WORÞY READS: from 2021-03-12
A preview of my weekly read-around for the Washington Center for Equitable Growth
Home base for this: <https://equitablegrowth.org/insights-expertise/value-added/>
Worthy Reads from Equitable Growth:
1) It used to be that there were high-wage occupations and high-wage firms, and that these were different and, to a large extent, countervailing sources of income inequality. But over the past generation this has ceased to be the case to a remarkable degree. How much of this is deunionization? How much of this is tech winner-take-all, and why has modern tech been so friendly to winner—or, rather, winning-team—take all? These are still profound mysteries to me:
Nathan Wilmers & Clem Aeppli: Consolidated Advantage: New Organizational Dynamics of Wage Inequality: ‘The two main sources of inequality in the US labor market—occupation and workplace—have increasingly consolidated. Workers benefiting from employment at a high-paying workplace are increasingly those who already benefit from membership in a high-paying occupation. Drawing on occupation-by-workplace data, we show that two-thirds of the rise in wage inequality since 1999 can be accounted for not by occupation or workplace inequality alone, but by their increased consolidation.
This consolidation is not attributable to firm turnover or to how occupations have shifted across a fixed set of high paying firms (as in outsourcing). Instead, consolidation has resulted from new bases of workplace pay premiums. Workplace premiums associated with teams of professionals have increased, while premiums for previously high-paid blue-collar workers have been cut. Yet the largest source of consolidation is bifurcation in the social sector, whereby some previously low-paying but high-professional share workplaces, like hospitals and schools, have deskilled their jobs, while others have raised pay. Broadly, the results demonstrate an understudied way that organizations affect wage inequality: not by directly increasing variability in workplace or occupation premiums, but by consolidating these two sources of inequality.
2) Fresh off the press, this is a very nice survey indeed of the childcare-affordability problem in America today:
Taryn Morrissey : Addressing the Need for Affordable, High-Quality Early Childhood Care & Education for All in the United States: ‘In 2017–2018, most children in the United States under 6 years of age—68 percent of those in single-mother households and 57 percent in married-couple households—lived in homes in which all parents were employed. Most of these families require nonparental early care and education…. 12.5 million of the 20.4 million children under the age of 5 living in the United States (61 percent) attended some type of regular childcare arrangement…. Families with young children are spending more on childcare than they are on housing, food, or healthcare….
I argue that greater policy attention to early childcare and education is warranted for three reasons: High-quality early care and education promotes children’s development and learning, and narrows socioeconomic and racial/ethnic inequalities. Reliable, affordable childcare promotes parental employment and family self-sufficiency. Early care and education is a necessary component of the economic infrastructure….
A universal early care and education plan, particularly one with a sliding income scale to provide progressive benefits, may not pay for itself in the short term, but will very likely do so in the long term by boosting broad-based U.S. economic growth and stability while narrowing economic inequality…
LINK: <https://equitablegrowth.org/wp-content/uploads/2020/02/Morrissey.pdf>
3) The Chicago Law-and-Economics rollback of anti-trust was not the worst thing to happen to America over the past half century. But we now have enough evidence to be confident that it was definitely a bad thing for the health of the American economy:
Fiona Scott Morton (2019): Modern U.S. Antitrust Theory & Evidence Amid Rising Concerns of Market Power & Its Effects: ‘The experiment of enforcing the antitrust laws a little bit less each year has run for 40 years, and scholars are now in a position to assess the evidence…. The bulk of the research featured in our interactive database on these key topics in competition enforcement in the United States finds evidence of significant problems of underenforcement of antitrust law.
The research that addresses economic theory qualifies or rejects assumptions long made by U.S. courts that have limited the scope of antitrust law. And the empirical work finds evidence of the exercise of undue market power in many dimensions, among them price, quality, innovation, and marketplace exclusion. Overall, the picture is one of a divergence between judicial opinions on the one hand, and the rigorous use of modern economics to advance consumer welfare on the other…
LINK: <https://equitablegrowth.org/wp-content/uploads/2019/05/052819-antitrust-lit-rev.pdf>
4) I did a podcast on an excellent new book by Mike Konczal: Freedom From the Market: America’s FIght to Liberate Itself from the Grip of the Invisible Hand <https://books.google.com/books?id=0aDLDwAAQBAJ>. I have long tended to be a believer that wealth equality plus sufficient attention to dealing with Peruvian externalities and with information and cognitive processing problems will bring us as close to material economic utopia as we can get. Mike comes out of a very different tradition: that even under those conditions people will still be imprisoned by the market in a profoundly dystopian sense. He has powerful arguments on his side. And his book is an example of the very nice work currently being done at the Roosevelt Institute:
Mike Konczal, Noah Smith, & Brad DeLong: Freeing Us from the Market: ‘Konczal says that it is only today that “glib libertarians” purveying “fantasies” are trying to make us forget “that free programs and keeping things free from the market are as American as apple pie…” One of the best passages in the book is where he notes the connection between the Fight for $15 minimum wage campaign and human freedom:
Service sector workers demanding a $15 minimum wage and a union… have already won huge victories [with] ideas about how low-wage, precarious work is a form of unfreedom…. The Rev. William Barber noted that ‘it took 400 years from slavery to now to get from zero to $7.25 [an hour]. We can’t wait another 400 years’ to get to $15…
Ultimately, if all you can say in response to the ills of society is “the market giveth, the market taketh away, blessed be the name of the market…” you have very little to say indeed. Konczal quotes Oliver Wendell Holmes’s fear and alarm that his fellow justices on the Lochner Supreme Court were, in their “willingness to use a very specific understanding of economics to override law, writ[ing] a preferential understanding of economics into the constitution itself…” in a fundamentally illegitimate and societally-disruptive way. But a better maxim is: “The market was made for man, not man for the market”.…
LINK: <https://braddelong.substack.com/p/podcast-hexapodia-v-freeing-us-from>
Worthy Reads from Elsewhere:
1) Can twitter <http://twitter.com> be a useful information utility, rather than a time sink, a distraction, and a source of misinformation?
I am a believer that a properly pruned twitter account can actually save you time and amplify your ability to learn things you want and need to know. But I am coming to the conclusion That turning one’s twitter account into such a productive space is too much work for it to become the rule. Today’s Worthy Reads serve as an example. This “elsewhere” tranche is all directly and indirectly from the top of my twitter feed. But to get it so required an immense amount of pruning. If you are willing to put the effort into pruning, however—and then into repruning—I do believe that you will find that very valuable things are growing underneath all the thickets of thje misinformation thorns. The first item surfaced is the thoughtful Will Wilkinson, discussing how National Review is now in the business of pretending that even Mitt Romney is their very scary spectre of Antifa:
Will Wilkinson: Work Requirements Hurt Children: ‘[Oren] Cass’s choice to cast himself as a champion of conservative ideals against ideologically blinkered Jacobin fanatics suggests that he would rather that readers of the National Review come down with a convenient spot of amnesia about the fact that we’re talking about a bill by Mitt Romney.… There is this… 60 percent of single moms are non-white…. [Cass’s] implication [is] that partnered stay-at-home moms don’t need a disciplinary state to inculcate and reinforce market-related virtues, but unpartnered stay-at-home moms do.
If non-working solo parents are denied the child benefit, which kids disproportionately take the hit?… I’d like to hear more about the mechanism through which Cass believes that work requirements will generate upward mobility that leaves some of America’s poorest children better off than they’d have been if their families had been given no-strings-attached cash assistance….
[Cass] has told us that “the Left” is ignorant and impolitic. I’ll save the question of the causal role of poverty in permanently mangling children’s brains and mental health for a separate post. Spoiler: there’s no question that it does. The hurt is literal and it can last a lifetime…
LINK: <https://modelcitizen.substack.com/p/work-requirements-hurt-children>
2) The semiconductor manufacturing industry feels to me very much like the steel industry circa 1900: immense capital requirements and a very few firms worldwide that acquired and managed to maintain a lead of several technological generations over actual and potential competitors. What I dearly, dearly Wish I could find right now—but what is evading me—is a recent history of what has happened to Intel’s tick-tock strategy. How has it been stuck at what it calls 14 nm processes for generations in semiconductor chip manufacturing time:
Christian Le Miere: ’What’s particularly striking about this BCG forecast of semiconductor manufacturing capacity is not just the increase in China, but the fact that 75% of predicted capacity will all be in Northeast Asia. A clear sign of Gideon Rachman’s Easternisation…
LINK: <https://twitter.com/c_lemiere/status/1370362803656212485>
3) I have long thought that running so much of the social insurance system through the Treasury, the IRS, and the ax code is a significant mistake. We started doing this with the EITC simply because Senator Russell Long was chair of the Senate Finance Committee. And we are still doing it. It will require a lot of work to make the CTC work the way it does in the dreams of its proponents. And I do not yet see any sign that anyone in the administration is taking ownership of making this work:
Annie Lowrey: ’In the past few days, I’ve talked to a bunch of folks who will get the monthly CTC cash allowances, and none had any idea the money is coming.. It’s a really complicated policy change (“a monthly advance on a newly fully refundable tax credit” is, I mean, even my eyes start to cross) and I hope there’s a concerted effort to increase awareness and participation rates…. This is a good calculator / explanation! One thing to note is that you won’t get the money unless you file taxes, so super important for parents to do that even if their incomes are so low they don’t have to https://www.washingtonpost.com/business/interactive/2021/child-tax-credit-calculator/:…
LINK: <https://twitter.com/AnnieLowrey/status/1370082017036038149>
4) Very smart people seem to me to have the wrong intuitions with respect to how the labor market works, numbers of jobs, and the role of training. I believe that what we need to do is to simultaneously: (1) boost demand for the labor of normal people—labor that can be effectively and excellently done by people who bring to it nothing more than the East African Plains Ape evolution-cognitive toolkit—and (2) finding and funding much better ways for people to get the skills and experience needed for those jobs the require lengthy training outside the standard evolution-cognitive toolkit. Seeking to have tech giants in some sense “grow their own” is, I think, a distraction. The tech giants’ demand for workers is a drop in the bucket of the economy as a whole. But if they could construct learning paths and certifications trusted out in the economy as a whole… it could do an immense amount of good in rebalancing the labor market.The key is to shrink the technical-education premium—and as the technical-education premium shrinks, low-wage jobs become higher paying jobs, and as low-wage jobs become higher paying jobs, they command more respect:
Zeynep Tufekci: ’This is marketed as “Google’s plan to disrupt the college degree” <https://www.inc.com/justin-bariso/inside-googles-plan-to-disrupt-college-degree-exclusive.html>. These plans come-and-go; don’t work (for obvious reasons); BUT if they actually commit to hiring the graduates of this one, that would matter. (Google itself tends to hire from a tiny number of elite schools). If Google, Apple, Facebook et al.—which hire a lot from Harvard, Berkeley, CMU, Stanford, MIT etc—change their own hiring practices for technical/engineering roles, yeah that could disrupt the college degree (unlike offering a certificate which is fine but isn’t disruptive). (I started as a self-taught technical person—tween coders of the world unite—got a job, paid my own way through college/degree, worked professionally later so I’m not at all dismissive of that route but lol to disrupting the college degree until they start hiring differently).
To finalize the point, more training is fine but there’s decades of research that the (obvious) key problem in the US job market is scarcity of good, stable jobs across the education ladder. (Also always check where people who run these things send their own kids). Anyway, I really, really hope Google themselves and these 130 companies named actually hire the graduates of this program—and also hire more graduates of non-elite universities and other non-college-grads, too.…
LINK: <https://twitter.com/zeynep/status/1370375926350020613>
5) How long has it been since any Republican politician endorsed any unionization drive? Certainly this is not how Marco Rubio approaches unionization drives in the hospitality industry in Greater Miami. I confess that I find myself with a rather cynical take on this. Romney won, with his child tax credit, the approval of perhaps the last remaining slice of non-fascist Republican intellectuals. And Romney’s child tax credit proposal was a good policy idea as well. Rubio, I think, believes that the approval of those whom David Brooks trails after could be an important part of his 2024. Thus he is seeking to counter Romney, but without doing any policy work. And he is crossing his fingers that his plutocratic base will see this not as anti-plutocracy but rather as merely yet another culture-war skirmish:
Eric Levitz: ’Rubio is oddly honest about how contingent his support for labor is: “When the conflict is between working Americans and a company whose leadership has decided to wage culture war against working-class values, the choice is easy—I support the workers”…
LINK: <https://twitter.com/EricLevitz/status/1370378107866251274>:
Mike Allen: Marco Rubio Sides with Alabama Warehouse Workers in Amazon Union Battle: ‘Rubio writes that one of his “earliest political memories was marching the picket line with my dad in a Culinary Workers Union strike when he worked as a hotel bartender. The lesson I took from it—all workers deserve respect‚has stuck with me all throughout my career,” Rubio writes. “Our laws should help build more productive relationships between labor and businesses, the vast majority of which treat their employees with dignity and want to work cooperatively with them”…
LINK: <https://news.yahoo.com/marco-rubio-sides-alabama-warehouse-120848054.html>
6) I confess that I do not see us as Living in an age of stifling liberal consensus. I see us as Living in a Gilded Age in which authoritarian nationalism is still on a powerful forward march worldwide. But to each their own, I guess:
John Ganz: Which Way Leftist?: ‘The [early 1900s French] Socialists actually had mass support of workers in the streets, and the decision of when to use and spend that power was an essential question. The Socialists Blum and Jaurès… managed to stake out a position between mere reformism and uncompromising revolutionism…" insisting that the parliamentary republic was the institutional framework within which the socialist must work to achieve their goal, he never abjured the idea of revolution and the class struggle.”
The left in America today is… weird…. The idea that this [Biden Administration] is some kind of liberal trap and the correct path is back out into the wilderness seems wrong….
On the other hand, I can see the argument for maintaining some kind of oppositional coherence in the face of a stifling liberal consensus…. I temperamentally and philosophically prefer Popular Front-ism…. I do not particularly want to be a part of a subculture—I was already a teenager once…. I do hope we can make a more decent and dignified life for people in this country in my lifetime…
LINK: <https://johnganz.substack.com/p/which-way-leftist>
7) Things are finally, once again, better than they were at the peak of the crisis a year ago. But my fear is that the relaxation of social distancing will keep us from rapidly reaping the harvest we ought to get from the success of the vaccination program:
Charlie Bilello: ’Covid–19 hospitalizations in the US were down 13% over the past week, the 58th consecutive day of week-over-week declines. Now down 71% from their peak on Jan 6. Covid–19 deaths in the US continue to decline, now 55% below their peak on Jan 13. Deaths are a lagging indicator and will continue to move lower in coming weeks if hospitalizations stay down. Should see a sub–1,000 number by April…
LINK: <https://twitter.com/charliebilello/status/1370367885898567684>
8) In 1993 the Republican Rarty, under Newt Gingrich, learned that America’s media establishment would always consider illegitimate any policy that was not halfway between Republican and Democratic demands. That gave the Republicans every incentive to be extreme as possible, and no incentive whatsoever to take any care that the policies they proposed might, you know, actually work. It is 27 years later. The media establishment seems still to be in this particular trap. That is to our substantial national detriment:
Greg Sargent: The Real Lesson of the Feud Between Susan Collins & Chuck Schumer: ‘Many senators are supposedly shocked, shocked by a feud that has erupted between their colleagues Charles E. Schumer and Susan Collins…. Many GOP senators are treating this as a teachable moment: If Schumer (N.Y.) and Democrats want bipartisan support in the future, by golly, they’d best treat the most gettable Republican with a whole lot more respect! This is a teachable moment, but in an entirely different way: It shows yet again how confused and obfuscatory our discourse is around “bipartisanship.”…
During the debate over the $1.9 trillion relief package, you constantly heard media figures asking whether President Biden and Democrats could “do more” to “win bipartisan cooperation” from Republicans, as though this could have been secured by acts of personal gladhandling or other mystical rites that went unspecified, and that this would have been an inherently good thing. But the only thing Democrats could have done to win such bipartisan cooperation was to dramatically scale down their package. And so, those who suggested that winning bipartisan cooperation would have been an inherent good were necessarily offering an opinion on policy: They were saying a much smaller package would have been a better outcome than what did happen, because it was bipartisan….
Schumer said on TV that Democrats learned their lesson from 2009 and would not chase after bipartisan support forever, adding that “Susan Collins was part of that mistake.” Collins took great umbrage, and insisted there had been no outreach to her at all on the stimulus. She declared it the height of folly to “alienate the most bipartisan member,” suggesting that winning future cooperation would now be far harder. Numerous other GOP senators echoed that sentiment. But there’s no reason to believe any amount of outreach would have won over Collins. Recall that Collins and Republicans backed an amendment that would have scaled down the package to one-third its size…
There's a lot of harmony between these two pieces #6 and #8- Ganz: "The left in America today is… weird…. The idea that this [Biden Administration] is some kind of liberal trap and the correct path is back out into the wilderness seems wrong…." Sargent: "those who suggested that winning bipartisan cooperation would have been an inherent good were necessarily offering an opinion on policy: They were saying a much smaller package would have been a better outcome than what did happen, because it was bipartisan…." In other words, the Left and the Middle in U.S. politics seem to be doing what they can to sabotage real policy reform, by undercutting the boldest programs that can actually be passed, for different ideological reasons. Or because they listen to different Pied Pipers, Sanders on the left and GOP leadership on the right. Pray that Schumer gets religion and Sanders takes a back seat!