In conversation with Joan Williams

“Equitable Growth in Conversation” is a recurring series where we talk with economists and other social scientists to help us better understand whether and how economic inequality affects economic growth and stability.

In this installment, Equitable Growth’s Research Director Elisabeth Jacobs talks to Joan Williams, distinguished professor of law, the University of California, Hastings Foundation chair, and director of the Center for WorkLife Law at the University of California, Hastings College of the Law. They talk about Williams’ book on the white working class.

Elisabeth Jacobs: I’m delighted to be here today with Joan Williams. Joan is one of the first academic grantees co-funded by Equitable Growth for her work with University of Chicago professor Susan Lambert on the business-side impacts of scheduling stability. But we are not here to talk about that today. We are instead here to talk about Joan’s new book, White Working Class: Overcoming Class Cluelessness in America, released by Harvard Business Review Press recently. I’d like to kick off the conversation with the question: Why did you write this book, knowing you are a work-life scholar?

Joan Williams: Well, I basically think of myself as a social inequality scholar. I’m chiefly known for my work on gender, but I have also done a lot of work on how the experience of gender bias differs by race. And I have studied social class for 40 years. I married into a white working-class family in 1978, so I have been thinking a lot about how to bridge what I call the class culture gap between the professional, managerial elite and the white working class.

Jacobs: You’ve chosen to write this book about the white working class for all kinds of reasons. But how many of the things in your book do you think are about the white working class per se, and how many of them are actually more broadly applicable to a very diverse working class? African American families have struggled with many of the challenges.

Williams: There are so many overlaps between the white working class and the working class of color. The need and intense desire for stable jobs that will yield a modest middle-class standard of living is not a white working-class thing, it’s something that appeals to nonelites of all races. That’s why it should be such a central concern for both political parties.

The culture wars reflect that there exist a very different set of cultural dispositions among elites and nonelites. Elites value artisanal coffee. Gender roles. Spiritualities. You name it. Among nonelites, the search is less for novelty than for stability, so nonelites of all races put a high value on institutions that anchor stability, including the military, religion, and family values.

All that produces cultural conflict, but it’s not between the elite and the white working class. It’s between the elite and everybody who’s not elite—poor and middle class of all races. The elites often talk disrespectfully of the cultural truths of nonelites—that’s one of things that’s coming back to bite society.

Jacobs: You talk a lot about how, for white working-class people, their social networks, their kin structures, their lives are very much place-based in a way that means that the expectation that people just move to better jobs and the sort of head-scratching by economists about “why don’t people just move to where the jobs are” doesn’t make a lot of sense, if you think about it in the context of people’s social-cultural lives.

From an economic perspective, it doesn’t make much sense, and I think your work is kind of answering why this decline in labor mobility and decline in economic dynamism in the United States might be an economic puzzle, but in some ways, the sociology of it answers the questions.

Williams: Elites have what are called entrepreneurial networks—wide circles of acquaintances that are often national, or even global. And that’s how 70 percent to 90 percent of professionals get jobs. Working-class and poor people typically have place-based clique networks of family, neighbors, and friends they’ve known forever. Nonelites rely on these clique networks to protect them from their disadvantaged market position, by providing childcare, elder care, and help with things such as home repairs.

So, for moving to make sense, nonelites need not only to find a better job; they need to find one that’s so much better that they come out ahead, despite the fact they now have to pay for childcare and elder care because no family is close enough to help out. Another reason nonelites are reluctant to move is that their social honor is not portable. I was just living in the Netherlands; all I had to do is say I am a law professor teaching at one of the leading Dutch universities for people to want to get to know me. I tell the story in my book about going back to a high school reunion in a working-class town, and having someone ask a former classmate what he did for a living. The classmate got very red and snapped, “I sell toilets!” If your job is inglorious, you want to stick around people who know you, and know that you’re a person to be reckoned with—not just a guy who sells toilets.

Another important point: If you’re working class, the people in the communities you’re moving to have the same kind of dense place-based networks you have—and they’re going to make sure that good jobs go to people in their networks, not to you. This is just the kind of erasure of the realities of people’s lives on the ground that, if I can say this respectfully, economists are so good at.

Jacobs: So, what do you do about that? You often speak about the need for upskilling through non-college-based credentialing and vocational education. But what do you do if people are in places where there aren’t jobs? You can upskill all you want, but if the jobs aren’t there, there’s still the question of how do you make the jobs show up?

Williams: We need a new education-to-employment system that builds alliances between community colleges, local universities, and unions that set up alliances with local businesses, some of them existing, some of them attracting new businesses, so that the businesses can depend on a steady supply of certificate-trained workers with the specific job skills that are needed for their jobs. The goal should be certificate programs that are far shorter than a four-year degree, offered on family-friendly schedules because workers will need to retrain not once, but often several times, for new jobs, as old jobs morph or disappear. This idea and many others come from a very important book out of a Markle Foundation working group, and the book is called America’s Moment, and the initiative is called Rework America. Part of the reason American politics has turned so bitter is that America did globalization wrong, resulting in the loss of many middle-class jobs. We need to do automation right.

Jacobs: That seems like a good note to wrap on. Thank you so much.

Williams: Thanks a lot. I appreciate it.

Boushey testifies before congressional forum

Heather Boushey, Executive Director and Chief Economist of the Washington Center for Equitable Growth, testified on September 27, 2017, at a forum conducted by House Ways and Means Committee Democrats on issues related to tax reform.

Download File
Boushey testifies before the Ways and Means committee

Read the full PDF in your browser

In her testimony, Boushey reviewed the longer-term economic challenges facing U.S. families, including slow income growth and rising inequality, and addressed a number of substantive tax reform issues, telling the panel that “the focus of reform should be the living standards of American families, particularly middle-class families and families striving to reach the middle class.”

Must-Read: Ben Thompson: Defining Aggregators

Must-Read: Ben Thompson: Defining Aggregators: “Value has shifted away from companies that control the distribution of scarce resources to those that control demand for abundant ones… https://stratechery.com/2017/defining-aggregators/

…The purpose of this article is to catalog exactly what the latter look like. Aggregators have… Direct Relationship with Users… Zero Marginal Costs For Serving Users… Demand-driven Multi-sided Networks with Decreasing Acquisition Costs…. Aggregation is fundamentally about owning the user relationship and being able to scale that relationship.

That said, there are different levels of aggregation based on the aggregator’s relationship to suppliers…. Level 1 Aggregators acquire their supply; their market power springs from their relationship with users, but is primarily manifested through superior buying power… Netflix…. Level 2 Aggregators… incur transaction costs in bringing suppliers onto their platform… industries with significant regulatory concerns that apply to the quality and safety of suppliers…. Level 3 Aggregators do not own their supply and incur no supplier acquisition costs (either in terms of attracting suppliers or on-boarding them). Google is the prototypical Level 3 Aggregator…. Social networks are also Level 3 Aggregators…. Level 3 aggregators are predicated on massive numbers of users, which means they are usually advertising-based (which means they are free to users)…. Super-Aggregators operate multi-sided markets with at least three sides — users, suppliers, and advertisers — and have zero marginal costs on all of them. The only two examples are Facebook and Google…

Should-Read: Christopher Jeffery: Fed’s [John] Williams floats co-ordinated shift from 2% targets

Should-Read: Christopher Jeffery: Fed’s [John] Williams floats co-ordinated shift from 2% targets: “Williams… believes 2% inflation targets adopted by most of the developed world’s central banks will prove to be suboptimal over the next 10 years… https://www.centralbanking.com/central-banks/monetary-policy/operating-framework/3301501/feds-williams-floats-co-ordinated-shift-from-2-targets

…Real productivity and the associated natural rate of interest (used in the Taylor rule, for example) are both in decline – and there is no reason to believe this will change in the next decade or so. “There could be a mutual benefit for countries to change their price-stability policies together,” says Williams in the in-depth interview, to be published tomorrow…. “QE is viewed – fairly or unfairly (I would say unfairly) – as a ‘beggar-thy-neighbour’ policy,” he says. “Research has indicated that if several countries are at the lower bound, while these policies primarily work by boosting demand, they also result in shifting demand from one country to another. So maybe co-operation and co-ordination should be happening in the discussion about frameworks.”… If all central banks stick with “current low inflation targets”, when one country has to stimulate the economy via QE, “a lot of the effect will happen through demand shifting, or beggaring thy neighbour”: “The scary scenario is a repeat of what we’ve seen, where everybody’s at the lower bound – not because of a crisis, but due to the reasons recessions happen – and we’re all stuck with uncomfortable choices.”…

“If you want to see my gloomy view of the future, just open up your computer and look at the last five years,” he says. “I’m not saying that we’re going to have another financial crisis, it’s just that the challenges of using interest rates to keep the economy on track and inflation stable are going to be very difficult.” Instead of people calling for central banks to co-ordinate regular policy actions – which Williams says is “almost impossible, tactically, in most circumstances” – they should engage in a “true policy strategy debate”.

Must-Read: Josh Barro: Trump, GOP tax plan is looming political disaster

Must-Read: Josh Barro: Trump, GOP tax plan is looming political disaster: “President Donald Trump tweeted Wednesday morning, hours before the announcement of the latest Republican tax proposal, that… http://www.businessinsider.com/trump-gop-tax-plan-political-disaster-2017-9

…”virtually no President has accomplished what we have accomplished in the first 9 months.” This is probably a good time to reflect on George W. Bush. While Trump likes to talk about “massive tax cuts,” Bush actually signed one less than five months into his term in office. Bush’s proposal was popular and attracted substantial Democratic support. And much of it is still the law today. Bush understood the politics of tax cuts in a way that Trump and House Speaker Paul Ryan do not — which is why Ryan and Trump have produced a tax plan that is a political time bomb.

Tax cuts are more popular if they don’t increase taxes on people
A key talking point the Bush administration used repeatedly to sell their tax plan was that it would “reduce taxes on everyone who pays income taxes.” This statement was right there in the first paragraph of Treasury Department’s announcement of the tax proposal — which, I would note, was released in February of Bush’s first year in office, not September. Most importantly, the statement was true…. The proposal was explicitly designed to have extensive benefits for middle-income families, so he could go around the country and accurately say it offered a tax cut for everyone who paid income taxes and that nobody’s income taxes would go up.

Trump is about to propose to raise taxes on a lot of middle-income people to cut taxes for the rich. Because a lot of details of the Republican tax plan have yet to be filled in, we can’t say yet who would pay what…. But… we can identify a group of taxpayers likely to face tax increases from this proposal: people with moderate to upper-moderate incomes who take itemized deductions, like those for mortgage interest and state and local taxes paid…. While these taxpayers would lose key tax benefits, rich taxpayers would come out ahead….

“A tax cut for everyone who pays income taxes” was popular. Republicans won’t be able to say that this time. “A tax increase for many ordinary families to pay for a tax cut for the rich” is what Democrats will say. They’ll be right. And it will make this plan impossible to pass.

Must- and Should-Reads: September 26, 2017


Interesting Reads:

Should-See: Michael Jordan: On Computational Thinking, Inferential Thinking and Data Science

Should-See: Michael Jordan: On Computational Thinking, Inferential Thinking and Data Science: “The rapid growth in the size and scope of datasets in science and technology has created a need for novel foundational perspectives on data analysis that blend the inferential and computational sciences… https://bids.berkeley.edu/resources/videos/computational-thinking-inferential-thinking-and-data-science

…That classical perspectives from these fields are not adequate to address emerging problems in Data Science is apparent from their sharply divergent nature at an elementary level—in computer science, the growth of the number of data points is a source of “complexity” that must be tamed via algorithms or hardware, whereas in statistics, the growth of the number of data points is a source of “simplicity” in that inferences are generally stronger and asymptotic results can be invoked. On a formal level, the gap is made evident by the lack of a role for computational concepts such as “runtime” in core statistical theory and the lack of a role for statistical concepts such as “risk” in core computational theory. I present several research vignettes aimed at bridging computation and statistics, including the problem of inference under privacy and communication constraints, and including a surprising cameo role for symplectic geometry…

September 26, 4:10 PM PDT

Should-Reads: CBPP: Tax Reform Briefs

Should-Reads: CBPP: Tax Reform Briefs: “Congress is expected to consider legislation to make major changes to the tax code this year. Here is a series of two-page explanations of key issues in tax reform… https://www.cbpp.org/tax-reform-briefs

…Tax Reform Should Raise Revenues — And Certainly Should Not Lose Them… Republican Tax Plans Would Largely Exclude Small Businesses — and Could Even Hurt Them… GOP Tax Plans Would Emulate Failed Kansas Experiment… Tax Cuts for the Rich Aren’t an Economic Panacea — and Could Hurt Growth… Large Job Growth Unlikely to Follow Tax Cuts for the Rich and Corporations… Pass-Through Tax Break Would Benefit the Wealthiest and Encourage Tax Avoidance… Actual U.S. Corporate Tax Rates Are in Line with Comparable Countries… Corporate Rate Cuts Are a Poor Way to Help the Economy and Most Workers — and Could Hurt Them… Corporate Tax Cuts Mainly Benefit Shareholders and CEOs, Not Workers… “Territorial Tax” Is a Zero Rate on U.S. Multinationals’ Foreign Profits, Threatens U.S. Revenues and Wages… Multinationals’ “Trapped” Foreign Profits Not Key to Jobs and Growth… Repealing Estate Tax Would Provide Windfall to Heirs of Wealthiest Estates… Trump Campaign and House GOP Tax Plans Violate Mnuchin Rule…

Should-Read: Robert C. Feenstra and Akira Sasaharab: The “China Shock”, Exports and U.S. Employment: A Global Input-Output Analysis

Should-Read: Robert C. Feenstra and Akira Sasaharab: The “China Shock”, Exports and U.S. Employment: A Global Input-Output Analysis: “We quantify the impact on U.S. employment from imports and exports during 1995-2011, using the World Input-Output Database… http://cid.econ.ucdavis.edu/Papers/Feenstra_Sasahara.pdf

…We find that the growth in U.S. exports led to increased demand for 2 million jobs in manufacturing, 0.5 million in resource industries, and a remarkable 4.1 million jobs in services, totaling 6.6 million. Two-thirds of those service sectors jobs are due to the export of services themselves, whereas one-third is due to the intermediate demand from manufacturing and resource – or merchandise – exports, so the total labor demand gain due to merchandise exports was 3.7 million jobs. In comparison, U.S. merchandise imports from China led to reduced demand of 1.4 million jobs in manufacturing and 0.6 million in services (with small losses in resource industries), with total job losses of 2.0 million. It follows that the expansion in U.S. merchandise exports relative to imports from China over 1995-2011 created net demand for about 1.7 million jobs. Comparing the growth of U.S. merchandise exports to merchandise imports from all countries, we find a fall in net labor demand due to trade, but comparing the growth of total U.S. exports to total imports from all countries, then there is a rise in net labor demand because of the growth in service exports.


**Should-Read: Robert C. Feenstra, Yuan Xu, and Hong Ma: US Exports and Employment: “We examine the employment responses to import competition from China and to global export expansion from the United States… http://cid.econ.ucdavis.edu/Papers/Feenstra_Ma_Xu.pdf

…both of which have been expanding strongly during the past decades. We find that although Chinese imports reduce jobs, at both the industry level and the local commuting zone level, the global export expansion of US products also creates a considerable number of jobs. On balance over the entire 1991-2007 period, job gains due to changes in US global exports were slightly less than job losses due to Chinese imports. Using data at both the industry level and the commuting zones level, we find a net loss of around 0.2-0.3 million jobs. When we extend the analysis to 1991-2011, we find the net job effect of import and export exposure is roughly balanced at the commuting zone level.

Should-Read: Rachel Gillett and Anaele Pelisson: 12 Jobs Robots Are Already Taking Over

Should-Read: It is, I must say, rather delicious that one of the twelve job categories that robots are supposed to intrude open most rapidly is… “robotics engineer”:

Rachel Gillett and Anaele Pelisson: 12 jobs robots are already taking over: “Talk to any futurist, and they’ll tell you that robots are coming for our jobs… http://www.businessinsider.fr/us/jobs-replaced-by-robots-2017-9/

…But don’t let those far-off predictions lull you into a false sense of security. In many workplaces, they’re already here…. Here are 12 jobs with the highest degrees of automation, as well as what they pay and how much the job will grow or decline by the year 2024 (where the average projected employment change is 6.5% growth), according to the US Bureau of Labor Statistics….

12 Jobs Robots Are Taking the Fastest: Etcher or engraver 2.7% $31,116… Crop farmworker or laborer 9.1% $22,000… Property and casualty insurance claims examiner 3.3% $63,680… Robotics engineer 4.0% $97,300… Customs broker 4.8% $69,040… Postal service mail sorter, processor, or processing machine operator 33.7% $56,220… Medical and clinical laboratory technologist 14% $61,070… Chemical plant and system operator 9.2% $59,920… Telephone operator 42.4% $37,000… Air traffic controller 8.6% $122,410… Reservation and transportation ticket agent or travel clerk 1.4% $35,230…