The setback has cost the less advantaged not only a loss of income but also a loss of what economists call inclusion—access to jobs offering work and pay that provide self-respect.
.. Our prevailing political economy is blind to the very concept of inclusion; it does not map out any remedy for the deficiency. A monograph of mine and a conference volume I edited are among the few book-length studies of ways to remedy failure to include people generally in an economy in which they will have satisfying work.3
.. But the truth is that no degree of Rawlsian action to pull up low-end wages and employment—or remove unfair advantages—could have spared the less advantaged from a major loss of inclusion since Rawls’s time. The forces of productivity slowdown and globalization have been too strong.
.. The good life as it is popularly conceived typically involves acquiring mastery in one’s work, thus gaining for oneself better terms—or means to rewards, whether material, like wealth, or nonmaterial—an experience we may call “prospering.” As humanists and philosophers have conceived it, the good life involves using one’s imagination, exercising one’s creativity, taking fascinating journeys into the unknown, and acting on the world—an experience I call “flourishing.”
.. What were the origins of this dynamism? It sprang from the development of a favorable culture. In nineteenth-century Britain and America, and later Germany and France, a culture of exploration, experimentation, and ultimately innovation grew out of the individualism of the Renaissance, the vitalism of the Baroque era, and the expressionism of the Romantic period.
.. The cost is that elements of the Western economies are becoming products of this basically classical economics, which has little place for creativity and imagination.
.. The plausible explanation of the syndrome in America—the productivity slowdown and the decline of job satisfaction, among other things—is a critical loss of indigenous innovation in the established industries like traditional manufacturing and services that was not nearly offset by the innovation that flowered in a few new industries—digital, media, and financial.
.. Taking concrete actions will not help much without fresh thinking: people must first grasp that standard economics is not a guide to flourishing—it is a tool only for efficiency. Widespread flourishing in a nation requires an economy energized by its own homegrown innovation from the grassroots on up.
.. It will also be essential that high schools and colleges expose students to the human values expressed in the masterpieces of Western literature, so that young people will want to seek economies offering imaginative and creative careers. Education systems must put students in touch with the humanities in order to fuel the human desire to conceive the new and perchance to achieve innovations.
The productivity puzzle
American workers’ output per hour is 9% higher than in 2007; even in France it has increased by more than 2%.
.. Lift the bonnet of the economy and it emerges that the fastest-improving part is the transport-manufacturing industry. The 345,000 workers making cars, planes and trains produce 56% more in an hour than they did in 2009.
The Real Story of the American Family
Richly researched and compellingly argued, these books show how, in just a few decades, falling wages and increasing job insecurity overturned the family patterns of the archetypical representatives of “traditional family values”—people without any “legacy of slavery” or generational history of family instability. In doing so, the authors demonstrate that current trends in marriage and unwed childbearing are more consequence than cause of America’s increasing economic insecurity and inequality.
.. The postwar white working-class male-breadwinner family was a historical aberration, but it was accompanied by such an improvement in living standards that it’s small wonder it has become the subject of nostalgia. Never before had so many men with a high school education or less been able to get jobs that paid significantly more than their fathers had earned at the same age and that allowed them to comfortably support a family on their earnings alone.
.. During the 1960s, African Americans gained more access to manufacturing jobs, becoming even more dependent than whites on industrial employment for economic security. As a result, deindustrialization in the 1970s was especially devastating to blue-collar African American families.
.. Real-life experiences, not abstract preaching, imbued him with the sense that deferring gratification and sticking it out would end up paying off.
.. He offers a withering critique of Charles Murray’s claim that men have lost the work ethic of the traditional laboring class. Rather, he argues, “the defining problem of high-school educated young adults is that they cannot become working-class.”
.. But now that a woman has at least some earnings potential, it makes less sense to hitch herself to a man who might lose his job, leaving her with one more mouth to feed.
.. Overall, among single adults ages 25 to 34, according to a Pew Research Report released last October, there are only 84 currently employed single men for every 100 single women, and only 51 currently employed single black men for every 100 single black women.
.. Other things being equal, low-income men are not more likely to abuse their wives than high-income men. But when a man has low earnings or no earnings andadheres to traditional gender ideologies, he is especially likely to do so.
Report on the Economic Well-Being of U.S. Households in 2014
Although the survey finds that economic hardships are common, many individuals are ill-prepared for a financial disruption and would struggle to cover emergency expenses.
- Forty-seven percent of respondents say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money.
- Thirty-one percent of respondents report going without some form of medical care in the 12 months before the survey because they could not afford it.
.. Many individuals report that they are not planning for retirement and not saving for retirement. Additionally, even among those who are saving, respondents indicate that they lack confidence in their ability to manage their retirement investments.
- Thirty-nine percent of non-retirees have given little or no thought to financial planning for retirement and 31 percent have no retirement savings or pension.
- Over one-half of non-retirees with self-directed retirement accounts are either “not confident” or only “slightly confident” in their ability to make the right investment decisions when investing the money in these accounts.
.. Among respondents with a household income under $40,000, 45 percent report that they had gone without some form of medical treatment in the preceding 12 months. This fraction is 31 percent among respondents with incomes between $40,000 and $100,000, and just 16 percent among respondents making over $100,000.
.. The extent to which individuals have planned for retirement appears to be closely related to their income (table 17). Of those with a six-figure income, for instance, 21 percent report that they have given financial planning for retirement “a lot” of thought, roughly double the rate for those making under $40,000.
.. Fifty-five percent of those with a household income less than $40,000 per year (who are not retired and not out of the labor market due to a disability) indicate that they either plan to keep working as long as possible or do not plan to retire.
.. When asked what types of retirement savings or pension they have, 31 percent of non-retired respondents report that they have no retirement savings or pension whatsoever