The 14 Words

Wednesday, 23 October 2013

Poof Goes the Middle Class


Imagine a future in which real wages for most workers decline year after year; a future in which middle-class jobs that disappeared in the Great Recession won’t be coming back; a future in which young Americans either squeeze into an increasingly wealthy elite or tumble to the bottom, with fewer and fewer in what we once called the middle class.

Actually, that’s a description of the present. The future looks even bleaker, according to libertarian economist Tyler Cowen. For his new book, “Average Is Over,” Cowen projected current trends out over the next 20 years. His conclusion?
“Our future will bring more wealthy people than ever before, but also more poor people,” he writes.
“Rather than balancing our budget with higher taxes or lower benefits, we will allow the real wages of many workers to fall — and thus we will allow the creation of a new underclass.”
Remember, Cowen isn’t adding or subtracting anything from what’s already happening. He’s merely forecasting based on current trends: middle-class American jobs being eliminated by automation and outsourcing, downward pressure on wages for all but the most skilled, growing inequality between the wealthy and everyone else, and elected officials who don’t seem capable of slowing those trends, let alone stopping them.

And that’s not all. Cowen foresees a future in which employers constantly measure individual workers’ performance “with oppressive precision,” the better to weed out underperformers quickly; a future in which retirees, their savings exhausted, move to newly built shantytowns (like “the better dwellings you might find in a Rio de Janeiro favela”) in low-cost states like Texas; a future in which the new underclass, instead of rebelling against the elite, consoles itself with online entertainment and scientifically improved narcotics to make life palatable.

OK, at this point you’re probably asking: What kind of monster is this guy?

Not a monster; merely an economist.

“I’m not prescribing these outcomes, I’m just predicting them,” he told me recently over lunch in a Korean restaurant near Virginia’s George Mason University, where he teaches. (When he’s not predicting a dystopian future, he maintains a website devoted to ethnic restaurants around Washington.)

“Think of it as an unvarnished version of reality,” he said. Besides, he adds, some things about the future look pretty good.

As the American economy becomes ruthlessly more efficient and more productive, he expects the economic elite to grow to as large as 15% of the population — people who will “live like millionaires,” even if they aren’t making a million dollars a year.

They’ll include the elites of today, plus technologically adept professionals in fields from robotics to healthcare whose jobs can’t be shipped overseas, plus an upper servant class of service workers to the rich.

Read More: Here


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