A reminder on the current size of the gig economy

Posted on by Emilie Openchowski
A smartphone displaying the Lyft app is shown in Detroit.

In a piece for a recent issue of The New Yorker, Nathan Heller reviews the impact of the gig economy in the United States. Heller looks at how the growth of online platform companies that supply on-demand labor—such as Uber Technologies Inc., Lyft Inc., and Airbnb Inc.—as a trend that some policymakers and thinkers want to support for a variety of reasons. But the piece never really gets around to telling the reader how much of the economy is influenced by these new companies. Taking another look at the data on the size of the gig economy and other changes in the labor market might change the narrative.

In Heller’s piece, former Secretary of Labor Tom Perez mentions that he asked the U.S. Bureau of Labor Statistics to reinstate the Contingent Worker Supplement survey, which would provide data on the gig economy and other forms of alternative work arrangements. The survey was discontinued in 2005, meaning that policymakers and academics alike since then had no idea how pervasive working arrangements such as contracting or temporary workers are in the United States today.

Two economists, however, recognized the need to fill this information gap and asked the RAND Corporation to run a version of the old CWS survey to capture the current state of this part of the labor market. In a paper released last year, Lawrence Katz of Harvard University and Alan Krueger of Princeton University showed the results of that survey. From 2005 to 2015, the share of workers in alternative work arrangements rose from 10.1 percent to 15.8 percent. The highest share of workers were independent contracts (9.6 percent in 2015), but the largest increase was in “workers provided by contracted firms,” rising from 0.6 percent in 2005 to 3.3 percent in 2015.

How much of the rise in alternative work arrangements is due to online gig economy firms such as Uber or TaskRabbit? According to the data compiled by Katz and Krueger, only 0.5 percent of workers provided services through such online platforms. These less stable forms of work are on the rise, but the heralded online firms haven’t been a major contributor to this shift.

Interestingly, Heller notes that advocates of the online gig economy argue that this kind of work replaces “scrubbing bathrooms at the Hilton.” But the hotel industry has been part of the process that’s largely responsible for the rise of alternative workers by contracting out this labor. In his book The Fissured Workplace, David Weil of Boston University describes how hotels and other industries have contracted out work formerly done by core employees.

Of course, the online firms haven’t had enough time to make a significant dent in the labor market, as most of them are less than 10 years old. But the data from this survey should show these companies for what they are—a continuation of a trend that’s been happening in the offline economy for some time. Only once we put these flashy firms in the context of larger trends can policymakers figure out how to respond to these changes.

Some Notes on Eric Miller’s Review of “Public Intellectuals in the Global Arena”…

Posted on by Brad DeLong

Eric Miller: The Unnamed Behemoth: Review of “Public Intellectuals in the Global Arena” http://amzn.to/2pSZyVd: “Deep learning eloquently brought to bear on the contemporary moment has, quite evidently, not been enough to shore up the aging foundations of our republic… https://www.commonwealmagazine.org/unnamed-behemoth

…And a live-from-the-West-Wing Twitter feed is not likely to advance our fortunes, either…. Is the liberal democratic tradition up to the challenge—the challenge of disciplining an economic order that exists not to prosper democracy but itself? On such crucial questions this volume sounds an uncertain note—and a rather quiet uncertain note at that…. No thoroughgoing leftists (seemingly) number among the contributors—none, that is, disposed to warn of enlarging catastrophic conflict between democracy and capital…

(1) But I thought I had done so! Was I too elliptical? “Wealth imbalances alone produce a situation in which… market systems go horribly, dreadfully, diabolically wrong. Consider the Bengal famine…. And what of the British state that ruled India, and was responsible for checking to see whether the incentives the market system was providing really were the incentives that we wanted people to responding to? Prime Minister Winston Churchill sent a telegram, asking: if it were really true that there was famine in India, why was Mohandas Gandhi still alive?…”

(2) The problem, of course, is that the old leftist shibboleth is no longer something anybody can believe in:

The proletariat will use its political supremacy to wrest… centralise all instruments of production in the hands of the State, i.e., of the proletariat organised as the ruling class; and to increase the total productive forces as rapidly as possible…. When… class distinctions have disappeared, and… production has been concentrated in the hands of a vast association of the whole nation… public power will lose its political character… [as] merely the organised power of one class for oppressing another…. In place of… society with its classes and class antagonisms, we shall have an association, in which the free development of each is the condition for the free development of all…

(3) And as Keynes wrote about Trotsky back in 1926:

Granted his assumptions, much of Trotsky’s argument is, I think, unanswerable…. But what are his assumptions?… That a plan exists… that… [that] the proletariat… are converted to the plan… the rest who for purely selfish reasons oppose it…. If we pressed him, I suppose he would mention Marx. And there we will leave him with an echo of his own words–“together with theological literature, perhaps the most useless, and in any case the most boring form of verbal creation.”

Trotsky’s book must confirm us in our conviction of the uselessness, the empty-headedness of Force at the present stage…. All the political parties alike have their origins in past ideas and not in new ideas–and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait…

(4) So what is the new gospel—or, rather, what is the public-sphere intellectual-sociological process that we ought to have to discern the new gospel? And do we have that process? And since we do not, how should we go about trying to build it? Those are, I think, the big questions that our book was trying to address, fitfully and unsatisfactorily as we did so.

Back to Eric:

Willy Lam… on… China… places his hope in… “universal norms,” “universal-style democratic institutions,” and “the values enshrined in the charters of the United Nations.”… [Michael] Zuckert too finds the “liberal-democratic tradition” to be “the indispensable ground for our common moral and political life.” But is the liberal democratic tradition up to the challenge—the challenge of disciplining an economic order that exists not to prosper democracy but itself?…

(5) The answer was supposed to be “social democracy”—or, if you preferred, “liberal democratic socialism”, although the S-ism word has, in my view, been too deeply poisoned by the really existing socialisms that existed behind the Iron Curtain for it to be of any positive discursive use. In Polanyian terms, social democracy was supposed to ensure that people had the rights they thought they deserved and expected to see instantiated even though they were not property rights properly—their rights to stable communities, anticipated income levels, and stability of life and economic organization that Polanyi argued a market society undermined by its “fictitious” transformation of land, labor, and finance into “commodities”. Yet somehow there is now not a Polanyian revolt of “society” against the market economy, but rather of some elements of “society” against social democracy—it is not the market economy, but rather social democracy that is seen as illegitimately taxing and regulating the “productive” and giving to the “unproductive”. The question of the breakdown of the social democratic order in the face of first a hard neoliberalist and now a neo-fascist challenge remains poorly understood.

Back to Eric:

Tellingly, many of the book’s authors find themselves preoccupied with structural-functionalist questions regarding the evolving place of public intellectuals… taking for granted… integrity and stability (or… the impossibility of an alternative)… [and] musings on the “role” of intellectuals in it…. Lilla… contends that “the era of liberal idealism that began in the 1980s and spread in the 1990s is over,” and that we now find ourselves illiberally bound to a global behemoth that is yet unnamed—or not named properly: “We have no idea how this system really works, or even what to call it”…

(6) I see those two currents not in opposition but as instead in mutual support: we do not understand the social and societal world in which we are embedded, and yet we must understand—and fulfill—our role in order to even have a chance of creating a society that can make its important choices. “Tradition” is not an alternative—and it never was. There never were societies based on the “traditional” in the sense that what is old is what is good, and the older the better. There were societies in which change came only slowly, so that what had worked for some people in the relatively recent past was likely to work (of only for today’s analogues of those same people) today. There were societies that turned antiquity and habit into an advantageous Burkean judo move: instead buying all new furniture, find a creative, clever, and beneficial way to utilize the furniture you have inherited, no matter how differently you are using it from what its original purchasers used it for. There were societies that pretended that what was convenient to the powerful—even if a rank innovation—was “tradition” because they could not or dared not enunciate any other reason for it.

Well, in our world change does not come slowly. In our world, the Burkean judo move move is of limited use—especially as it tends to slide into the mendacious and destructive third use of “traditional “. Thus when Eric Miller and Michael Zuckert counterpose “tradition” to “public intellectuals” as ways of collectively thinking about who we shall be, he poses a choice that must be false for us. And, to tell the truth, the choice was overwhelmingly false for all of our predecessors as well, back to the Toba volcanic supereruption and the coming of language to the East African Plains Ape. Time scales and mendacity in the context of limited access to documents and history may have masked that for long periods of time. But it was so.

It is public intellectualism or nothing.

Moreover, I think Eric misdiagnoses the current problem:

Today, thanks to the internet, we may have enlarging “public intellectual” presence, but only—and not coincidentally—in the face of an absent public, a public that, having been educated in a fragmented disciplinary and social order, has given itself over to “jobs and private affairs”: Economics 101. We citizens need a new core curriculum… the active presence of that ancient Augustinian city, portending… a civil society founded upon the bedrock of institutions that store up treasure capital cannot see. And we need teachers—intellectuals, if you will—who can help us to see and seize that treasure. Now.

(7) It is not an absent public that is the problem, but a #fakenews and a Fox News public. Most importantly right now, Mike Pence and Teresa May do not seem to have had their conversations with James and Lachlan Murdoch—and with Rupert—on the importance of preparing the way for the #Amendment25 remedies that are now necessary. I mean, making money by terrifying your elderly viewers and so keeping their eyeballs glued so you can sell them overpriced gold and weapons is all fun and games. But somebody is going to lose an eye—indeed, Mossad has in all likelihood already lost assets.

(8) Not, note well, that I understand the public sphere of the early twenty-first century, or how to improve it…

Must-Read: Eric Miller: The Unnamed Behemoth: “In his 2011 book Reading Obama, the historian James Kloppenberg called the president ‘a man of ideas’… https://www.commonwealmagazine.org/unnamed-behemoth

…an “intellectual” who had long “showed the capacity and inclination to mobilize America’s intellectual traditions to bolster democratic political action.” Indeed, in a recent New York Times interview Obama revealed that even during his years in the White House he dedicated himself to reading—in an effort, as he put it, to “slow down and get perspective,” to “get in somebody else’s shoes,” to “maintain my balance.” Unlike many high-profile politicians, he wrote many of his own speeches, trying, as he says future political leaders must, “to tell a better story about what binds us together as a people.”

If Barack Obama embodies the promise of public intellectualism, his own record also reveals its shaky prospects. Deep learning eloquently brought to bear on the contemporary moment has, quite evidently, not been enough to shore up the aging foundations of our republic—much less bind us together as a people. And a live-from-the-West-Wing Twitter feed is not likely to advance our fortunes, either. “The evolving edifice of public intellectualism,” to use the term of Public Intellectuals in the Global Arena’s editor Michael C. Desch, rests on a foundation whose cement seems to be returning to sand. We have it on good information what comes next.

“Once human societies stop being essentially grounded in tradition, something like public intellectualism becomes constitutive,” observes the political scientist Michael Zuckert in his chapter of this volume. And herein lies the challenge these authors—fifteen in all, from a range of disciplines and nationalities—glimpse and name in diverging ways. If our grounding in tradition is gone, and if the enlightened replacement yet continues its deconstructing course, what have the intellectual avatars of the contemporary order to offer?

Economics, apparently. Desch names the discipline “the preeminent home of public intellectuals” in today’s academy; Mark Lilla drily notes that “Economics 101” is now “the world’s de facto core curriculum.”

The economist J. Bradford DeLong agrees, announcing that “Economists are here to tell you what’s what and how to do it”—teachers in the authoritarian mold, it seems. He follows this pronouncement with the observation that, given the triumph of global capital and subsequent failure of any other organizing principle, mere citizens have no choice but to “listen” to economists. “But you have nearly no ability to evaluate what you hear,” he warns. “When we don’t reach a near consensus, then heaven help you.” As DeLong goes to lengths to show, the country—the world—is in the hands of a field that is nowhere close to such consensus. Such news does not reassure the democratic soul.

DeLong baldly states that “a market economy’s underlying calculus is a calculus of doing what wealth wants rather than what people need.” Several contributors are intent on finding a way to thwart that desire and explore alternatives. Willy Lam, writing on the fate of public intellectuals in China—where, he says, their “toughest challenge” is mere “survival”—places his hope in the triumph of what he calls, variously, “universal norms,” “universal-style democratic institutions,” and “the values enshrined in the charters of the United Nations.” Writing from the United States, Zuckert too finds the “liberal-democratic tradition” to be “the indispensable ground for our common moral and political life.”

But is the liberal democratic tradition up to the challenge—the challenge of disciplining an economic order that exists not to prosper democracy but itself?

On such crucial questions this volume sounds an uncertain note—and a rather quiet uncertain note at that. This may have something to do with the fact that on the whole its contributors lean right; indeed, Desch dedicates the book to Allan Bloom and Samuel Huntington. Remarkably, given their incontestably central place in the history of public intellectuals, no thoroughgoing leftists (seemingly) number among the contributors—none, that is, disposed to warn of enlarging catastrophic conflict between democracy and capital.

Tellingly, many of the book’s authors find themselves preoccupied with structural-functionalist questions regarding the evolving place of public intellectuals in contemporary society, taking for granted that society’s integrity and stability (or, just as concerning, the impossibility of an alternative to the current order). The actual “global arena” of the book’s title is often (again, tellingly) lost from view, replaced by musings on the “role” of intellectuals in it. These portions of the book read like a tired update of mid-twentieth-century sociological theory.

But at key moments urgency breaks through. Lilla in fact goes so far as to conjure the ghost of Marx. “Returning to the baroque edifice Marx’s Capital would be a step backward,” he writes. “But acquiring some of Marx’s ambition simply to describe the reality of contemporary capitalism and its political repercussions would be a genuine advance.” He contends that “the era of liberal idealism that began in the 1980s and spread in the 1990s is over,” and that we now find ourselves illiberally bound to a global behemoth that is yet unnamed—or not named properly: “We have no idea how this system really works, or even what to call it.”

Andrew Bacevich—not one to take stability of any kind for granted—writes in a similar register. In his examination of Cold War American intellectuals Bacevich discovers an earlier version of the same analytic deficit Lilla points up, warning that these influential intellectuals, when “faced with a dire threat defined in oversimplified ideological terms,” broadcast “a faux ideological response.” Their tendency to miss the actual historical circumstances for the Big Idea proved costly: they helped leverage “a state-centered militarized version of liberalism.” The result? “Gaping inequality and a culture that has made gods of choice, consumption, and an absence of self-restraint”— a “shallow and insipid definition of freedom,” he none too delicately calls it.

Definitions of freedom may be hammered out in the intellectual sphere, but they begin as social practices in the realm of civil society—that pricey terrain that Lam, for instance, has his eyes on when he thinks hopefully about the prospect of serious, independent intellectuals in China. Even the Communist Party, in its own malign way, grasps this: it has “been reviving Confucianism with gusto,” writes Lam, “so as to fill the spiritual vacuum within citizens who have lost faith in socialism.”

Ahmad S. Moussalli (from the American University of Beirut) senses the same spiritual need in the Middle East. He criticizes “Arab renaissance intellectuals” whose embrace of a liberal, secular vision choked out “an intellectual Muslim modernist and reformist trend,” paving the way for “the authoritarian nationalist state.” Moussalli understands that public order—whether in liberal or authoritarian societies—is bound up in religious vision, ideals, and practices. Political wisdom requires an embrace of this inalienable human reality, however socially complicated such an embrace may be.

But the West has tried, of course, to lead the way in the other direction, a trajectory assessed with acuity by the political theorist Patrick Deneen, who turns our attention to the secularizing currents in the history of higher education. Earlier in our past, he writes, the task of the college teacher was to achieve “the integration of various forms of knowledge,” guided by a “theory of human flourishing” that imagined education’s end to be the cultivation of the “free citizen.” “The structure of the college,” he notes, “reflected the deeper commitment to a universum.”

Today, thanks to the internet, we may have enlarging “public intellectual” presence, but only—and not coincidentally—in the face of an absent public, a public that, having been educated in a fragmented disciplinary and social order, has given itself over to “jobs and private affairs”: Economics 101.

We citizens need a new core curriculum: that much this volume makes clear (even when it’s not trying to). And we need the active presence of that ancient Augustinian city, portending a new one. We need a civil society founded upon the bedrock of institutions that store up treasure capital cannot see. And we need teachers—intellectuals, if you will—who can help us to see and seize that treasure. Now.

Must-Read: Eric Miller: The Unnamed Behemoth: Review of “Public Intellectuals in the Global Arena”

Posted on by Brad DeLong

Must-Read: Eric Miller: The Unnamed Behemoth: Review of “Public Intellectuals in the Global Arena” http://amzn.to/2pSZyVd: “Deep learning eloquently brought to bear on the contemporary moment has, quite evidently, not been enough to shore up the aging foundations of our republic… https://www.commonwealmagazine.org/unnamed-behemoth

…If our grounding in tradition is gone, and if the enlightened replacement yet continues its deconstructing course, what have the intellectual avatars of the contemporary order to offer?  Economics, apparently. Desch names the discipline “the preeminent home of public intellectuals” in today’s academy; Mark Lilla drily notes that “Economics 101” is now “the world’s de facto core curriculum.” The economist J. Bradford DeLong agrees, announcing that “Economists are here to tell you what’s what and how to do it”—teachers in the authoritarian mold, it seems.

He follows this pronouncement with the observation that, given the triumph of global capital and subsequent failure of any other organizing principle, mere citizens have no choice but to “listen” to economists. “But you have nearly no ability to evaluate what you hear,” he warns. “When we don’t reach a near consensus, then heaven help you.” As DeLong goes to lengths to show, the country—the world—is in the hands of a field that is nowhere close to such consensus. Such news does not reassure the democratic soul. DeLong baldly states that “a market economy’s underlying calculus is a calculus of doing what wealth wants rather than what people need.” Several contributors are intent on finding a way to thwart that desire and explore alternatives…. is the liberal democratic tradition up to the challenge—the challenge of disciplining an economic order that exists not to prosper democracy but itself?…

Lilla in fact goes so far as to conjure the ghost of Marx…. “Acquiring some of Marx’s ambition simply to describe the reality of contemporary capitalism and its political repercussions would be a genuine advance.”… We now find ourselves illiberally bound to a global behemoth that is yet unnamed—or not named properly: “We have no idea how this system really works, or even what to call it.”… We need a civil society founded upon the bedrock of institutions that store up treasure capital cannot see. And we need teachers—intellectuals, if you will—who can help us to see and seize that treasure. Now.

Home is where the government subsidy is

Posted on by Emilie Openchowski
A for sale sign hangs in front of a home, in Milton, Massachusetts.

In a piece in The New York Times Magazine, Harvard University sociologist Matthew Desmond outlines how U.S. government policy toward housing has become a source of inequality rather than a force against it. Desmond highlights how the mortgage interest deduction has become a major source of inequity. The benefits of the program flow disportionately to those taxpayers near the the top of the income distribution, while those lower down the income ladder—whether homeowners or renters—don’t receive as much (if any) help.

A few figures in a blog post from the Tax Policy Center point out the upside-down nature of this tax policy. A family whose earnings put it anywhere between the 90th and 95th percentile of the income distribution gets a tax benefit that’s about 1.5 percent of its after-tax income. A family between the 40th and 60th percentiles gets around 0.3 percent. The benefit from the deduction ends up being five times larger for the higher-income family.

The inequity is even more pronounced, as Desmond points out that assistance for renters—who tend to be lower in the income distribution—is minimal compared to those who own homes.

Some policymakers or outside interest groups could perhaps make a partial defense of the mortgage interest deduction if it helped promote homeownership. But that’s not true. The deduction does little on the margin to increase the likelihood that an individual or a family will buy a house. Instead, research shows that the deduction gets people to buy a larger house once they do decide to buy. To put this effect in economics jargon, “the home mortgage interest deduction incentive works on the intensive, not the extensive, margin.” The incentive, then, is for households to increase the amount of mortgage debt they take on. The more debt they use to finance a home, the more of a tax break they will get.

As Derek Thompson points out at The Atlantic, the problems with the mortgage interest deduction are mirrored by other issues with the tax code. A number of deductions, including those for saving for retirement and for college tuition, are strongly tilted toward higher income households and are far from efficient. The mortgage interest deduction is simply one of the most egregious forms of an inequitable and inefficient policy approach.

Should-Read: Noah Smith: Vast Literatures as Mud Moats

Posted on by Brad DeLong

Should-Read: Noah Smith: Vast Literatures as Mud Moats: “My solution to this problem is what I call the Two Paper Rule… http://noahpinionblog.blogspot.com/2017/05/vast-literatures-as-mud-moats.html

…If you want me to read the vast literature, cite me two papers that are exemplars and paragons…. Foundational papers, key recent innovations…. Just two. I will read them.  If these two papers are full of mistakes and bad reasoning, I will feel free to skip the rest of the vast literature. Because if that’s the best you can do, I’ve seen enough.If these two papers… merely link to other papers, I will also feel free to skip the rest of the vast literature…. And if you can’t cite two papers… it means that the knowledge contained in that vast literature must be very diffuse and sparse. Which means it has a high likelihood of being a mud moat. The Two Paper Rule is therefore an effective counter to the mud moat defense…

Should-Read: Bob Davis: Why Trump’s Scorn for Pacific Trade Pact May Have Been Hasty

Posted on by Brad DeLong

Should-Read: Bob Davis: Why Trump’s Scorn for Pacific Trade Pact May Have Been Hasty: “On his first workday in the Oval Office, President Trump killed the Trans-Pacific Partnership. He will probably spend the rest of his term trying to revive parts of it… https://www.wsj.com/articles/why-trumps-scorn-for-pacific-trade-pact-may-have-been-hasty-1494763203

…The pact plowed new ground favorable to U.S. interests, going well beyond the tariff and subsidy cuts found in traditional trade deals. TPP would have given a boost to e-commerce by limiting restrictions on data flows and prohibiting any of the participating countries from requiring computer servers be located domestically… required state-owned enterprises to operate like commercial companies rather than political tools…. Intellectual property protection would have been strengthened and restrictions to competition in services reduced. These are all longstanding goals of the U.S., which is a leader in technology and finance and wants to beat back efforts to constrain U.S. cross-border dominance.

Because it included Canada and Mexico, it was in effect a backdoor renegotiation of the North American Free Trade Agreement, something the Trump administration is demanding. Second, although it didn’t include China, it would have cemented relations with other Asian nations and given the U.S. a stronger hand in dealing with Beijing…. Some Trump trade officials are starting to come to the same conclusion. “We should learn from, and build on earlier negotiated trade agreements,” said U.S. Trade Representative nominee Robert Lighthizer in mid-March confirmation proceedings. “In a renegotiation of Nafta, we should consider incorporating those provisions (in TPP) as well as improving areas where we may be able to go beyond TPP.” Two weeks later, the administration sent to Capitol Hill Nafta negotiating objectives which echoed TPP provisions on intellectual property, digital trade and services trade, state-owned enterprises and labor and environmental standards…

Climbing the career ladder, switching jobs, and the gender wage gap in the United States

Posted on by Nick Bunker

Want to earn more? That means you need to get a raise or promotion at your current job, or go out and find a new one with that same end in mind. But the extent to which worker’s wages in the United States increase from doing so is not equal, even for those with similar levels of education. Namely, women earn less than their male counterparts even at the beginning of their career, and that gap only widens over a lifetime.

But where is this gap coming from? Is it because men are more likely to get promoted or secure higher raises? Or do men go out and find new jobs at a higher rate, and secure better salaries when they do? New research by Erling Barth of Norway’s Institute for Social Research, Sari Pekkala Kerr of Wellesley College, and Claudia Olivetti of Boston College tries to unpack just where the gender wage gap is emerging. They find that there is no single answer, and that instead it depends on age, education, and marital status.

For workers with a college education, gender-based gaps in pay are primarily caused by disparities that emerge within a single workplace. In other words, men get raises and promotions at a significantly higher rate than their female colleagues do. Some of these results may be due to younger women having greater family responsibilities, which in turn may limit how much time or effort that can put into paid employment. Research demonstrates how working long hours—even without a proportional rise in actual output—can result in disproportionate economic rewards. Harvard University economist Claudia Goldin calls this “the last chapter” in attaining gender equality.

But other research shows that, even after accounting for experience and hours worked, women still face pay disparities compared to their male colleagues. Of course, pay secrecy policies common in many workplaces leave women in the dark about these salary differences, which makes it impossible for them to address any potential discrimination. A difference in men and women’s tendency to negotiate also doesn’t fully explain what’s going on. While women may be more reluctant to negotiate, that’s partly due to the fact that it doesn’t go as well for them when they do.

Barth, Kerr, and Olivetti find there is a smaller widening in pay over their lifetimes for men and women who are not college-educated—and this is not primarily driven by the disparities that emerge within a single workplace. Instead, the widening pay gap for non-college workers largely derives from differences between men and women in where they work and their “job mobility,” or how often workers change jobs, and the kinds of pay increases they get when they do.  If you leave one job to take a more-advanced position somewhere else, then that could result in higher earnings. Alternatively, if leaving one’s job is due to a layoff or for personal reasons (to raise children or take care of an elderly parent, for instance), then a worker’s earnings tend to go down.

The three researchers also find that job mobility and the subsequent differences in pay that arise are a factor in the widening gender gap for college-educated workers as well, but to a lesser extent. But, interestingly, the authors find that regardless of the education level, it is marital status, rather than gender, that is more of a defining factor in this realm. The researchers say that “these results suggest that among married couples, the household division of labor tend to limit women’s career choices with respect to job-to-job changes and this is an important determinant of the widening of the gender earnings gap, especially for college educated women who are more likely to be in occupations with steep age-earnings profiles.”

Whether the gender wage gap comes from climbing the career ladder at a single company, or the extent to which women benefit from switching jobs, one thing is clear: Both may require investments in time that go above and beyond what is necessary to do a good job. Of course, these are issues that affect all workers, but women still tend to take on a disproportionate amount of unpaid work compared to men, which means they are the ones more likely to cut back, especially given the absence of work-life policies that other countries have. Discrimination also plays a role, which speaks to the fact that there is no single answer or policy solution that can combat the many ways women are disadvantaged depending on their race, education level, marital status, age, and whether or not they have children.

Should-Read: Bill Janeway: Which Productivity Puzzle?

Posted on by Brad DeLong

Should-Read: Bill Janeway: Which Productivity Puzzle?: “It is now, just 50 years from the invention of the microprocessor, that the complex of digital technologies have matured… https://medium.com/@bjaneway/which-productivity-puzzle-ffe1d574ae96

…to the point that—from the point of view of the user—ICT has begun to disappear, as electricity did for our grandparents. And the combination of Open Source software tools and cloud computing resources means that the cost of experimentation for new web services has plummeted even as the extension of broadband internet expands the addressable market by orders of magnitude. Whatever its failures of corporate culture and leadership, Uber exemplifies the friction-less provision of services that only now can be imagined, developed and deployed at the frontier of the digital economy.

But note: the transformational economic impact of technology does not come as one uniform wavefront. In 1962, Everett Rogers analyzed the “diffusion of technologies” as a process that he mapped to the logistics curve that begins slowly, accelerates to a peak rate of growth and then slows down as the market space becomes saturated…

Must- and Should-Reads: May 15, 2017

Posted on by Brad DeLong

Interesting Reads:

Should-Read: Joseph Stiglitz: Illiberal Stagnation

Posted on by Brad DeLong

Should-Read: Joe Stiglitz attempts to diagnose the “Weimar Russia” that currently anxiously paces the global stage:

Joseph Stiglitz: Illiberal Stagnation: “What went wrong? Who, if anyone, is to blame?… https://www.project-syndicate.org/commentary/illiberal-stagnation-russia-transition-by-joseph-e–stiglitz-2017-04

…Could Russia’s post-communist transition have been managed better?… I believe what we are confronting is partly the legacy of the flawed Washington Consensus that shaped Russia’s transition. This framework’s influences was reflected in the tremendous emphasis reformers placed on privatization, no matter how it was done, with speed taking precedence over everything else, including creating the institutional infrastructure needed to make a market economy work…

Joe has long believed this. But I have never been able to see it. As I understand things, the moment that Yegor Gaidar and Boris Yeltsin decided that they needed to either (1) decontrol agricultural prices or (2) send the Red Army into the countryside to collect the harvest at gunpoint, the die was cast. They were not going to do (2): Lenin and Stalin had tried that, with very bad results. And once the die was cast, they needed to do two things at once, immediately:

  • Build the institutional infrastructure to make a market economy work, as Joe says.
  • Privatize Russian industry immediately in as distributed a fashion as possible, for otherwise the nomenklatura would tunnel all of the assets out of state-owned enterprises into their own newly-created shells and Russia would win up with an economy of Oligarchs.

Doing the first without doing the second would have landed us in something very like our current situation in terms of its disappointing aspects, and would have done so sooner…