April 5, 2013 5:59 pm

End of the US nursery rhyme economy

Set against the upheaval in the jobs market, ideological and ethnic shifts look minor
Job seekers stand in line to enter the City of Chicago job fair at Kennedy King College in Chicago, Illinois, U.S., on Friday, November 9 2012©Bloomberg

Even as western economies globalise, it can be a shock to discover how little resemblance the working world bears to the folkloric economy of children’s books and politicians’ rhetoric. These are not economies of butchers, bakers and candlestick-makers. The US has more graphic designers (191,000) than bakers (157,000), according to data released this week by the Bureau of Labor Statistics. I was taken aback to discover, during the 2008 presidential campaign, that the country also has more choreographers than metal casters. National politicians, though, almost always campaign as if “the economy” is something found only in factories and on farms. A president with a real interest in the economy would also visit some of the nation’s 202,000 sports coaches or its 80,000 substance-abuse counsellors.

The centre of the US economy has moved from shop floor to shopfront, then to shopping online. Many endeavours considered “employment” in the past couple of centuries have proved vulnerable to automation and computerisation. This year’s BLS data show that, since 2007, the US has gained 387,000 managerial positions and lost about 2m clerical ones. Perhaps the occupants of the former were consulted on how to fire the latter. It was once assumed that the skills-biased technological change that decimated factory work would never threaten jobs that required a human touch. How wrong that was. Automatic teller machines replaced bank staff years back.

Less than a year ago, too, scholars of higher education were marvelling at how rapidly online university courses had advanced. They seemed to work particularly well when students could be assured their professors would actually have time to mark them. Now EdX, the online learning company that draws on Harvard and other universities, has reportedly found a reliable way to grade written work by computer. Summly, the app teenager Nick D’Aloisio has just sold to Yahoo, shortens articles to Twitter length. It sounds suspiciously like something that might eventually replace an editor.

There are, it is true, jobs to replace those that computers have wiped out. The BLS now has categories for “wind turbine service technicians” and “solar photovoltaic installers”. This makes it sound as if economic growth is being driven by the green-energy subsidies in President Barack Obama’s 2009 stimulus plan. But there are two problems. First, these jobs are scarce. The US needs only about 4,710 photovoltaic installers.

Second, new-economy jobs pay less, in general, than the disappearing old-economy ones. The lowest- paid is food preparation. (People have been preparing food since the dawn of history, of course, but not by the millions.) Median household income has fallen 5.6 per cent since June 2009.

Since the last election, US thinkers on the left have been debating whether Democrats have somehow gained a permanent electoral advantage. Jonathan Chait of New York magazine sees demographic change and cultural shifts as wreaking a deep realignment. Fast-growing ethnic minorities overwhelmingly see the Democrats as “their” party; Democrats are exuberant over three referendum victories on gay marriage, after three dozen consecutive losses.

The great postwar historian Rick Perlstein warns Democrats not to count their chickens: conservatism could come back with a vengeance. Mr Perlstein looks to have the stronger argument. That is because these ethnic and ideological vote-casting factors look minor when set against the wholesale shift in the conditions of production that the BLS numbers show. They look minor compared to potential generational conflicts, too. Young people are being paid pennies to wrap the burritos and push the wheelchairs of well-off baby-boomers.

In general, Democrats are as disoriented as Republicans. Neither have a coherent approach to this problem of technologically driven downward mobility, aside from hoping it will turn out to be temporary. The whole context of doing politics has been ruptured. Republicans have been jilted by the college-educated upper-middle class. Like cuckolds, they are the last to know. The Republican party is now the party of the lower- middle class, but out of habit still campaigns to make life easier for the class it used to represent. It is the party of meter-readers made redundant by the “smart grid” the Obama administration is introducing, while Mr Obama’s Democrats have become the party of “solar photovoltaic installers”. It is, in short, the party of globalisation’s losers.

For that very reason, these changes could have a silver lining for Republicans. If they realise their base lies not in the upper-middle class but in the formerly upper-middle class, they could well find themselves representing the more numerous part of the country.

The writer is a senior editor at The Weekly Standard

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