Category Archives: Jack Metzgar

Class War in the Tax Code

I know that taxes are a really boring subject, as is talking about billions and trillions of dollars as if any of us could understand such magnitudes. But a one-sided class war is being fought every day in the U.S. tax code, and getting even a glimpse of the amounts of money involved can change our sense of why taxes matter. If the government would stop redistributing income through the tax code and instead tax investors the way it does workers, homeowners, and consumers, many things that we can’t afford today would be easily affordable.

California, for example, doesn’t have enough money to pay home care workers (who are basically state employees) both minimum wage and overtime – the state is short some $350 million. Those workers average about $17,000 a year, with lots of overtime that is paid at straight wages. In Chicago there’s not enough money to have guidance counselors and social workers in the schools where they are most needed or librarians to staff most of the libraries. The Chicago Teachers Union estimates that it would cost about $300 million to remedy these and other deficiencies, but doing so would have a big impact on educational results. In order to save the Detroit Institute of Arts’ collection from being sold to get Detroit out of bankruptcy, city workers with $19,000 annual pensions had to give up about $900 each while the state of Michigan found $200 million for a one-time contribution to the city’s pension fund.

These amounts seem very large from an individual perspective. Even the smallest, $200 million, is more than 100 times what an average professional worker earns in a lifetime. The cumulative total of $850 million could fund the payrolls of six top teams in the National Football League. But in the world’s largest economy, whose national government now spends about $4 trillion a year, these hundreds of millions of dollars are the equivalent of nickels and dimes.

I have chosen these state and local situations at random, but thousands of state and local governments are similarly “taxed out” politically, if not economically. States and municipalities compete with each other to keep taxes low in order to attract businesses that, they hope, will create more jobs; few of them are in a position to initiate new taxes on investors. The federal government, on the other hand, has lots of room to run in taxing the top income earners and wealth holders.   Local governments tax property wealth, which is widely distributed among the population, but nobody taxes financial wealth, which is greatly concentrated in the top 10% and 1%. Likewise, state and local governments are highly dependent on sales taxes for things like clothes and meals at Appleby’s, which nearly everybody buys, but there is no sales tax when you buy a stock or bond.

This is how class war is waged in the tax code. If financial wealth were taxed like property wealth, and if buying a stock or bond were taxed like buying a shirt or skirt, all underfunded public pensions could be funded; home care workers could make a living wage; we could have the kind of massive infrastructure program we need; veterans wouldn’t have to wait months to be seen by Veterans Administration doctors; and we could cut our debt and deficit at the same time as we cut other taxes. And if income made from investing rather than working were taxed at the same graduated rates as earned income, we could do even more. We could have smaller class sizes and more teachers. We could staff government agencies at levels that would enable them to actually fulfill their functions – including enforcing our labor laws. Add it all up, and millions more workers could have decent jobs.

So why do we tax income you work for at higher rates than income you don’t work for? Because investors are winning a class war that most workers don’t know is being fought. Why does it seem natural to tax real property (houses, buildings and land) but not financial property (cash, stocks and bonds)? Because investors long ago won a class war that home owners don’t realize was ever fought. And why are meals at Burger King taxed but not stocks and bonds? Because investors are winning a class war that consumers don’t know is being waged.

How much additional money would the government have if unearned income were taxed at the same rates as earned income, if financial wealth were taxed at the same rate as property wealth, and if a sales tax was levied when buying a corporate stock the way it is when buying a pair of shoes? I did a little research and found out that it’s quite a lot – at least $800 billion a year. While implementing an equitable system of federal taxation would involve many administrative, legal, and political difficulties, it could solve financial problems at the state and local as well as the federal levels. None of the difficulties is insurmountable, but first we need to simply ask why investors get discounts and free passes in the tax code. Maybe they really are more valuable and important than the rest of us. But let’s discuss that in public rather than simply assuming it in the tax code.

In the meantime it’s clear that if the government taxed investors like it taxes workers, home owners, and consumers, we’d have more than enough money to do all the things I list above. After all, providing what’s needed for home care workers in California, school children in Chicago, and pensioners and art museums in Detroit would only cost $850 million (with an “m”). We could raise nearly 1,000 times that much — at least $800 billion (with a “b”) — if the government would declare a cease fire in the class war and stop redistributing income.

Jack Metzgar
Chicago Working-Class Studies

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For those who want to check my homework, here’s how I arrived at these big numbers.

Unearned income (capital gains and dividends) is currently taxed at 20% regardless of income level. If it were taxed at the same graduated rates as earned income, United for a Fair Economy estimates it would produce $160 billion in additional federal revenue.

Local governments live off wealth taxes, but these are applied only to “real property” (houses, buildings and land) not to financial property (cash, stocks or bonds).   The average property tax rate is 1.38%. According to Dean Baker at the Center for Economic and Policy Research, the total value of outstanding U.S. corporate stocks in 2014 is about $28 trillion. Thus, a 1.38% “property” tax on stocks would produce $386 billion in new revenue. I could not find a number for the total value of bond holdings in the U.S., but a 1.38% tax on bond wealth would surely add enough for a financial property tax to produce at least $500 billion a year.

The Tax Foundation does not compute an average for “combined state & average local sales tax rates,” but among the 47 states that have a sales tax (3 states do not have any), almost all are above 6%. So using 6% as a sort-of-average sales tax and applying it to the $60 trillion in stock trades in 2013, it would produce an astounding $3.6 trillion – nearly enough to fund the entire U.S. Government. This would be wildly unrealistic, as it would wreck the stock market and kill investment, but it gives you a notion of how lucrative even a very small sales tax on stock transactions could be. HR 1000, introduced by Rep. John Conyers, would impose a sales tax of 0.25% on stock trades (that’s a tax of 25 cents on a purchase of $100 in stocks), and that would produce $150 billion in new revenue. This much more modest amount is what I used to get a total of “at least $800 billion.”

 

Our Overeducated Workforce: Who Benefits?

There are two “college jobs” (jobs requiring a bachelor’s degree) for every three “college graduates” (people 25 or older with a bachelor’s degree). What’s more, according to projections by the Bureau of Labor Statistics, this will not change much in the future as low-wage jobs grow somewhat faster than “college jobs,” while “college jobs” grow more slowly than the number of “college graduates.”

This blog has been an outlier in reporting this set of facts – see here, here and here. So while our readers should not be surprised by the recent report of the Federal Reserve of New York that “one in three college-educated workers typically holds a job that does not require a degree,” the mainstream media should be shocked.

Given these facts from official sources, it is a mystery how our leaders can go on and on about our growing “knowledge economy” and the necessity for everybody to go to college so they can get a good job.  One out of three college graduates now is not going to get one of those good college jobs; if everybody gets a bachelor’s degree, then about four out of five will not get a “college job.” It’s just arithmetic. How can President Obama very mistakenly say “the best anti-poverty program around is a first-class education” as two-thirds of jobs now and in 2022 will require only a high school diploma or less and most of these jobs pay low or very low wages? How is it that major newspapers, like the Chicago Tribune, still have headlines warning of a “shortage of educated employees”?

I don’t usually assume that there’s a conspiracy involved when our elite opinion-shapers purvey a widespread conception that is so out of whack with the facts.  I expect a certain level of class blindness among middle-class professionals (especially at the upper levels) on a wide range of subjects, and my expectations are only rarely disappointed. I think many of my lefty friends are too quick to attribute such mismatches to a kind of all-seeing executive committee of the ruling class that is purposely and systematically purveying propaganda that serves their interests.

But this past year I was interviewed by a documentary filmmaker, Jennifer Schuberth, who convinced me that I was looking in the wrong place for a conspiracy. Since the practical effect of having too many college graduates for the number of “college jobs” is to put downward pressure on the wages of those jobs, I figured any intentional design would require some kind of unwieldy conspiracy among employers. Schuberth, who is a Ph.D. anthropologist, has done some tracking of money flows, however, and she makes a pretty good case that the propaganda that blinds us may be orchestrated by the largest purveyor of college-student loans, Sallie Mae. You can watch her 12-minute doc Poorer by Degrees here. (I am one of the talking heads, but Schuberth’s editing and graphics have made me more lucid than usual.)

Sallie Mae, officially the SLM Corp., donated nearly $1 billion to found the non-profit Lumina Foundation, whose mission is “To increase the proportion of Americans with high-quality college degrees, certificates and other credentials to 60% by 2025.” Lumina gives money to various media outlets, think tanks, higher education associations, and universities to advance this mission. Lumina President and CEO Jamie Merisotis and Chief of Staff Holiday McKiernan are popular keynoters at gatherings of higher education administrators. Merisotis, for example, told the Oregon Higher Education Symposium that “[e]conomists and labor experts are quite clear” that the existing higher education system is not producing enough college graduates. Likewise, McKiernan emphasized to the Middle States Commission on Higher Education that “[e]xperts agree” that “by 2020 65% of jobs in America will require some form of postsecondary education.”

In these speeches when Lumina executives cite “experts” who “agree” and are “quite clear,” they actually refer to only one expert, Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, which is a major recipient of Lumina funds. Carnevale is also the source for the headline cited above warning of a “shortage of educated employees,” and he was the go-to guy for The Wall Street Journal to attack the NY Federal Reserve study as “wildly inaccurate.”

Carnevale authored a 2013 study, Recovery: Job Growth and Education Requirements through 2020, that purports to refute the Bureau of Labor Statistics’ occupational projections. BLS is not just an expert on this subject, it’s the premier expert. That does not mean BLS is right and Carnevale is wrong, but it does make it hard to see how Lumina executives can say “experts agree.”

Here’s the disagreement: BLS says the total number of jobs requiring “postsecondary education” of any sort is 33% now and will grow to 35% by 2022 (jobs requiring bachelor’s degrees will grow from 22% to 23%; those requiring associates degrees and other postsecondary credentials from 11% to 12%). Carnevale says the total is now 59% and will grow to be 65% by 2020, but he has an unusual definition of “college jobs.”

Carnevale dispenses with the BLS’s tedious job descriptions based on surveys of more than a million employers. Instead, he uses well-respected public opinion surveys and finds that many college graduates with jobs that BLS says do not require bachelor’s degrees tell surveyors that they are paid more than non-college-graduates doing the same or similar jobs. Carnevale thinks that when this happens, that person’s job should count as a “college job”: “Employers are still willing to pay more for the college degree – a symbol of a worker’s attainment of the knowledge, skills, and abilities that improve productivity.” Thus, if a barista at Starbucks with a college degree makes more than a barista at Starbucks who does not have a college degree, then that should count as a “college job” because the first barista has benefitted economically from his/her college education.

Well, that is one way to look at it, and a very creative one! But I’m glad the BLS doesn’t count that way. The NY Fed didn’t use Carnevale’s approach either, and as a result, found that though college graduates as a whole average substantially higher incomes than those without college, in 2013 one of four college graduates earned $27,000 or less.

You can probably guess how Sallie Mae, the giant of the college-loan industry, benefits from Carnevale’s reading of the need for more and more “postsecondary education” and from the Lumina Foundation’s mission to double the proportion of higher-educated workers. But watch Poorer by Degrees anyway. It paints a disturbing portrait of how some folks make money by exaggerating the American Dream.

Jack Metzgar
Chicago Working-Class Studies

The Value of Admitting that Raising the Minimum Wage Could Cost Jobs

A few weeks ago I watched Bill Moyers interview conservative economist Arthur Brooks as he mouthed the Republican talking point that the problem with the minimum wage is that “it hurts the people it’s supposed to help” because it eliminates jobs. Moyers politely countered that “some studies” show that minimum wages do not kill jobs. A few days later the PBS News Hour rehearsed an almost identical dialogue between an advocate of living wages and an opponent – a battle of studies about potential job loss. You have undoubtedly heard similar talking-point contests dozens, if not hundreds, of times.

The problem with this debate is that it goes nowhere and educates no one about the relationship between declining real wages for 3/4ths of those employed and the very slow and low economic growth that leaves us with an official unemployment rate above 6%.   By itself an increase in the federal minimum wage to $10.10 an hour by 2016 and then adjusted for inflation each year thereafter, as proposed by President Obama, is insufficient to address these problems. But as the leading edge of a broader program to increase worker spending power in order to get the economy growing more fully, it could be the kind of signature issue that rallies the Democratic base of young people, women, and people of color while also attracting a significantly larger portion of the much-prized white working class (defined as whites without bachelor’s degrees).

For the minimum wage to be a leading edge of such an economic program, however, progressive Democrats have to admit that a large enough and quick enough increase in the federal minimum wage does, in fact, threaten the loss of some low-wage jobs. They have to abandon their “studies show” approach to defending a minimum wage increase, and instead develop a larger narrative about how our gross and still increasing inequality of income and wealth is the principal reason our economy is growing so slowly and, therefore, producing so few jobs.

What’s more, it does not take much political courage to exploit this opportunity because increasing the minimum wage is so damned popular. This is clear from the public reaction to the Congressional Budget Office (CBO) report that concluded, as USA Today headlined, that a “Minimum wage hike could cost 500,000 jobs.” Weeks after this news was widely proclaimed, and typically seen as declaring the Republicans the winner in the “job-killer” talking-points debate, a Pew Center survey found that nearly three-quarters of the public supported a $10.10 minimum wage as proposed by the President.

The strongest argument for a substantial increase in the minimum wage is the one President Obama articulated recently, the simple moral imperative that: “Nobody who works full time should ever have to raise a family in poverty.” The public, including even a slight majority of Republicans, apparently accepts this imperative even if it might cost a substantial number of jobs.

What the CBO report actually said was that somewhere between zero and 1 million jobs might be lost, settling on the 500,000 figure as an educated guess – and thus granting that Democrats could be right in insisting that no jobs might actually be lost. At the same time, the CBO estimated that at least 16.5 million workers would get higher wages directly (because they make less than $10.10 now) while additional millions making a bit more than $10.10 now might also get raises from a “spillover effect” –including, in the CBO’s words, “a few higher-wage workers [who] would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.” Thus, the CBO thinks there is a trade-off: of the 17 million workers directly affected, 97% would definitely benefit while 3% might lose their jobs.

Equally important, the CBO compared President Obama’s earlier $9-an-hour proposal with the current $10.10 one, and found that many fewer people would benefit from it (7.6 million) but fewer jobs would be put at risk (only 100,000). Thus, by reducing the amount of increase, the trade-off is also reduced: 98.7% would definitely benefit and only 1.3% might lose their jobs, but less than half the number of workers would be affected.

This is the single most important thing about the federal minimum wage: the higher the wage floor, the more people who benefit but the more jobs that are put at risk. For most public policies (or private ones for that matter) something that benefits 97% but harms 3% would be considered an excellent risk-reward ratio. But the loss of a job (even a low-wage one) in our society is such a punishing harm that it makes most people hesitate to “throw anybody under the bus.” Though majority public opinion supports the $10.10 minimum wage anyway, the threat of job loss undoubtedly reduces their ardor and thus the saliency of the issue in elections. The Pew survey cited above, for example, found a large gap between support for the increase and the degree to which that support would affect people’s votes.

If, as Democrats currently do, you want to insist that increases in the minimum wage won’t cost any jobs, you have to keep the increase relatively low. On the other hand, if you grant that jobs may be lost and you are not indifferent to that, then the logical response would be to search for a way to replace the 500,000 jobs that might be put at risk.

Such a way is easily found in another highly popular Democrat proposal: government investment in infrastructure — roads, bridges, water and sewer systems, public transportation, weatherization and other energy efficiency, and green technology. All these are included in President Obama’s current budget proposal before Congress, though at very small levels. The President proposes an increase of just $75 billion a year for the next four years, while the House Congressional Progressive Caucus (all Democrats) wants $130 billion a year over ten years, and the American Society of Civil Engineers estimates that we need $225 billion a year over the next 16 years. Using Council of Economic Advisers’ estimates, Obama’s minimalist plan would create 975,000 jobs, while a fully developed program that would meet our infrastructure needs would provide 2.8 million mostly decently paid construction jobs.

I may be comparing apples and oranges among these various plans, but you get my point. The President’s minimalist plan would create more than enough well-paying jobs to replace any low-wage jobs that might be lost due to increasing the minimum wage to $10.10 an hour. If we actually invested amounts like the American Society of Civil Engineers thinks we need, we should be able to offset any jobs lost to an even higher minimum wage – say $15 an hour. Over time, low-wage jobs would be replaced with higher wage ones, greatly increasing worker spending power, reducing inequality, increasing economic growth, and creating even more jobs.

Such an ambitious infrastructure program would have to be paid for, and the President has proposed to pay for his minimal program through a variety of small tax increases based on eliminating loopholes for corporations and individuals. But here our great inequality of wealth and income becomes a distinct advantage, as one of our most plentiful national resources is rich people with much more money than they need. As I have pointed out before, there are any number of ways to increase taxes on the top 1% or 2% without significantly reducing their living standards and life prospects. $220 billion is chump change for a group that each year earns $2 trillion more than they used to when labor unions forced productivity sharing on profitable companies.

You may say this is all pie in the sky, but I offer it as a winning political program for Democrats – one that simply ramps up and connects several existing Dem proposals. A minimum wage that could really make a difference in people’s lives would disproportionately benefit the Democratic base of young people, women, and people of color – giving them a reason to vote. An infrastructure program at a scale we actually need in the 21st century would disproportionately benefit white working-class men, a key part of the Republican base, while also providing opportunities for renewed affirmative action hiring requirements in the building trades. A large tax increase on our oligarchs would satisfy many people’s sense of justice while providing the money to get the economy growing again at a pace that can provide jobs and wages that make everybody’s lives better.

This is a program that could give working-class people of all colors and genders a reason to vote and a reason to vote for Democrats. Republicans are currently blocking small increases in the minimum wage, minimalist investments in infrastructure, and tax increases on the rich of any kind. Why not propose something big enough to make a difference – replacing low-wage jobs with well-paying ones – and then win elections that might allow you to actually do it?

Jack Metzgar
Chicago Working-Class Studies

Summer Reading from Working-Class Studies

A cultural anthropologist from the “Southeast Side” of Chicago whose family is still living the half-life of deindustrialization three decades after the mills shut down.  A community organizer, journalist, teacher, actor, and musician who also writes poetry in Albuquerque, New Mexico.  A day laborer in Oakland and Baltimore who while waiting for work was taking field notes as a sociologist.  And a daughter of the Arky part of Arkansas reporting on poverty in the Ozarks.

These are the four winners of the Working-Class Studies Association’s awards for the best work of 2013.  Together they ably represent our diverse field both in subject matter and method, as they focus on different parts of working-class life while insisting on combining direct observation and experience with book learning and the wider contexts it can bring to immediate experience.

Christine Walley’s Exit Zero: Family and Class in Postindustrial Chicago won the Association’s C.L.R. James Award for Published Book for Academic or General Audiences.   Now an associate professor of anthropology at the Massachusetts Institute of Technology, Walley was 14 years old when the steel mill where her father worked was the first of a series of mills and related factories that shut down in Southeast Chicago.    Employing ethnographic and other anthropological methods, she recounts her family’s and neighborhood’s history across a century of industrialization and deindustrialization, revealing stories that counter and undermine what she calls “the hegemonic narrative” of the immigrant and working-class experience in America.

Judges praised Exit Zero for “its combination of rigorous critical enquiry and vivid personal reflection.”  One judge said: “We have many books on deindustrialization, but this one stands out for the effective way it uses family memoir to demonstrate what was lost.”  Another judge, more elaborately, explained: “Methodologically, this is a great example of someone working within a particular academic discipline . . . but recognizing that . . . disciplinary expectations for research are too limiting to honestly describe a class-inflected situation” – and went on to praise Walley for the way she dealt with “the tension between the expectations for a certain kind of articulation in academia, and the directness, or even bluntness, of working-class vernacular.”

Walley and her husband, Chris Boebel, have nearly completed a documentary film, also titled Exit Zero, which covers some of the same stories in a different medium.  It will be released sometime in the coming year.  For other activities around the book and the movie, see The Exit Zero Project web site.

Hakim Bellamy is the first-ever poet-laureate of Albuquerque, New Mexico, and his first book of poems, Swear, won the WCSA Tillie Olsen Award for Creative Writing.  Bellamy is well-known in Albuquerque as a community organizer and journalist and is now a teacher, musician, and actor as well as a poet.  Swear was published by Working-Class Studies pioneer John Crawford’s West End Press.

Many of the poems in Swear are fiercely political, as Bellamy comments on current events, taking special inspiration from Occupy Wall Street and the Occupy movement.   But his politics are wide-ranging, including a vivid protest against public school budget cuts that eliminate the arts:

you excommunicate us from your classrooms

because we are not your trinity

of science, math and history

we are the intersection

crucified on your standardized “X”

. . . . .

you make lamb out of your flock

sentence them to seven deadly periods

and a hot lunch

 In the section “Letter to Hip Hop,” which contains a third of the poems, Bellamy celebrates the presence of poetry in public space:

so the poet left the sanctuary

                  back to the curbside pulpit

                  where pain

                  and worship

                  both have to be louder than the traffic

 

WCSA judges praised “the strong and uncompromising voice of this poet” and “poems that directly confront the social conditions and spit out rebellion.”  One judge simply said: “Bellamy’s depiction of the class divide is a punch in the gut.”

The WCSA John Russo & Sherry Linkon Award for Published Article or Essay for Academic or General Audiences went to Gretchen Purser for her article in Labour, Capital and Society, an interdisciplinary journal, published in English and French, that “provide[s] an international mix of perspectives on labour struggles.”   The article, “The Labour of Liminality,” details the practices of day-labor corporations in “a well-entrenched, multibillion-dollar industry” that makes its money by making work ever more precarious for “a predominantly homeless, and formerly incarcerated, African-American workforce in the inner cities of Oakland and Baltimore.”  As part of her research, Purser worked as a day laborer in both cities. She draws vivid portraits of and testimony from day laborers as they wait, sometimes fruitlessly, to be transported to a few hours of poorly paid work.   Purser is now an assistant professor of sociology at Syracuse University.

Monica Potts’s cover article in The American Prospect, “What’s Killing Poor White Women?” won the WCSA Studs Terkel Award for Media and Journalism.  The article builds on a study that found that while most Americans are living longer, the life expectancy of white women who have not completed high school has declined by five years, from 78 years to 73.  The researchers do not know why this has occurred over the last two decades, so Potts went to northern Arkansas, where she grew up, to talk with the numerous white women without high school diplomas there.   One of the judges said of Potts’s article, “The story of Crystal Wilson is gorgeously told and I like the way the writer weaves together the narrative with study findings.”  Others praised it as “very moving,” “powerful, sensitive, and forthright” and for showing “the ways in which poverty can impact all aspects of life.”  You can see more of Potts’s work at The American Prospect.

The high quality and variety of the numerous entries for this year’s awards testify to the growing importance of Working-Class Studies as a field.  As our award-winners do, most of our entries challenge “hegemonic narratives” in a society that often denies the existence of social class while routinely overlooking, stereotyping, and/or reductively simplifying working-class life and experience.  We have a long way to go to right the balance, but these books and articles provide road signs on the various paths forward.

Jack Metzgar

WCSA Past President

 

 

 

 

Highway or River?

Is life more like driving on a highway or rafting down a river?  Do we choose a destination and then try to find a way to get there?  Or do we simply react to the varieties of experience presented to us, from dangerous rapids to calm stretches with time to look around, without knowing where the river is taking us?

I have presented this as a forced-answer either/or question to students to see if those from middle-class origins are more likely to choose the highway analogy and those from the working class, the river.  By and large they do, though nowhere near uniformly and not without a lot of ambiguity about how to define their class origins.

The discussions this initiates are much richer than I can convey here, but in general the highway analogy emphasizes that as individuals we choose our own destinations, subject to change over the life course, and it’s up to us to find our way, to set our goals and achieve them.  Conversely, the river analogy de-emphasizes goal-setting and emphasizes the need for alertness and responsiveness to what is immediately before us.  At least the way I present it, the highway analogy overvalues official knowledge while the river analogy overvalues direct experience.  The highway requires lengthy periods of preparation and planning – before getting on a highway or at chosen stops along the way.  But if life is a river, you’re already in it (and can’t get out), and you need to learn as you go – both from others in your particular raft and from experience.  Others (parents, teachers, and mentors) help you prepare for the highway, but then students envision driving alone.  Rafting down a river, on the other hand, conjures a group where individuals need an easy responsiveness not only to the river but to others in the raft.

While I’m pretty sure life is much more like a river, to me both analogies make sense and are fruitful ways of trying to picture basic assumptions people make about how to live as they live their lives – and these assumptions tend to correlate with class background and/or current class position.  Those from the college-educated and relatively affluent middle class tend to choose the highway analogy because they are inclined to believe that they are – or should be – masters of their own destiny.  Those from working-class and poverty-class backgrounds would like to be masters of their own destiny too, but they’re skeptical that such mastery is realistically available to most people, and meanwhile they had better pay attention to what is immediately before them, including relationships with others they count on and who are counting on them.

Whatever you think of these life analogies, they are a way to point to different assumptions, expectations, and predispositions that seed different ways of acting and being in the world – different cultures that are likely to misunderstand each other if they are unaware that others have different expectations and assumptions.   Highway people may tend to see river folk as passive, strictly reactive, and (famously) incapable of delaying gratification – and given the relatively insignificant role they give to the force of circumstance, they also tend to be highly judgmental.   River people, in turn, while often willing to defer to highway-drivers, are inclined to exaggerate how distant, humorless, unresponsive, and “cold” they are.   They also regularly worry that highway-drivers are “out of touch,” “lack common sense,” and are dangerously over-confident or “arrogant.”

Different cultures are bound to misunderstand each other, but the misunderstandings can be fewer and of less consequence when people are aware of the differences.  When Englishmen visit Italy, in a much-used example, they expect rather dramatic differences in ways of doing and being, and thus are more likely to learn from and enjoy the exposure – or at least to suspend judgment.   Awareness of cultural difference allows one to recognize the strengths and advantages of other cultures and the weaknesses and disadvantages of your own.

These are the basic premises of Betsy Leondar-Wright’s new book Missing Class: Strengthening Social Movement Groups by Seeing Class Cultures.  Leondar-Wright surveyed and interviewed participants in 25 different social-justice groups and directly observed the groups’ meetings and actions, carefully correlating “class trajectories” with the roles people played in their groups and with their different approaches to solving various common problems.  (“Class trajectories” combine both class background and current class position with a person’s orientation toward the future – e.g., intentional and unintentional upward and downward mobility.)  She purposely chose groups with diverse memberships and found that small-group interactions revealed a certain deftness with recognizing and dealing with racial, gender, and movement-tradition differences, but were amazingly unaware of class cultural differences.  Her argument is that “missing class” both creates unnecessary problems and misses vital opportunities for drawing on the full array of class-cultural strengths within these groups.

A rare combination of empirical rigor and insightful storytelling, Missing Class is chock full of situations and problems social justice activists will recognize, often with new insight into the crazy multicultural mix of race, gender, class, and movement tradition in the variety of groups Leondar-Wright examines.   As I read, it occurred to me on multiple occasions that social justice groups, including bigger ones like some unions, provide relatively rare opportunities where different classes experience one another within contexts where awareness of  racial and gender cultural differences is well above the norm for most American social settings.  That is, there is a base of multicultural experience that should make it easier for us to see and benefit from our class culture differences.  This may in fact be a kind of competitive advantage on the Left, especially as the younger generation of organizers and activists are so much less sectarian and self-righteous than my generation was.

Leondar-Wright’s class categories are more nuanced (and, therefore, closer to the messiness of social realities) than my simple middle-class/working-class binary.   But besides being a handbook for “strengthening social movement groups,” Missing Class is an effective assault on the cultural hegemony of the professional middle class in America – and specifically on that wing of American sociology rooted in the 1980s classic Habits of the Heart, which so firmly asserted that there is no “genuinely working-class culture” and that “[e]veryone in the United States thinks largely in middle-class categories.”

I have no problem with the highway-drivers being our preferred national culture, and surely the working class could benefit from some broader goal-setting and a more expansive sense of possibility and confidence in the future.   But unchecked, unnourished by other more realistic and less confident cultures, I fear the highway-drivers are increasingly out of touch and dangerously arrogant.  From “school reform” to foreign policy, they have a tendency to make things worse by being blind to, or at least grossly underestimating, the force of circumstance.   They need to learn from rafters who have more daily (actually much too much) experience of the force of circumstance.  Together we might simultaneously better negotiate and reduce that force.

On the evidence of Missing Class, such grand cross-class coalitions may be emerging within those tributaries, both here and abroad, that are becoming increasingly strong and insistent that justice must be social.

Jack Metzgar

Chicago Working-Class Studies

Graduating College is Highly Overrated

That’s the headline I propose for the Bureau of Labor Statistics (BLS) to attract public attention to its most recent projection of job growth in the next decade.   Though a tendentious conclusion from the BLS study, such a headline could draw the kind of bipartisan outrage that might lead to a more honest and accurate discussion of the relation between education, jobs, and income in these United States.

The BLS does its study of U.S. occupations every two years, showing the number of jobs in each occupation, its educational requirements, and how much it pays.   Though the specifics change, every two years the study shows that a large majority of jobs now and in the future require no education beyond high school.  And every two years the carefully compiled BLS data is ignored, leaving the field clear for everybody from the editorial pages of The Wall Street Journal to President Obama to proclaim that “education is the answer” to economic inequality, poverty, and low wages.

“Graduating college is highly overrated” is about as half-true, and therefore false, as “education is the answer.”  But each claim has some evidence to support it.

According to the BLS, in 2012 only 22% of all jobs required a bachelor’s degree or more, and of the more than 50 million job openings the BLS projects by 2022, only 22% will require a bachelor’s or more.  (In fact, if all you have is a bachelor’s degree, there are only 17% of jobs now and 17% of job openings projected by 2022 that require that degree and no more.)  Problem is that about 32% of the population over the age of 25 has a bachelor’s, and among young people ages 25 to 34, it is a bit higher at 34%.  In other words, there are only two jobs for every three persons who have a bachelor’s degree, and the number of people getting bachelor’s degrees is growing faster than the number of jobs that require that degree – or anything close to it.

Indeed, 26% of jobs in 2012 did not even require a high school diploma, and another 40% required only a high school diploma.  And the BLS projects that it will get worse by 2022, when nearly a third of all job openings will require “less than high school.”

There is a more ambiguous category of jobs that require some “postsecondary education,” whether an associate’s degree or some kind of specialized training certificate or simply “some college.”  But they are required for only about 11% of jobs now, and are projected to provide about 12% of job openings going forward.

The table below summarizes how overeducated our population is for the jobs we actually have.

Level of education

% of people over 25 with this level of education

% of jobs that require this level

Less than high school

12

26

High school diploma

30

40

Some college, A.A., or postsecondary

26

11

Bachelor’s or higher

32

22

We have an oversupply of jobs that require high school or less (66%) compared to the 42% of people whose education fits those jobs.  And conversely, we have an oversupply of people with some postsecondary education (58%) for the 33% of jobs that require something like that level of education.

Just looking at what jobs are now and will be available in the U.S. economy, graduating college seems highly overrated – and it might even be that “going to college is for suckers.”  If all you need for most jobs is a high school education, why bother with college?  That’s simple: wages.

A recent Pew Research Center study, The Rising Cost of NOT Going to College, looks at how income correlates with earnings.  As previous studies have found, high school graduates make $7,000 more a year than those who do not graduate.   Those with “some college” make an additional $2,000, and those who get bachelor’s degrees make $13,000 more on top of that.  The gradient could not be clearer: those with bachelor’s degrees have average incomes twice that of those without high school diplomas ($45,000 vs. $23,000).  What’s more, unemployment rates, poverty rates, and other things follow a similar gradient: the more education, the lower the unemployment rate, the lower the poverty rate, and the more likely you are to have full-time employment and employer-paid benefits.  Conversely, though there are and will be plenty of jobs for people who do not graduate from high school and for those whose education ends with a high school diploma, these jobs generally pay miserable wages – almost uniformly less than $30,000 a year, and most much less.

So, “education is the answer” has some evidence to support it, too.   But both statements are half-truths – not much education is required for most American jobs (now and in the future) and more education leads to higher pay and steadier employment.   It is only when you put the two half-truths together that you can see the whole picture.

If you are an individual 18-year-old, your only chance for a decent income is to go to college or to get some other form of postsecondary education.  Statistically, it will give you a 2 to 1 shot at a decent standard of living vs. a thousand to one for high school graduates and a million to one for those who never graduate from high school.   But if all 18-year-olds – or even most of them – play these odds by going to college, it will do nothing to remedy economic inequality, low wages, and poverty.   In fact, it would probably make all these things worse.

The increasing imbalance of supply and demand — more college graduates than jobs that require them — puts downward pressure on the wages of jobs that require higher education and ensures that more college graduates will be forced to take jobs that do not require college.  Pew found that more than one-third of the recent college graduates it surveyed were currently working in jobs that do not require any college.  Likewise, as more college graduates take jobs that require only high school, more high school graduates are forced to take jobs that do not require a high school diploma, and those who did not graduate from high school have great difficulty finding and keeping any job.   It’s a perfect formula for cheapening all labor.  More and more education is required to attain a decent standard of living, but as more and more people gain higher levels of education, they further flood those higher-paying job markets, leading to lower average wages and living standards for everybody.

The Pew study emphasizes the growing gap between the incomes of college graduates and non-graduates, but it also shows that the real wages of recent college graduates have basically stagnated since 1986.  The growing premium paid to people with bachelor’s degrees is almost entirely the result of 13% and 18% declines in real wages for high school graduates and those with “some college.”

Earnings

More formal education may be an answer for individuals – and I do all I can to convince my grandsons of that.   But it is not and cannot be any part of the solution to economic inequality, poverty, and low wages.   The remedy for all three is the same: higher wages, starting at the low end and reaching up to frontline supervisors.  To get higher wages, workers with and without college degrees are going to need the kind of organized, disciplined collective action that we are beginning to see the first glimmers of among fast-food, Walmart, warehouse, and many other workers.

Those of us in higher education can help by developing a curriculum that will be relevant to those one out of three of our graduates who will not be getting jobs that require college educations.   They need courses in the history of American social movements and courses that teach organizing tactics and strategies for workplace, community, and political organizing, complete with “service learning” internships.   Those are the skills that are needed to raise wages and reduce poverty for the vast majority of American workers.  If we taught those skills, then graduating college might be a bit less overrated than it is today.

Jack Metzgar

Jobs and Safety Nets

Teaching macroeconomics with a group of union stewards and local leaders last month, I had just finished explaining the enormous economic stimulus the combination of “food stamps” and unemployment compensation is providing to our struggling economy.  When you include the “macroeconomic multiplier effects” of these “automatic stabilizers,” it was about $260 billion in 2012, and that was enough to create or save some 3 million jobs – “possibly including yours.”

Having taught this subject many times before, I was ready for somebody to complain about having seen a “food stamp” recipient use their SNAP card to buy caviar or lobster at the Jewel.  When nobody did, I smirkily recounted my past experience with students anyway, because that experience has caused me to wonder if this widely reported occurrence might be an urban legend.  Over the years most students, when questioned, hadn’t seen such an incident themselves but had been told about it by a relative or friend.  Once I asked, “Do they even sell caviar at the Jewel?” – and nobody knew.

At break David, a youngish Teamster truck driver, told me about a SNAP recipient he had seen buying steak, which troubled him because “we have to stretch every dollar” buying groceries.  He asked: “So you’re saying this shouldn’t bother me because it’s stimulating the economy and creating jobs?”

With what seemed like half the class gathered to hear my answer, I pulled out my standard response: “Yeah, basically that is what I’m saying.  But it depends on the magnitude.  If it was widespread, it might be a problem, but there is no evidence that it is.  Besides how would the government enforce something like that?  It could cost $1,000 to catch someone buying a $20 steak!”

My answer, with its rough-and-ready cost-benefit analysis, satisfied a large group of students, who walked away to go on break, but not David: “But it’s still wrong.  It costs a lot to investigate murder too.”  At which point an older Teamster driver from the same local intervened: “What do you give a shit if somebody has a little steak?  It’s not murder!  More like speeding on the toll way.”  Being the professor, I went all Socratic on David: “What kind of steak was it anyway – London Broil or filet mignon?” (inadvertently implying that London Broil was like speeding while buying filet mignon could be like murder!).  This shut David up, as it was clear from his facial expression that he didn’t know the difference between high-priced and low-priced steak, and it occurred to me that he and his family might never themselves have enjoyed a steak.  The older Teamster put his arm around David and jibed as they started out for break, “Don’t be an asshole.  That steak was probably delivered in a truck.”

On reflection I regret opening this door about what SNAP recipients should be allowed to purchase (they are and always have been allowed to buy steak and lobster) and what they actually do purchase (which nobody knows, but I’m guessing is almost never steak and lobster).  I’m trying to teach about how deficit-spending and the high-powered multiplier effects of social-safety-net measures are crucial for reducing unemployment in a depressed economy.   And I end up in a discussion about whether some poor soul buying a slice of London Broil is “taking advantage” of us hard-working taxpayers.

As a middle-class professional who often eats steak (including filet), I don’t get how anybody might see a  SNAP recipient being a bit extravagant (or even a lot extravagant) as a moral challenge to a policy which creates or saves 3 million jobs – that is, 3 million “livelihoods,” such as they are.   We could argue about the size of the multipliers – or about the potential downsides of deficit-spending.  But the fact is that the $135 average monthly SNAP allotment, especially when combined with an average $300 weekly unemployment compensation check, is nearly as valuable to the rest of us as it is to those who receive them.  These meager individual amounts spread across millions of recipients inject consumer spending power into an economy that greatly needs it because we live in a society where most income flows to the top 10% or 11%.  Without these welfare-state “transfer payments,” unemployment would be much worse and, as a result, real wages and median household incomes would be declining even more than they have been.  And as Benjamin Friedman’s classic The Moral Consequences of Economic Growth exhaustively documents, these minor individual ameliorations correlate with more peace, less war and less crime, as well as with more prosperity for everybody.

I have learned, however, not to be indifferent to the moral concern some people have about cheaters and slackers “taking advantage.”  Even a handful of people gaming the system challenges the hyper-vigilant work ethic of many settled-living working-class people, especially white men, but not only them.  Like David, who is Latino, they tend to be a certain social type: They live frustratingly on the edge of a cliff doing work they often hate and struggling every day to keep themselves together, incessantly delaying gratification, “stretching every dollar,” never “letting themselves go” lest they fall off that cliff, taking their families with them.

There are a lot of people on that cliff, and a large group of them seem to think that a stern prejudice against “the poor” helps sustain the integrity of their own characters.  Along with a superstition that “bad things do not happen to good people,” they hope their good characters will protect them from falling into poverty.   A recent Hamilton Project study documents that at least one-third of working-age families with children (with incomes of up to $60,000) are “one major setback” away from “economic chaos.”   Neither poor nor comfortably middle class, this group is dubbed by the study as “America’s struggling lower-middle class,” what many of us would call “working class.”  It is also roughly the same income group ($30,000 to $75,000, in this case) that is most likely to blame the poor for being poor.

It is something like this complex social psychology that Republicans play into when they seek to justify cutting “food stamps” and extended unemployment compensation.   Their latest efforts are especially hypocritical.  A recent Fox News video of a surfer lad exuberantly buying lobster with his SNAP card evoked the cheaters-and-slackers meme.   But the actual cuts Republicans have achieved and additional ones they are now seeking just cut benefits across the board and lop people from the program without any attempt to distinguish the cheaters from the frugally hungry.  Surfer lad will still be able to buy lobster while bad things will happen to good people.

Worse to my mind, however, is the recent argument Republicans make for not extending unemployment compensation for the long-term unemployed.  On the one hand, they insist that the $25 billion it would cost to fund for all of 2014 “be paid for” with cuts from somewhere else, thereby undermining the stimulative job-creating impact it would have.  On the other, they insist on the need to address “the real problem: to find these people jobs.”   Though some Tea Party crazies may not be aware of it, the GOP leadership group surely knows that, according to both the Congressional Budget Office and one of their own economic advisers (Moody Analytics), unemployment compensation has a multiplier effect that creates five times more jobs than corporate tax cuts do.  The only federal government job-creation proposal from either party that has a larger macroeconomic multiplier effect, and thus creates more jobs, is the Supplemental Nutrition Assistance Program (SNAP).

I have about as much contempt for welfare cheaters as anybody on a cliff, but even surfer lad is a moral paragon compared to these guys.

Jack Metzgar

Chicago Working-Class Studies