Qualification Inflation
The second most famous alumnus of my high school (the most famous being Charles Manson) was hippie-turned-yuppie Jerry Rubin. Rubin was a prominent 60s radical activist, complete with long hair, beard, and drugs, who then morphed into a Wall Street wheeler-dealer who advocated the continuing march of corporate capitalism. I bring this up not to explore the ethics of this odd transformation, but rather to point out that it would be impossible today.
Why? Well, because today Rubin's resume would be in a pile with 100 others, up against 100 people who did not have gaps in their employment history, and who instead had the right background and right internships. It's amazing: 35 years ago a BA in sociology from the University of Cincinnati, with a several year gap as an unemployed radical no less, could get you a job on Wall Street! Today that same degree, even without the activist years, will put you in fierce competition with similarly qualified people for jobs slinging lattes at Starbucks.
Here in physics, things are certainly very different than they used to be. A generation ago, people would get PhDs from random places like Kansas State and then waltz right into permanent staff scientist positions at Bell Labs or various national labs, or even professor gigs, firmly established in the career by the time they were 26. Today people with PhDs from the best programs, average time now 6 years, routinely do at least two postdocs, all the while moving around and making crap pay, and then who knows what positions will open up.
Many jobs that a generation ago were filled with high school graduates or even GEDs now require not only college but their own specific Masters degree. I'm thinking of librarian, physical therapist, high school administrator, and so on.
Add to this mix the cost of these college and grad programs, and the insane cost of housing compared to a generation ago, and I don't understand how the vast majority of this and subsequent generations will ever be able to settle into a 'stable' adult life in the manner of our parents. Who can afford to buy a house and have kids and save a bit of money anymore? This brings to mind another telling anecdote from the past: The currently middle-aged machinist in my lab bought the suburban house the he still lives in when he was 18, having made the $3000 down payment with money he saved working during high school summers. It is now worth over $200,000. There was a time when people could actually do that! We've gone from careers being plentiful and easily accessible and housing being affordable to careers being rare and cutthroat and housing being precious. As has been said, this is the first generation in history that can expect a lower standard of living than its parents.
What happened?
The way I see it, this is basically the result of the first wave of outsourcing - the one in the 80s and 90s that sent our manufacturing jobs overseas. We almost forget now that there was a time, 35 years ago and before, when people could graduate high school and move into unionized manufacturing jobs, and they would have a house, two cars and a boat by the time they were 35. Another huge and largely concurrent force was the shifting of many jobs from being solid working class positions to work that is now done by illegal immigrants - I am thinking here of careers like construction and farming. The bottom line is that with these steps, the available pool of middle class jobs shrunk dramatically. With this narrowing of available middle class-track jobs, there were now many more people aiming for the white collar type jobs that everyone now seeks, as they were now the only remaining path to a middle class lifestyle. These white collar jobs and the poorly paid service sector are all the employment that is left for Americans.
With many more people now in the market for white collar type jobs, the de facto qualifications for any given career will certainly go up, and so it goes on up the chain of careers, giving rise to the situation we are in and that I described. The unfortunate rub is that this has benefited basically nobody.
And it is only going to get worse now that we are in the second wave of outsourcing, this time taking many of our white collar jobs away (computer programming, tech support, radiology) and in the next few years there is no reason why software architecture, financial analysis, and even hardware design can't be offshored. So, looking forward, there will be still fewer 'good' jobs available to Americans, and we will see the base level of qualifications, and the number of years spent in marginal entry level positions continue to rise for every one of these careers. Mark my words, in the coming decades, our plumbers, electricians, welders, and UPS drivers will have bachelors, then masters, then doctoral degrees in Piping systems science, Electric systems science, Materials, and Geography respectively.
What can be done? Well, if we are resigned to the situation - and many say that it is inevitable in a globalized economy - that is resigned to more and more people spending more and more time in school and more and more time in poorly paid internships, postdocs, and entry level positions of all kinds, then we must undertake some steps to make life in this new reality more palatable. Universal health care and cheaper higher education would be good starting points. Beyond that, we're going to need a lot more affordable housing. And on and on basically with a litany of European-style social programs. If we don't get on the stick, life is truly going to suck for young people in this country in the coming decades.
5 comments:
I completely agree. I think about this all the time. I think we should try and work this into a dynamic model. It could be a really important work. This is exactly why we are seeing the sub-prime mortgage market failing. People can't afford their homes, they have to take mortgages they can barely afford. It's great that they "reformed" bankruptcy law. Someone saw this coming a mile away and wanted to make sure they still got paid.
Boo hoo. Life is so hard, so let's blame everything on immigrants, outsourcing, affirmative action, and pesky international competition. Who can get by these days?
Or instead, let's actually do a quick Google search and see what the numbers really are. Is our standard of living really declining?
In fact, median household income has been rising from $35,379 in 1965 to $46,326 in 2005 (adjusted for inflation). The home price index has been nearly constant since 1890, except for the recent housing bubble, which is now deflating.
Sure, the economy has shifted away from blue-collar jobs, but we're now a better-educated workforce making more money and enjoying a higher standard of living. More cars, bigger houses, and whole lot more shit that we don't need. That's the trend that I see.
Morgan, please use logic and reason in your arguments and site your sources. Your comment is so full of falicy I have a good mind to outsource your blogging.
"Boo hoo?" That's a great tactic. "If you don't see it my way you are a pussy!" "Blame everything," I think Jack is being very specific about what he sees as being a problem. And why would you include affirmative action in your list of Jacks scapegoats? He didn't mention that.
Second, could you at least site some sources? I did a google search and found very little. I did find this:
LINK
And isn't the housing bubble something to complain about? If our quality of living isn't improving from one generation to the next shouldn't we discuss that and try and change it? Or should we stop being a bunch of pussies and suck it up?
You should retract or at least give significant edit to your flame.
See the graphs for household income here, and for the housing market here.
I know Jack didn't mention all of those scapegoats, but I mention them all because they're precisely that, scapegoats, and in my opinion they are usually overblown, and used to explain the same perceived problems. The standard of living is not falling on long time scales, and we can't blame the housing boom on the items in the above list either. Certainly the cause of the housing boom/bust is worth studying and it has hurt (and helped) many people. But it doesn't really relate to the rest of the post, because it isn't caused by the elements Jack is talking about.
I think part of the reason for the disparity between the perceived and actual standard of living is rising expectations of a middle-class lifestyle. The median square footage of new houses, for example, has risen dramatically in the last 30 years, from 1500 to 2500 square feet (source). And just think of all the extra stuff we're putting in those houses (and 3-car garages!): HDTVs, SUVs, PCs. Things aren't so bad. While changes in the economy are hard on those who end up in low-demand, high supply labor markets, (academia anyone?) I think on the whole the labor market is better than it was in the preceding generation.
Morgan,
Your statistics are hiding devils in the details:
Comparing household income in 1965 and 2007 is meaningless because in 1965 there were far fewer two income families, and those that were two income back then were not usually two career. For that reason, I think it is not meaningful to use household income to compare 2007 to 1965.
I will accept using 1989, during the peak of a previous economic expansion, to compare to 2007, as I think household career patterns were more similar then (I would also accept any point after the recession of 1991-1993 and the story is pretty much the same). So we have a rise in median income from $44,000 (according to the graph on your wikipedia page) to 46,326, or a median income gain of 5.2%. Meanwhile housing prices in the same time frame have risen by an astounding 43% (here) and gas prices have risen by 5.5% (here). And the cost of college has increased by about 80%! (here)
And furthermore, those median income statistics hide another absolutely crucial change. A generation ago and beyond, many more of those median income jobs (and lower and upper income jobs for that matter) came with fat pensions and fat no-copay health insurance plans, which meant that much more of that actual income was take-home.
And further still, combine all this with the average number of hours worked - the average worker now works 20 more hours per week than in 1970!! (here)
I think we are actually quite worse off in an aggregate median sense than a generation ago, and that is extremely shitty.
Yes, we have a proiliferation of consumer goods, and some of them are great and that is one thing that has improved over the past generation. However, if I have an HDTV, but won't own a home of my own to put it in until I am 45, and will never save enough to retire, I consider that a problem.
Some other points:
I didn't 'blame' any of this phenomenon on immigrants, but I did attribute it in part to solid working class jobs switching over to being done by illegal immigrants. However you may feel about illegal immigration, isn't it wrong that hard labor intensive jobs that used to be solidly working class now pay poverty wages? And doesn't this inevitably ripple up the job ladder?
And I can't agree with you that outsourcing is a 'scapegoat'. Again, jobs, real productive jobs and careers that used to pay a middle class wage to americans now pay someone else much less. And that has to ripple across the economy. And it will only get worse as nothing that can be done on a computer is immune. Don't think that there aren't plenty of people in India, China, and Russia that are itching to do that earthquake modeling.
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