Steve Randy Waldman[new draft post] Why does wage compression underwhelm? https://drafts.interfluidity.com/2024/03/25/why-does-wage-compression-underwhelm/index.html
Kent Willard@interfluidity I think a lot of growth in the lower wage cohort is from those with higher job mobility. For example, those with lower wages who are older or in a small city or rural area won't change employers or industries. Their employers know it, so their raises are small.
Alon@kentwillard @interfluidity That's every wage increase, though. Growth doesn't mean everyone gets the same 2% real wage increase; it means more productive workers get more. The problem is when populists have latched onto the least productive workers (e.g. ones who won't move to opportunity) as the representatives of the real working class.
@Alon @kentwillard If we are concerned abt welfare, we are concerned abt the welfare of all the humans, not just those willing or able to move to opportunity under current circumstance, even if that wld increase their productivity. If we are concerned abt democratic politics, we are concerned about the humans in proportion to their numbers, and if the fraction willing or able to move to opportunity is modest, don't blame "populism" for the bankruptcy of a politics that slights the place-bound.
@Alon @kentwillard None of this prejudices the solution space. One way to address the disconnect is to make it easier for people to live the dynamism imagined of homo economicus. Another way is to reshape productivity, so that, for example, geographical dynamism is less necessary because remote work. Lots of possibilities!
@Alon @kentwillard But if most of the working class still live within 15 miles of their parents, any "populism" — any functional democracy — will put a great deal of weight on those people as "representatives of the real working class".
@interfluidity @kentwillard *All* reduction in inequality involved moving to opportunity, it was just once called urbanization and today it's called moving to a different city.
The idea that "most of the working class still live within 15 miles of their parents" is just wrong. It comes from a single survey of American women over the age of 50 asking them where their children lived; it's been publicized way past its statistical power precisely because it moralizes against migration.
@Alon @kentwillard Urbanization creates growth, not equality. On the contrary. cf China. We can quibble about surveys, but it remains true that there is a very, very large cohort of people who have and likely will always, absent very sharp changes in our circumstances, remain near family and childhood community, close to the place they were born. Trying to undo this is quite a radical project, utopian or dystopian. Ignoring this cohort is morally indefensible and politically catastrophic.
@interfluidity @kentwillard No, urbanization creates both growth and equality: China has high inequality with fast urbanization, India has even higher inequality with slow urbanization and repeated failed attempts at growth-in-place.
And the cohort that I'm ignoring is not "people who'd like to stay" but "people who'd like the children they abused to stay." It's okay not to give them money, same way it really is okay not to give farmers special welfare when they riot.
@Alon @kentwillard It's shocking that people with the perspective you are offering have a hard time winning votes from people who choose — perhaps, because by definition in your view their parents abused them — to live grounded in their natal communities. You may not like these people, but either we have a democracy that accommodates them, or we have an authoritarianism where either you prevail over them, or they prevail over you. I'm for the democracy that accommodates them.
@interfluidity @kentwillard Farmer and other reactionary riots are not actually popular, though. The few times the state pushes back, it turns out to be a crowd pleaser, like when Macron repressed the anti-vaccination riots in 2021. Farmer interests have mostly skirted past their unpopularity through clientelism; a lot of midwit conservatives and populists then try to portray clientelism as more moral than ideology. To your original post's point, inflation is less unpopular than unemployment.
@Alon @kentwillard My friend, I think you are doing a great deal of wishcasting of your own preferences. I wish inflation were less popular than unemployment. From a welfarist perspective, inflation is less harmful. But at least as popularity is refracted through democratic politics, inflation is much, much less popular. Unemployment harms a small fraction of the public grievously, and holds the bulk relatively harmless. Inflation harms all the way through past the median voter.
@interfluidity @kentwillard The practice is that the high unemployment of the Great Recession was incredibly unpopular for everyone who was in power at the time. In elite discourse inflation is portrayed as worse because it hurts elites, like rich, recession-proof Northern Virginia. So elite pressure can lead to excessive austerity. But then you look at the political divisions in high-unemployment, low-inflation environments, and they're way worse.
@Alon @kentwillard "divisions…way worse" is very subjective. I agree that unemployment divides the policy into people suffering horribly and people who ignore them and get on with their lives, and that's worse morally. But politically, it is just the case that a recession that cleaves workers into unemployment is less destructive of incumbent votes than an inflation than harms the median voter. 1/
@Alon @kentwillard Places that are long-term depressed, high-unemploymnt, low-growth, low-inflation are full of discontent and division for sure. Failure and poverty breed fascism. https://drafts.interfluidity.com/2023/08/14/fascism-as-triage/
But that's a very different question than the question that faces political actors, whether a near-term downturn is better met with austerity to stimulus over the next electoral window. A hopefully transient unemployment is more survivable than an inflation.
/fin
@interfluidity @kentwillard Unemployment hurts a lot more than just the jobless - workers worry about losing their jobs, and businesses worry about poor sales. The reason Germany successfully uses Kurzarbeit is that this system removes the threat of joblessness, making recessions much smoother.
Politically, we see this in extreme right voting: high unemployment correlates with it, but the unemployed themselves rarely vote far right - rather, employed workers get status-anxious and vote fash.
@Alon @kentwillard I love the german work-sharing approach, on welfarist grounds. I hope it yields political stability dividends too, but I don't know. I think the correlations you point to are not fluctuations in employment, but regions with chronic unemployment which yes, does breed the fash. The tragedy, tho, is that near-term, austerity is safer than stimulus from an electoral perspective. Long-term, yes, absolutely, that risks the fash, if austerity becomes bakes-in as chronic depression.
@interfluidity @kentwillard The correlations of high unemployment and fash voting are diachronic - I believe I read them in a Cas Mudde paper, looking at the national unemployment rate in various elections all over Europe over a period of time.
The spatial correlation *within* a country is that the sort of people who move to opportunity tend to vote more progressive.
@Alon @kentwillard Re the paper, diachronic is too nonspecific for me to really understand or comment about.
Re the spatial correlation, yes. But then progressive just become a geographically segregated faction in a zero-sum game to have its interests looked after. That's what we want to avoid. Rewarding migration without accommodating and somehow coopting into a forward-looking politics those who remain exacerbates zero-sum factionalism, rather than coparticipation in a shared, joint project.