The Haves and the Have-Nots: What Happens to the Folks in the Lower Half of the Bell Curve?

More is betterCredit: DreamstimeI am not endorsing Columbia University economist Jeffrey Sachs' policy prescriptions in his New York Times op-ed today, but his data about what is driving rising income inequality is worth pondering:

Decent jobs for low-skilled workers have virtually disappeared. Some have been relegated to China and emerging economies, while others have been lost to robotics and computerization.

The results of these changes can be seen in two starkly different employment figures: since 2008, 3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma.

Over at the Washington Post, superb economics columnist Robert Samuelson points out in his column today on the underrated benefits of international trade that in fact relatively few low-skilled manufacturing jobs have been "relegated" overseas:

Although imports worsen the secular loss of manufacturing jobs, the perceived impact is probably greater than the actual impact. Suppose, say the two economists, the United States had no manufacturing trade deficit. This would, they estimate, boost U.S. factory jobs by 2.7 million. That’s a lot of jobs and would significantly add to manufacturing’s total, now about 12 million. Still, it pales beside the Great Recession’s employment loss (8.7 million) or total payroll employment (about 135 million).

Even if these factory jobs magically materialized, gains might be temporary. Advancing productivity could soon erode the total. Similarly, it’s true that foreign competition puts downward pressure on U.S. wages and has, almost certainly, contributed to growing wage inequality. But the effect seems modest, because trade doesn’t dominate the labor market.

Both Samuelson and Sachs point out that modern manufacturing needs fewer and fewer workers anywhere in the world as ever more capable machines handle more repetitive tasks. Sachs thinks that more and better education will help solve the problem of unemployment among the low-skilled. But as jobs become more intellectually demanding, how much can more and better education really help the folks who find themselves in the lower half of the cognitive bell curve? 

For more background, see my article, "Were the Luddites Right?"

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  • VG Zaytsev||

    The results of these changes can be seen in two starkly different employment figures: since 2008, 3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma.


    That can't possible be an effect of making a college credential the only viable filter for prospective employees.

    And that effect can't possibly be nudging people to go to college only to get the credential so that they are employable.
  • Dweebston||

    Not to mention previously "unskilled" occupations now requiring post-secondary certification by state fiat. I didn't rtfl, so maybe it's addressed.

  • sarcasmic||

    I wonder if the people on the bottom were allowed to sell their labor for something lower than the arbitrary minimum price set by the government, if they might be able to find employment.

    Nah. That's rubbish. Supply and demand does not apply to the price of human labor.

    And even if it did, it's better that someone be unemployed than to be paid something below a living wage. That would be unfair.

  • some guy||

    Removing minimum wage laws would result in higher employment rates for these people, but there is a limit. Surely we can agree that there is a cognitive limit, below which a person is not employable at any wage. Since automation primarily impacts low-skill jobs, it is reasonable to think that automation is driving up this cognitive limit. If this is truly happening, what do we do when a large part of society is not employable due to intelligence limitations? Will there always be someplace in the service industries capable of soaking up this excess of low-skill workers?

  • Matrix||

    DMV

  • ||

    I've been to DMV more times in the past year than I like. And it might be an improvement to have newer crops of moron to sit in those cubicles.

  • Counterfly||

    Surely we can agree that there is a cognitive limit, below which a person is not employable at any wage.

    I don't know, I doubt there is (other than maybe vegetative - and even then, I could probably come up with something).

    Now, having them employeed efficiently is a different story. I mean a lot of companies generally hire a bunch of legit retards to do custodial work - not because they're cheaper or better, but because of the second order effect of 'HAY WE EMPLOY RETARDS, WE'RE A GOOD COMPANY' (and also, I imagine some Fed program winds up making it actually cheaper, even though I just said it wasn't...dunno).

    Now on your actual point, I think if we didn't regulate companies out of existence, they wouldn't have any problem employing cognitatively limited individuals in abundance. I mean you can't tell me that labor intensive companies move to Mexico because the workers there are so much smarter.

  • some guy||

    I guess it comes down to the difference between the cost of living and the value added by a person. Automation increases the value added by the machine builders, operators and maintainers, but decreases the value added by unskilled laborers. Automation also drives down the cost of living at any arbitrary standard. So ultimately we'll be okay so long as the cost of living drops faster. Unskilled workers will always be able to find something gainful to do. Maybe one day everyone with above average intelligence will be able to afford a personal assistant...

  • VG Zaytsev||

    Automation to a large degree is an unintended consequence of labor laws and other regulations.

  • Dweebston||

    Doesn't this seem like a good problem to have in light of the alternative, a slew of capable but arbitrarily unemployable workers? Especially since the minimum wage hits proficient but young and untested workers who otherwise would garner the technical expertise and conditioning of seasoned labor-force vets.

    I'd prefer paying charity to take care of unemployable invalids than welfare to take care of unemployable competents.

  • some guy||

    Oh, I agree. I'm just wondering how it will play out. Any existing job can conceivably be automated. Newly created jobs typically require more skills than those that are replaced by automation. So what if the bottom of the bell curve can't keep up?

    How would a theoretically unemployable person obtain food? Charity and coercion are the only options.

  • sarcasmic||

    Government: idiots telling the experts how to do their jobs.

    I'm sure someone who is too retarded to be productive in the private sector is well qualified for some regulatory position in the government.

  • KDN||

    Those that can, do. Those that can't, teach. Those that can't teach, join the Department of Education.

  • prolefeed||

    Surely we can agree that there is a cognitive limit, below which a person is not employable at any wage.

    Perhaps people with an IQ below 50 ...

    I remember the Hawaii state legislature talking a few years ago about raising the minimum wage above the federal minimum, and a group that employed mentally handicapped people pointing out that they would throw all these people out of jobs that they really needed.

    If you've got strength and a good attitude, you're employable at SOMETHING for some wage above $0 per hour.

  • VG Zaytsev||

    The minimum wage is only a small part of the problem. A larger part is the web of regulations and tort actions that make employing anyone problematic and that also hinder self employment.

  • The Late P Brooks||

    Sachs thinks that more and better education will help solve the problem of unemployment among the low-skilled.

    This looks like a job for the Education Fairy!

  • A Serious Man||

    Too many chiefs and not enough Indians is never a problem.

  • The Late P Brooks||

    since 2008, 3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma.

    Are we talking about actual job skills, or merely noting the increase in completely bogus Human Resources requirements?

  • Counterfly||

    I'll give you one guess.

  • Fist of Etiquette||

    Who wants to work for anything but a living wage anyway? Good riddance to the choice for that level of employment, I say.

  • Brett L||

    Now that "administrative assistants" need college degrees to do secretarial work, I'd say that accounts for the 3.1M turnover.

  • some guy||

    And do you really need a Master's degree to teach elementary school? Do you need an M.D. to diagnose a sprained ankle or a head cold? We seem to believe that education is a substitute for intelligence or experience. But that only goes so far...

  • AlmightyJB||

    Even beyond that. How many articles have we seen here about licensing to drive a cab, cut hair, do interior design. You can't even start a lemonaid stand without a permit. Want to employ a bunch of low skill workers? Fire a bunch of bureaucrats.

  • Tedd||

    "Fire a bunch of bureaucrats."

    I wonder what the multiplier effect of laying off bureaucrats is?

  • mad libertarian guy||

    This.

    My wife's job, an executive assistant, required a college degree. It in no way requires a 4 year degree to do.

  • The Late P Brooks||

    I realize I'm a wrecker/hoarder, but I am perfectly willing to leave a lot of opportunities on the table because I absolutely, positively refuse to deal with the morass of confusion and despair represented by taking on even a single employee.

    I wouldn't even hire a high school dropout / apprentice to follow me around and clean up after me (as if you could even find such a person in 21st Century America; after two days, they know all there is to know about everything).

  • Counterfly||

    What if she was a hottie.

  • AlmightyJB||

    She probably doesn't need any help getting a job.

  • Dweebston||

    You need to check your cismale white hetero privilege. Employment contingent on her looks is repression.

  • AlmightyJB||

    Hey, I don't make the rules.

  • Brett L||

    Have you ever seen pharmaceutical reps? Most repressed people on the planet.

  • effinayright||

    Maybe they are really Thorazine reps...

  • Jordan||

    THIS^

    How many more jobs would we have if it weren't for leviathan making it prohibitively expensive and complicated to hire someone?

  • mad libertarian guy||

    Racist.

  • AlmightyJB||

    How much cognitive ability does it takes to help harvest mary jane and cocaine.

  • AlmightyJB||

    What about the cost of goods? How many low skilled workers own an iphone and flat screen tv. How about a house and a car. Also, how many people in this country are not getting their basic needs met (shelter, food, water). Of those who ard not how many of them are going without either by choice or because they are mentally (not cognitively) unable to take cars of themselves.

  • some guy||

    Of those who ard not how many of them are going without either by choice or because they are mentally (not cognitively) unable to take cars of themselves.

    That's another aspect of this problem. What's the difference between someone mentally incapable of mathematically balancing their own budget and someone mentally incapable of the restraint needed live within their means?

  • AlmightyJB||

    Take care.

  • Zeb||

    Thanks.

  • AlmightyJB||

    :)

  • Bardas Phocas||

    But as jobs become more intellectually demanding, how much can more and better education really help the folks who find themselves in the lower half of the cognitive bell curve?

    I have a theory that all the bullshit HR requirements from gov or insurance, ect. are good generators of HR positions to be filled by slack jawed idiots.

  • Zeb||

    So there is a place for those without useful skills to find employment.

  • sarcasmic||

    City Hall

  • Zeb||

    I was thinking HR departments, but that too. I suppose city goverment HR departments must employ the worst, most useless people in the world (at least that have college degrees).

  • some guy||

    Absolutely. As bad as the Federal government is, state governments are worse and local governments are even worse. Home owners associations are at the bottom. As you go down the government ladder you get less power and influence, but more corruption and outright meanness.

  • Tedd||

    "As you go down the government ladder you get less power and influence, but more corruption and outright meanness."

    At first I thought that contradicted Lord Acton's dictum, but maybe not. The municipal bureaucrat does have less power in one sense but, relative to his or her sphere of influence, perhaps more power than a state or federal bureaucrat, due to less oversight.

  • The Late P Brooks||

    Surely we can agree that there is a cognitive limit, below which a person is not employable at any wage.

  • AlmightyJB||

    Cause we don't have any programs to help those people. None whatsoever. Where I live, I don't care how many levies or new taxes get turned down at the ballot box, the levies to give more money to help the mentally retarded always pass. Always.

  • The Late P Brooks||

    Goddammit.

    Surely we can agree that there is a cognitive limit, below which a person is not employable at any wage.

    "The world needs ditch diggers, too."

  • Ptah-Hotep||

    "The world needs ditch diggers, too."

    My parents used to tell me that all the time. But they were of the type that as long as you did whatever job to the best of your ability, there was no shame in it.

  • phandaal||

    Had a guy working for me once who literally couldn't be trusted to dig a ditch. We gave him a hydraulic excavator to move a small pile of soil one time and he ended up digging a hole. You can be sure that we didn't make that mistake again.

    They are out there.

  • some guy||

    Exactly what I was thinking, phandaal. If someone can use a shovel, but can't follow simple directions they'll end up doing more harm than good. There are people out there with negative productivity.

  • Brett L||

    My grandfather dug ditches before becoming a cop. Digging ditches was more honorable, but walking a beat was easier and paid better.

  • mad libertarian guy||

    So may people think of a job as a representation of who they are. "I'm a waiter" or "I'm an engineer" as opposed to "waiting tables is what I do to pay my bills."

    I try and teach my kids to treat the wait staff at the local Mexican joint every bit as good as they do their doctors or teachers, because a job is simply what people do for money, not "who they are."

  • Rasilio||

    Technically not any longer, there is no technological reason why the iRobot guys could not develop a completely robotic ditch digger, simply program in a few simple parameters and a few minutes later a perfect ditch appears.

  • ||

    Newer and more efficient manufacturing machinery requires less repetitive tasks they need constant readjustment. The slow learner no matter how much education cannot be given that complex task. Unfortunately 65% of the world’s population fits into the category of slow learners; they all cannot be gardeners or manicurists. Genetic manipulation which can produce smarter children will solve the problem of high unemployment among the mentally challenged job applicant.

  • $park¥||

    No matter what you do, half of the people out there will be below average.

  • Virginian||

    65% of the world's population are slow learners? Citation fucking needed.

  • SugarFree||

    Would you even understand a citation if he gave you one?

  • Virginian||

    Wow you're right. I mean, there is a better than even chance I'm a slow learner. And threads on Hit and Run live for about four hours, tops.

    There's no way I can figure it out in time.

  • Wind Rider||

    No, he's too slow a learner to use Google himself.

  • Brett L||

    Yeah, that can't be true. 65% of the world's population falls in the first distribution from the norm as far as intelligence goes. Any person in that range (85-115) can be taught to do anything that doesn't require calculus. I think Jerry Pournelle, who did some professional work on learning at one point, said that you can teach someone with an 85 IQ calculus, but they tend to be very rote about it.

  • some guy||

    IQ isn't the be-all end-all for productivity. There are all sorts of mental and physical disorders that can render an otherwise competent person worthless.

  • Brett L||

    True, but it is a very close measure for who is a "slow learner".

  • ||

    It would be a time saver and cost cutter if the Slow learner had SL stamped on their ID card. They would be treated with more kindness and understanding at job interviews.

  • Lee Reynolds||

    Very true, just look at Bill Ayers.

  • Lee Reynolds||

    Calculus isn't even hard.

    What tends to trip people up isn't calculus itself, but the foundational math it depends upon, math they never actually learned how to do competently.

    If someone can't find the roots of a quadratic equation, and if in fact the very mention of doing so fills them with dread, there is no way in hell they'll ever master derivatives.

    They might understand what a derivative is in a general sense (how fast is something changing), but they'll never be good at finding them.

    My wife is like this. She's very bright when it comes to the verbal side of things, and in fact got a composite SAT score in the 1300 range back when the top score was 1600. Math however, TERRIFIES her and will reduce her to tears.

  • Zeb||

    I think that regulation of the sorts of things that people used to be able to just go and do is a big problem. Lots of people could go out and find work doing carpentry, odd jobs, cleaning, selling something that they know how to make or starting a small retail business or restaurant, but the overhead for starting up something like that has made such things inaccessible to actual poor people.

  • Jordan||

    Fuckin A.

  • sarcasmic||

    Once upon a time people could do these things, back in the days when the country was prosperous.

    Free enterprise and all that.

    That was why people flocked to the Land of the Free.

    They fled their homeland to come to a place where they could engage in economic activity without first having to ask permission and take orders.

    That place no longer exists.

  • Zeb||

    If it weren't for the "informal economy" imagine how fucked we'd be.

  • Wind Rider||

    The economy actually survives on a rotating $85 service call.

  • Death Rock and Skull||

    There are plenty of 'tards out there living really kick ass lives. My first wife was 'tarded. She's a pilot now.

  • Wind Rider||

    Yep. Anyone that spends time around pilots realizes they have three working brain cells. One to avoid inadvertant contact with the planet, one to talk on the radio, and one to keep from pissing themselves. Overtask them, and something bad will usually happen, besides a stinky cockpit.

  • The Late P Brooks||

    And- what the Education Fairy's loudest cheerleaders, like the current Oval Office chairwarmer, are absolutely incapable of admitting is that people with no actual real world skills are not teachers; they're BABYSITTERS.

  • kinnath||

    So long as the Have need artisinal mayonaise, the Have-Nots will have jobs.

  • Trash Hauler||

    What happens to the dim ones in Libertopia?

  • sarcasmic||

    They organize and take over government. Kinda like what we've got now.

  • some guy||

    Maybe we'll be smart enough to buy them off first. Do you think they would trade all this power for being able to play Xbox all day?

  • sarcasmic||

    Do you think they would trade all this power for being able to play Xbox all day?

    Why when they can use their power to steal your Xbox and have both?

  • JW||

    since 2008, 3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma.

    The increased costs from regulation, gubmint distortion of labor markets and GIMMETHAT for employing a low-skill workers, that decrease their marginal value before even clocking in, reduced their employment?

    Immediately deploy the Smelling Salts Shock Troops.

  • Virginian||

    I wish I had time to write all my thoughts on this topic. This whole meme that "we need more smart people, not stupid people...what are the stupid going to do?" is quite annoying.

    Someone can have no interest in intellectual pursuits. That doesn't make them stupid. For most of human history, the vast majority of people could not read.

    My mechanic probably has never read a book in his life. I'm sure he'd score low on IQ tests. He is worth a thousand high level bureaucrats, because he actually adds value to the world.

  • ||

    Slow learners cannot be good mechanics, new problems always arise which must be solved quickly. An illiterate mechanic that changes only sparkplugs cannot be trusted, he often will replace only the good ones.

  • sarcasmic||

    ^this^

    It takes brains to be a good mechanic.

  • Virginian||

    Except you have declared that over half the people on the planet are slow learners. Sorry, that's bullshit.

  • The Late P Brooks||

    What happens to the dim ones in Libertopia?

    Same as now. They'll write economics opinion columns for the New York Times.

  • Brett L||

    Now, now Brooksie, everyone knows the NYT would quit publishing their loss leader and just be a real-estate holding company in Libertopia.

  • Mick Kraut||

    As an HR Professional I can tell you that these educational requirements do not make for more HR positions or make the job easier. It makes recruiting significantly harder. If you are a Federal contractor, much of this is forced upon you by the government. They write the descriptions and you have to follow them. But not always, many companies have set goals and targets that as many as 95% of their new hires must possess a college degree at some level (Associates and above)...I lead recruiting for a mid-size software company and before my current job I led recruiting for a $1B division of a Fortune 10 company and I can tell you that for the most part the inflation of educational requirements is driven and attempt to find higher quality employees but it largely misses the mark.

    It assumes that the existance of the markers provides a demonstration of their ability to succeed. It sounds good, but it doesnt work. The Fortune10 company set the requirement that of 95% of their hires to possess at least an Associate's Degree but it did not require that that degree be relevant to the position at hand.

    It was simply a binary state, degreed or not degreed. A candidate for a Project Manager role with an AA and 3 years of experience was deemed preferrable to a non degreed candidate with 7 years of experience. It didnt matter if that AA had any relevancy to the actual job.

    A very poor way to evaluate talent. It's about "doing" and not about "having"...

  • Mick Kraut||

    The mistake made here is an example of Reynold's Law...
    http://pjmedia.com/instapundit/133452/

    "If middle-class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle-class people. But homeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification..."

  • Flemur||

    "A very poor way to evaluate talent."

    Griggs v. Duke Power made it illegal to evaluate talent efficiently.

  • Virginian||

    Griggs v. Duke Power made it illegal to evaluate talent efficiently.
    ________________________

    Yep. God forbid we take some poor kid who is smart but had to drop out of school and treat him based on his raw intelligence and not his paper credentials.

  • Mick Kraut||

    Nearly all disparate impact legal actions were spawned out of this case...

    There are ways to evaluate talent that dont run afowl of Griggs but layering a college degree requirement isnt one of them.

  • Thane of Whiterun||

    Pop quiz: why do protectionists think only Americans have the right to earn a living?

  • mad libertarian guy||

    Because mercantilism is all the rage.

  • prolefeed||

    Decent jobs for low-skilled workers have virtually disappeared. Some have been relegated to China and emerging economies, while others have been lost to robotics and computerization.

    The results of these changes can be seen in two starkly different employment figures: since 2008, 3.1 million new jobs have been created for college graduates as 4.3 million jobs have disappeared for high-school graduates and those without a high school diploma.

    I'm sure this loss of low skill jobs had * nothing * to do with the following:

    Federal Minimum Wage Rates

    2006 5.15
    2007 5.85
    2008 6.55
    2009 7.25

  • mad libertarian guy||

    How dare you insinuate that raising the minimum wage by nearly 50% in just 4 years could have an impact on hiring low wage workers.

    And what isn't understood by the "LIVING WAGE" crowd is that raising the minimum wage, raises EVERYONE's wages. That guy who was making $1.50 above minimum wage also needs a raise in order for him to fall in line with the newly mandated wage market.

  • SukieTawdry||

    The mode of that particular curve would gradually, but steadily, move rightward if we let natural law takes it course. But we're a compassionate society. If an individual doesn't have the inherent attributes one needs to be able to provide adequately for self and family, we step in to assist with the providing and in some cases, provide it entirely. (After all, why should someone be deprived of a family and a decent life just because he was born on the wrong side of the Bell Curve, something over which he had no control?) We ensure that the "lower half" keeps replenishing its numbers.

    Now, lots of people will say they prefer such a society even with all it wroughts. But sooner or later, as we're finding out, the system will become untenable. Then what?

  • Lee Reynolds||

    I do not care what happens to those who will not help themselves. Failure to hone and develop marketable skills should not be responded to with attempts to create low-skill jobs. It is like Aesop said: DON'T FEED THE GRASSHOPPERS.

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