Nostalgia is a wonderful thing; it allows
us to look back fondly at times in our lives which were often difficult and
unrewarding.
It can produce joy in the present moment and assist us in feeling optimistic
about the future. I assume that it evolved in us as some sort of defense
against suicide or despair; people who felt nostalgia were less likely to just
walk into the ocean and not come back.
Of course, nostalgia can also be harmful. It can cause us
to hold onto people, possessions, and situations which would be better left
behind. Worse yet, it can cause us
to drastically misinterpret the past, which in turn causes us to make mistakes
in the present day. Such is the case with business-book-huckster Eric
Chester’s lament regarding the elimination of teenaged
paperboys and other forms of youth labor. Chester notes with disdain that
today’s paper is “will be thrown from the window of a hail-damaged 2006 Saturn
Ion by a 30-something woman, and it will land at the edge of the curb at least
35 yards from my front porch.” Things were different when Eric Chester
delivered the newspaper in 1970, yesireebob.
To his credit, Chester doesn’t necessarily
blame the Millennials for not having been paperboys, which is very generous of
him. He’s identified another enemy — and since he’s a Baby Boomer, you can
probably guess what it is.
Like so many jobs of the
20th century, the job of paperboy has been eliminated, and with it, the work
ethic of generations past.
.
Teen employment in virtually every industry has dropped dramatically over the
past 20 years.
.
And yet, when young people take their first job – or enter their first career
position, employers expect them to not only have the required technical skills,
they expect them to already know how to work. And regardless of what they’ve
learned in a classroom, the vast majority simply don’t.
All of this
is true. Wonder why that is?
The job(s) that would have
given them those skills have been eliminated, given to a more experienced worker
who is worth the $15 per hour the government has mandated, and/or handed over
to a robot.
The fellow
who sent this article to me noticed this comment and pointed out that many
states and municipalities are raising their minimum wages. Could this be the reason?
Is the minimum wage now so high that it puts adults into the jobs that kids
used to do?
Before we get to that, I
want to address Chester’s story. I, too, was a paperboy as a kid, first for the
Columbus Citizen-Journaland then for the
Suburban News Publications. Those newspapers relied on an army of grossly
underpaid kids who were indirectly subsidized in many ways by parents who paid
for bikes, helped their children in the winter, and delivered the papers
themselves when the kids had chicken pox. I doubt that Chester actually
delivered the 158 newspapers by himself every single day of the week, rain or
shine, without fail. I bet his parents recall his job quite differently.
My mom stayed at home when I was a kid.
Chester’s mom probably stayed at home, too. Those stay-at-home moms served as
the glue to hold communities together. They cleaned their own homes, helped
their kids, and served as an informal network through which social connections
were made, careers were determined, and emergencies were solved. We don’t live like that now.
We decided, as a society, to more or less double the size of our workforce by
making women get involved. But we didn’t double the amount of available work.
So everybody was paid less. This gradual evisceration of the middle-class wage
went unnoticed because you couldn’t see it happen from day to day — but it
happened.
At the age
of 38, my father was basically where I am at forty-eight, career-wise. He drove a new Town Car
and put two kids through private school. He had a much more valuable home than
I do — about twice as valuable in today’s market. And my mom stayed at home.
It’s true that Dad was frugal in ways that I am not; they didn’t have
carbon-fiber mountain bikes or Paul Reed Smith guitars back then. But there is
no level of frugality that would allow me to live the way he lived at the time.
I’d need to earn four hundred grand a year, and we’d feel pinched still.
Oh, and
he was also setting himself up to retire to a plantation in South Carolina.
Today’s kids don’t have moms to help them
do the paper route. Their moms are out there trying to have careers of their
own. So the kids go to school and then to aftercare. We used to call that being
a “latchkey kid”. Nowadays it’s rare for a child to go home after school until he’s
old enough to be at home by himself. Given how our society winks at violent
pedophilia nowadays, I’d define that age as sixteen for boys and 42 for girls.
If Eric Chester were thirteen in 2020 instead of 1970, he’d be eating a
pre-packaged snack while waiting for a schoolbus instead of delivering papers
and then returning home for a hot breakfast, because his mom would be busy
making PowerPoints for a living and Amazon shopping on her company laptop while
planning her next business trip to see her excitingly demanding boss.
There’s
also the fact that you could ride a bicycle around an 85-paper territory in
about 45 minutes back in 1970 when everyone took a paper. I used to walk mine
and it rarely took more than an hour. Today, with maybe one in ten or twenty
households taking a paper, you need a Saturn with hail damage to make it work
time-wise.
You get the idea. We
won’t have paperboys until we restore the America which needed them: a country
where people were literate, interested in the news, and willing to pay
for en
masse,
while also making sure we had moms at home to look after the paperboys. What
about the rest of Chester’s assertion? Are teenagers no longer working because
the minimum wage is high enough to attract “experienced workers”?
This chart answers that
question. The minimum wage, in real dollars, hasn’t been this low in the
Boomers’ lifetimes. It was half again as much back when Chester&Company were
working their summer jobs. But I think that the real story is even more
frightening, because that light blue line which shows “productivity” is really
a measure of what people are paying for fixed assets now. The minimum wage was $3.35
when I worked at Rax as a 15-year-old; it’s $7.25 now. I lived with my mom in a
townhome which now rents for almost four times what she paid; two years prior,
she had sold our house for — wait for it — one-ninth of its current
price. She’d just bought a new Honda Civic S for $6,495; that’s a $26,000 Civic
Si today. So the minimum wage
would really need to be ten or eleven bucks just to keep pace with that — and
that’s before you consider the fact that certain costs, like healthcare and
education, have done far more than triple in the thirty-three years since then.
I could have gone to Ohio State for $380 a quarter; that would be $2,810 now.
I can make a pretty strong argument that
the “Fight For $15” minimum wage doesn’t buy what my Rax wage of $3.35 used to
buy. And yet Eric Chester is right: even at $7.25 an hour, you can find plenty
of full-time adults to do the work that used to be done by kids and part-time
workers. What happened?
You know what happened. The “Greatest
Generation” decided in 1965 to open the floodgates for immigration. Their
Boomer successors voted again and again to remove even the most nominal of
limits to incoming labor. We’ve had more than thirty million new legal
immigrants since the turn of the century, which sounds insane but is, in fact,
the case. There are about 45 million legal immigrants and another 11 million
“undocumented” immigrants in this country.
Adding 56 million people to
the American economy, more than half of which are considered “low-skilled”
workers, did exactly what you’d expect to wages. We are
told that “the economy benefits” from this additional labor, which is a nice
way of saying that the stock market benefits. What happened to human beings? Read for yourself:
·
Real wages rose at the top of the distribution, whereas wages
stagnated or fell at the middle and bottom. Real (inflation-adjusted) wages at
the 90thpercentile increased over 1979 to 2018 for the workforce as a whole and
across sex, race, and Hispanic ethnicity. However, at the 90th percentile, wage
growth was much higher for white worker sand lower for black and Hispanic
workers. By contrast, middle (50thpercentile) and bottom (10thpercentile) wages
grew to a lesser degree (e.g., women) or declined in real terms (e.g.,men).
·
The gender wage gap narrowed, but other gaps did not.From 1979
to 2018, the gap between the women’s median wage and men’s median wage became
smaller. Gaps expanded between the median wages for black and white workers and
for Hispanic and non-Hispanic workers over the same period.
·
Real wages fell for workers with lower levels of educational
attainment and rose for highly educated workers.Wages for workers with a high
school diploma or less education declined in real terms at the top, middle, and
bottom of the wage distribution, whereas wages rose for workers with at least a
college degree. The wage value of a college degree (relative to a high school
education) increased markedly over 1979-2000. The college wage premium has
leveled since that time, but it remains high.High-wage workers, as a group,
benefited more from the increased payoff to a college degree because they are
the best educated and had the highest gains in educational attainment over the
1979 to 2018 period.
Let me put this in unkind but forthright terms: In the post-1965 America, the harder you work the less you’ll be paid,
and the more your wages will sink over time. And
I should remind the reader that these “real” wages are adjusted to CPI, which
is great if you’re shopping for a hamburger but absolutely useless if you’d
like to own a home, get a college degree, or enjoy some life-saving medical
treatment. Even the “high-wage” workers who saw pay increases on paper aren’t
necessarily seeing an increase in their standard of living. This is true in
Ohio, where homes in nice neighborhoods are only priced at ten times what they
were forty years ago. Imagine how true it is on the coasts. Remember The Brady Bunch? Six kids, a
stay-at-home mom, and full-time help. Dad was an architect. Glassdoor says that a top-rate architect in
California can earn $150,000 a year, which is about $8,000 a month after taxes
in California. Living in that neighborhood now would cost you a minimum of $1.6
million dollars, so that’s about $12k a month in principal and interest. If you
really wanted the Brady Bunch lifestyle now, with six kids in school, two cars,
and a maid, you’d have to
a) earn
$750,000 a year;
b) forget about taking vacations or buying new clothes for anyone but Marcia.
“Okay, Jack, I get it,”
you’re saying. “Everything sucks now. But surely things got better for some people?” Well, yes. Take a
look at Eric Chester. He was thirty years old in 1987. Let’s say he bought an
index fund. It’s worth ten times what it was then. Let’s say he bought real
estate in Ohio. It’s worth as much as ten times what he paid. If he bought real
estate in Calfornia — or Denver, where he lives — perhaps it’s worth twenty
times what it was then. Every single economic policy
change since about 1990 has had two primary effects:
a) lowered real wages through increased labor market
participation and/or lowered demand for labor;
b) increased the value of fixed assets or investment instruments
In other words, if you were
“holding” in 1987, when the oldest Boomers were forty and the youngest were
twenty-five, you’re golden now. If you were just starting
your career in 1987, you were racing against time. If you’re starting today, the deck has been stacked against you
higher than you’ll ever clear. Want to live the middle-class life of 1975?
Better hope your IPO nets you ten million bucks. The wealthiest of the Baby
Boomers deliberately created a world in which they’d pay less for the things
they wanted (employees, labor, televisions) while being paid more for the
things they owned (real estate, index funds, 1959 Les Pauls, 1985 Porsche
911s). It was a hell of a trick, wasn’t it?
Eric
Chester looks at the hellscape generated by his generation and what he sees is
that there aren’t any more paperboys. I look at it and I have serious concerns.
I note that support for explicitly socialist government is growing by leaps and
bounds. Some of my friends think this is because the Millennials are stupid.
“Don’t they know that they won’t be the people who benefit from a communist
government?” This is what I think the proto-socialists have figured out:
* In the event of a Red Revolution in this country, they
have a very slim chance of becoming part of the nomenklatura who have power, real
estate, and freedom to determine their own lives.
* If there
is no Red Revolution, they have precisely zero chance of ever owning a home,
saving for retirement, or starting a traditional family.
This is where the
situation in our country becomes dangerous. As long as there is some chance of
succeeding in the current state of affairs, people will generally play along.
If you take away all of their hope, they have nothing to lose. Talk about bread
lines and mending old clothes doesn’t frighten people who have already
internalized the fact that they will be earning close to starvation wages for
their entire lives. This is particularly true if they have no children who
would be at risk. It’s a roll of the dice for them and things can only come up
better.
Very few people in my
generation grew up screaming “EAT THE RICH” and stuff like that. We figured we
had a chance to be the rich, even if things might not be as easy for us as
they’d been for our parents. The twenty-five-year-olds of today no longer think
they have any chance — and they live in an echo chamber of $25-per-article
bloggers who screech night and day about the potential benefits of violent
economic redistribution.
Now here’s the good news: This
situation could right itself. Within twenty years, there will be a massive
redistribution of wealth in this country through the simple mechanism of
probate courts and inheritance. The price of many things will go down, from
1959 Les Pauls to warehouse space. I suspect a lot of Millennials will leave
their microliving apartments and head back to suburban enclaves made affordable
by the death of their existing occupants and the unwillingness of various
inheritors to live in Florida or Phoenix. The stocks will be given to people
who would rather sell than hold.
We might also see some societal changes as a result of
today’s coronavirus and its many pandemic successors to come. Tommy Friedman’s flat
world doesn’t look so attractive when the container ships can’t enter port and
every Eat, Pray, Love trip is a chance to wind up isolated on a Navy base for a
year. We’re going to have to start making things again. And we might find that
we no longer need to own or consume as much as we thought. When most of the
available jobs are in manufacturing and not in the creation of PowerPoints,
perhaps some people will decide that staying home is a better alternative.
Which means they’ll have time for children, and cheap homes in which to raise
them. Those new parents will want something to read, and someone to deliver it.
In other words: Ask not for whom the paperboy throws; he might be throwing
for you.
