot at making it big. The pits were a ruthless place, but they were also a proving ground where education and connections counted for nothing next to drive and, occasionally, muscle.…”