Sunday, January 19, 2014

Inequality is more 'American' than '[insert food item here]'.....

Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.


Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.

Inequality is the 'new' buzzword for journalists and academics. Is inequality really new for America? I argue no, not at all... For most of American history, inequality has soared. Often the pernicious effects of inequality have been obfuscated by race.

Alexis de Tocqueville and others forwarded the argument that American was a more equal society than Europe. One of his famous quotes, "Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom." (The craziness of the quote is priceless.) De Tocqueville failed to understand the social structure of the time and helped to obfuscated our understanding of American inequality in the late 1700s.

Once the Native, African-American and Hispanic experiences were included -  inequality in American was comparable or worse to many other places in the world. Note, American, today would also be a much more equal society if we just included the experiences of white Americans.

During slavery, America was unequal. The majority of whites in the South were poor yeoman farmers. African Americans (except free peoples of color) faced the cold, hard reality of slavery. Through, Reconstruction, Gilded Age (late 1880s) and the roaring 20s, America was also UNEQUAL. The Gilded Age saw the construction of beautiful houses for the Carnegies, Rockefellers, but the average American faced poverty. Inequality was the norm in 1880s and politics were a pastime of the wealthy. Government offered workers almost no protections from hazardous work environments and consumers had little protection from hazardous products. Inequality continued into the 1920s.

What changed? The social reforms that occurred during the 20s and 30s (particularly during the Depression) and the post WWII boom lead to the growth of the American middle class from the 1950s to the 1970s. 

This period was extraordinary in American history. The 1950s also lead to the greatest expansion of industry, the academy, media and technology in American history.  Norms like the nuclear family which originated in the 1950s still color the mythos of what it means to be American. Why is this period so immortalized? If anything it was an extraordinary time where a number of factors came together serendipitously to produce a surprisingly equal America. Some of these factors include: the crumbling of Europe allowed America to dominate globally, a growing population, rising levels of education and business interests largely out of politics (See Mayhew 1977).

Since the 1970s,wages of the middle class have stagnated and the majority of all gains to the economy have almost exclusively gone to the top 10% and even more exclusively the top 1%.  We are just drifting back to the norm of American inequality. Why should we be surprised - this is the America of our forefathers.

Only extraordinary events of the Depression and WWII and their consequences lead us to the most equal time in American history.

Inequality is unlikely to decline anytime soon. I foresee no extraordinary events like those of the 1930s-1950s..America has lost it's industrial monopoly - we slowly moving toward a multipolar world, population is aging and declining and big business largely controls politics.  I predict it will take 10 to 20 years to really see any minor changes to level of inequality in the US. The growing diversity is likely to allow inequality to burgeon and fester long into the future.

 Is this too pessimistic of a view? Well, I hope I'm wrong.

Sunday, January 12, 2014

First-Mover Advantage

Being in the South Bay, it is hard not to notice the advantage to being a first-mover. It hovers in the air. I feel it on my back and it meanders into my thoughts constantly. The internet companies whose tree-lined campuses fill Silicon Valley where first-movers, Ebay, Amazon, Google. They found the low lying fruit of a new industry and snatched it right up. Not that this is necessarily easy. I'm sure that they faced a whole swath of difficulties such as their ideas were too novel, too high risk if the internet did not take off, and a heightened resistance from the established industries and investors. Still, I'm a little jealous. Being a tech entrepreneur today is quite a bit harder, most of the low-lying fruit is gone and the risk is still high. It makes me wonder what are the key new industries today? How does one find them?

Do only some generations get the watershed moments in technology? Every generation should crave a watershed moment. It is an awesome opportunity to affect the technology itself and society. Think of the model T, airplanes and television. Technology has a trajectory determined by those at the forefront and a cultural stamp of the people of that generation. What if different technologies were developed at different points in history, how would it have changed the technology itself? If the internet was developed in the 1950s, how different would it be, would the greatest generation have developed very different types of services or websites? Would internet porn have been banned? Would it not be as popular?

When looking back on history, it is easy to find those watershed moments, but how does one find them in today's world? Is it merely luck, passion or the correct alignment of the stars that leads you to those key places. How do you feel if you are part of those watersheds? It seems like historically one would never know if they were part of a key breakthrough in science, art or society, but today society seems to accept change at a faster pace. Those at the forefront seem to know it and embrace it. Are you at the forefront of some type of watershed technological or societal change? Describe.


The Greatness of Youth....

Young people of all countries, unite! Well, perhaps not so much. For millennials (including myself), economic times are TOUGH and sometimes I wonder whether it is us to blame or the broader structural factors. Is it because we expected a career path that resembled our parents? Are we wrong to think that the most prosperous period of American history would repeat itself?

I, for one, always thought finding a fulfilling career would somehow magically appear after I finished college. Looking back, this was an utterly na├»ve view. I wonder if I had thought more about the difficulties of getting a job after college in high school, whether I would have pursued a different path (gotten a more technical degree).

I don't think millenials are totally off the hook for their difficulties, but I would like to explore the structural piece in more detail (after all this blog is about demography). A large portion of finding a job is structural. Structural factors include the following: we graduated in a recession, the economy has fundamentally changed, workers are much less valued, inequality has risen, consumer spending has fallen, academia is out of touch and OUR GENERATIONS IS HUGE!

Yes, I agree some part of the jobs crisis in our generation is caused by the recession and other structural factors, but another contributing factor that has been overlooked is the UTTER size of our generation. Positions in school, work, government and other institutions are finite. There was a finite number of spots on our high school soccer team, a finite number of seats at Harvard and a finite number of jobs at Goldman Sachs/Walmart/Google. Our generation is the largest generation in American history, bigger than the Baby Boomers. To me, one of the simple reasons it seems that we are having a hard time is because the job market, was and still is, unable to adapt to handle the sheer size of our generation.

But, what does this mean for us millennials. Well, I think the future will look like this - we will be better educated than younger generations that follow us (we're already more educated than older generations), we'll get better objective test scores and we'll have more credentials, but we will still be stuck in worse jobs, get lower income throughout our lives, and have fewer promotions than our counterparts in other generations.

The reason why is somewhat straightforward. Simple supply and demand. A finite number of jobs and more demand for those jobs leads to more competition for everyone and lower wages for the lucky ones who get jobs. A large generation does not have to be a bad thing. If the government planned and facilitated greater job growth to meet the demands of a large generation, it could be a tremendous driver of economic growth to pull us out of this recession. Maybe leading to an even more prosperous period of American history.

The greatest benefit of a large generation is political clout, let's wake up and exercise it!


Demography, Demography....Why is it so fascinating?

Truth is...Any given society and it's social fabric is absolutely fascinating, especially how it changes and under what conditions. Demography, which is the study of death, babies and movement, helps us think about long run aggregate trends in the social sphere and how they map to future outcomes. There are a few questions that I find absolutely fascinating related to demography that I will write about in-depth. I would also love to hear your thoughts on these questions as well.

1) Inter-Generational Conflict in the US: The
young and old both crave state resources and historically resources have been taken from the young and redistributed to the old in the US. Will this continue into the future? Will there be a millennial versus boomer fight over Social Security and Medicare?

2) Race and Ethnicity in the US:  As a millennial is it obvious how diverse our generation is compared to the older generations. How does a society long divided by the socially constructed idea of race deal with rising number of multiracial individuals and growing populations of immigrants from around the world? Will skin color be the marker of status in American in 30 years, instead of race?

3) Childlessness among the millennial generation: I predict around 1 in 3 millennial women will be
childless. Right now among women 40-45, 19% are childless in the US. I think that will rise to around 33% for a whole host of reasons: delayed marriage and childbearing, economic cost of children, high unemployment and unemployment uncertainty, rising rates of infertility, no sense of urgency in our generation to actually have children and much less stigmatism for women who decide not to have children. Demographers assume the recent fall in fertility rates is due to the recession, which a degree of it probably is, but more so it is due to millennial patterns of household formation(Of course, I say this as a millennial myself.).

4) Fertility/Migration changes around the world: As every region moves to replacement rate, the rate at which population does not grow or 2.1 children per women, how does this affect global geo-politics. The only region that will continue to grow by 2050 is Sub-Saharan Africa. Will there by large scale migration from Sub-Saharan Africa to North Africa, Europe, North America and Asia to take care of aging populations?

What are your initial thoughts?