‘Liberalism’s Most Challenging Task’ Is Clearer Writing

…Not that conservatives’ is better.

Timothy Noah, “The 1 Percent Are Only Half the Problem,” New York Times Opinionator.

I’d describe Noah’s article in the Opinionator as a muddle. To begin with, I no longer use the term “income inequality” because it’s confusing. More recently, I’ve preferred “income polarization,” which is more descriptive. There’s always going to be income inequality because some people are more productive than others and some people own more assets than others. This is an analytic fact. What’s also an analytic fact is that there will always be a “1 percent,” unless you live in a society of fewer than 100 people and you feel like aggressively rounding numbers. Sure, comparing the one percent’s income to the rest will illuminate polarization, but that already assumes that incomes will be unequal. Thus, to say that the “1 percent” is any portion of the problem is a non sequitur.

Noah’s other “half of the problem” is the “rise of the educated class,” i.e. the polarization of incomes of college-educated workers from high-school-educated workers.

Median Earnings by Education

(Source: Census Bureau)

Okay, there’s some educational polarization here—and Noah says it began in the late ’70s—but I think persistent underemployment and credential inflation have probably been bigger factors since then. For example, if a worker gets a four-year degree, starts a job that’d normally require only a high school degree, and then gets a pay raise, then it appears the benefits are going to college-educated workers when they’re not. This is why I keep saying that the population distribution of education is important. Education categories aren’t static.

Percent Workers With Earnings by Education

(Source: Census Bureau)

Noah then tries (I think, as I said, it’s not a crisply organized article) to explain why conservatives and liberals don’t like talking about education as the cause of “inequality.”

Liberals resist talking about the skills-based gap because they don’t want to tell the working classes that they’re losing ground because they didn’t study hard enough.

Which liberals are these?

One reason the left plays down the growing skills-based gap is that it accepts at face value the conservative claim that educational failure is its root cause.

Didn’t the Obama administration release a glorious paper dually-titled “The Economic Case for Higher Education/The Economics of Higher Education” last winter?

More than two-thirds into his article, Noah gets to his argument:

But the decline of labor unions is just as important. At one time union membership was highly effective at reducing or eliminating the wage gap between college and high school graduates. That’s much less true today … The decline of labor unions is what connects the skills-based gap to the 1 percent-based gap … According to the left-leaning Economic Policy Institute, the G.D.P. shift from labor to capital explains fully one-third of the 1 percent’s run-up in its share of national income. It couldn’t have happened if private-sector unionism had remained strong.

True, provided you also ignore the increase in the share of college-educated Americans, credential inflation, and the proportion of educated Americans who aren’t in the workforce. Degrees don’t have much value for stay-at-home parents, unless you look at them as modern dowries/bride prices, and that’s very problematic for class discussions.

This isn’t to say nationalized and globalized scabbery isn’t a problem, but in Noah’s more lucid final two paragraphs, he admits that labor rights are political non-starters:

[I]f economic growth depends on rewarding effort, we should all worry that the middle classes aren’t getting pay increases commensurate with the wealth they create for their bosses. Bosses aren’t going to fix this problem. That’s the job of unions, and finding ways to rebuild them is liberalism’s most challenging task. A bipartisan effort to revive the labor movement is hardly likely, but halting inequality’s growth will depend, at the very least, on liberals and conservatives better understanding each other’s definition of where the problem lies.

(Add “middle class” to my list of terms I disfavor. It’s like saying those destitute Americans don’t deserve wage increases either.)

I guess Noah had to save his argument for the end because (a) conservatives would’ve stopped reading it if he’d hastened to his point, and (b) it’s not a very good use of Times real estate to say, “We’re boned.” However, there are a few tactics that might help work around the problem of how to convince the labor-haters to ease poverty.

(1)  Blame the trade deficit: I think Noah’s written in the past that this isn’t as much of a problem as the Dean Baker-types think, but everyone can get behind it except the banks, which aren’t very popular.

(2)  Blame the landowners: The argument against improving states’ labor protections versus federal ones is that they raise labor costs and cause industries to move to the labor-hating South. Land tax shifts break that Gordian knot because labor-hating industries can move but land cannot. Even if landowners sell their land in response, so what? Prices, including taxes on labor, will drop, and living standards will rise for those remaining.

Notice how neither of those suggestions uses the terms “income inequality” or “middle class”? Do you think Noah would’ve been able to confidently open an article with the above two points rather than discussing the half-portion of the one percent and what liberals versus conservatives allegedly think? Liberalism’s most challenging task is adopting a stronger, broader set of policy goals to avoid checkmating itself as Noah does.

3 comments

  1. Many standing outside the Right/Left political spectrum want to embrace concepts that lead to greater benefit. Somehow, in this example, this writer gets muddled.

    I like the description of “income polarization”, since it address the greater issue of wealth concentration, while still accounting for the value of surplus in cases where individuals are genuinely more productive.

  2. Great analysis, although I’m not sure I fully understand your “blame the landowners” point. What do you mean by “…improving states’ labor protections versus federal ones…?” I get it that if states create more protections for labor, then the cost of labor will go up and industries will head down south. But what is the alternative? The feds institute pro-labor policies that will make the cost of labor go up in the entire US? Then what? Industry moves out of the country altogether?

    If that’s not what you’re saying, I don’t get it… Yeah, looking at it again, I don’t think I follow your point at all.

    Otherwise great article, though!

    1. RG,

      I believe that that federal labor law should equalize protections as much as possible to prevent too much state-level beggar-thy-neighbor labor laws that make all workers worse off. State land taxes reduce capital and labor costs and reward efficient land use. They’re a good idea in and of themselves, but they’re especially good when federal labor laws aren’t very strong and Congress is gridlocked.

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