
The good old days? In many ways, yes - howard941
https://www.minneapolisfed.org/publications/the-region/the-good-old-days-in-many-ways-yes
======
Animats
It just doesn't take that many people to do all the stuff.[1] The automation
revolution happened a long time ago.[2] Peak manufacturing employment was in
1979. Agriculture is down to 1.4%. Making stuff (mining, construction,
manufacturing, and agriculture) is at 14% and dropping. Those were the classic
blue-collar jobs. They're the ones where large numbers of people were employed
doing repetitive work under close supervision. Many of those jobs were
unionized and paid OK. Even for people with IQ below 100. Not any more.

For a while, "services" employed more people. Then came cheap computing and
the Internet. No more file clerks. Much less paper-pushing. Fewer retail
salespeople. Fewer bank tellers. Both retail and finance are dropping in
headcount.

That's what happened.

[1] [https://www.bls.gov/emp/tables/employment-by-major-
industry-...](https://www.bls.gov/emp/tables/employment-by-major-industry-
sector.htm) [2]
[https://fred.stlouisfed.org/series/MANEMP](https://fred.stlouisfed.org/series/MANEMP)

~~~
coldtea
> _It just doesn 't take that many people to do all the stuff._

That's impossible. A couples of times in the past when we evolved major new
technologies (e.g. industrial revolution) new jobs were created. This means
there will _always_ be new jobs, it's like a contract with history.

/s -- but also how many think, taking 2-3 historical cases as some kind of
necessary eternal motif.

~~~
WalterBright
An example of job creation due to automation is the huge increase in the
content creation industry. I don't recall the exact figures, but the rate of
movie/TV production has increased enormously since the 1970's.

Something I haven't seen written about is that it wasn't that long ago that if
you were middle class, you'd have a maid or other servants. I don't know
anyone who has a maid. Those jobs haven't been automated, either. There's
something else at work.

~~~
WillPostForFood
There was an article in The Atlantic a few years ago about the decline of
domestic help, but I think this old NY Times article captures the nuance of
the change better. In many ways there is still domestic help, but it is now
more outsourced, and on demand.

[https://www.nytimes.com/1995/08/27/weekinreview/the-
nation-t...](https://www.nytimes.com/1995/08/27/weekinreview/the-nation-the-
servant-class-is-at-the-counter.html)

[https://www.theatlantic.com/business/archive/2015/09/decline...](https://www.theatlantic.com/business/archive/2015/09/decline-
domestic-help-maid/406798/)

~~~
hellisothers
Solid articles, these could be reposted to HN and stand alone.

------
dhbradshaw
"Less-educated Americans born in the 1960s fare much worse than those born 20
years earlier"

One interesting thing worth watching for here is selection bias. If the
average education level increased during this 20 year period, then we aren't
comparing similar cohorts when we select for a particular level of education
at the two different times.

~~~
orangecat
Correct: [https://www.statista.com/statistics/184272/educational-
attai...](https://www.statista.com/statistics/184272/educational-attainment-
of-college-diploma-or-higher-by-gender/)

~~~
simonsarris
But graduation rates are meaningless because they are easily gamed. Compare
average SAT scores from 1970's to today and the trend is _downward_.

Graduation rates are easy to boost: Graduate bad, failing students. SAT scores
are not so hard to fake.

------
rcdmd
> In the abstract, you get this statement: "The drop in wages depressed the
> labor supply of men and increased that of women, especially in married
> couples."

Seems to get cause and effect backwards. Isn't it more likely that an increase
in labor supply (women entering the workforce) had, simply by the laws of
supply and demand, decreased wages?[1] [1]
[https://www.dol.gov/wb/stats/NEWSTATS/facts/women_lf.htm#one](https://www.dol.gov/wb/stats/NEWSTATS/facts/women_lf.htm#one)

The paper is full of complicated-looking economic models and nice graphs-- but
if you don't get the basic assumptions right it's hard to trust the fancy
models.

~~~
BurningFrog
These things are hard to think about.

A new worker (or 50 million new female workers) does on one end increase the
supply of labor, which should lower the price (wages) of it, but s/he also
starts spending an income, which increases general demand in the economy and
acts to push up wages.

It's not obvious what the net effect is. Economists probably have a (or
several :) well thought out and validated answers to this, but my gut feel is
that it all evens out.

~~~
gubbrora
I think it's necessary to look at it more in more detail. What did women stop
doing to make time for work? What products and services had higher demand and
which ones did not? In particular were they labor intensive goods or resource
intensive goods or even zero sum goods?

I don't have the answers to these questions unfortunately.

~~~
slv77
Elizabeth Warren did a lot of research on the topic before going into
politics. The bulk of the income went towards transportation, childcare,
housing and medical care.

------
ajmurmann
It has become impossible to me to read articles on this topic that don't make
clear if their "stagnant wages" are corrected for the health care benefits
eating up all potential increases for workers who are at the bottom end of the
compensation range. Ever since this effect was explained on econtalk
([https://www.econtalk.org/mark-warshawsky-on-compensation-
hea...](https://www.econtalk.org/mark-warshawsky-on-compensation-health-care-
costs-and-inequality/)) I'm convinced that the US health care system is the #1
problem that needs fixing.

~~~
dash2
From the abstract:

 _Welfare losses, measured as a one-time asset compensation, are 12.5%, 8%,
and 7.2% of the present discounted value of earnings for single men, couples,
and single women, respectively. Lower wages explain 47-58% of these losses,
shorter life expectancies 25-34%, and higher medical expenses account for the
rest._

~~~
ajmurmann
I'm still not clear if higher medical expenses refers to expenses that were
directly paid by the worker or also accounts for costs the employer paid as
part of the total compensation package but that never passed through the hands
of the worker.

------
malvosenior
The US emerged from World War II the global superpower while much of the rest
of the world was literally decimated and turned to ruins. We built an
incredible industrial and commercial base to support and profit from the war.
This overlapped with (and drove) major leaps forward in technology that the US
was uniquely positioned to take advantage of.

The "good old days" did exist but they were an extreme anomaly following the
largest war in human history. I think people have a hard time realizing this
because the mores and culture from that time period were encoded, broadcast
and digested by the rest of the world. We still live orbiting around 20th
century mass media cultural concepts.

~~~
deogeo
> We built an incredible industrial and commercial base to support and profit
> from the war.

Doesn't this conflict with the teachings of free trade? That other countries
growing their industries and rebuilding themselves left the US worse off (if
that is the reason)? If you buy that logic, then shouldn't you be very worried
about moving production abroad?

~~~
malvosenior
Yes, globalization would be one of the main reasons the "good old days" are no
longer achievable. Lifestyle is being globally normalized.

Note I keep putting "good" in quotes as a reference to the term. I'm not
making a value judgement.

~~~
Barrin92
globalisation isn't a zero sum game. Rise of industry in developing nations
didn't mean that some static output shifted around. Only a relatively small
percentage (about 15% or so according to most research) of job loss is
attributable to globalisation, and it isn't the jobs that were responsible for
the 'good old times', but rather the very worst, environmentally damaging
manufacturing.

Gains in productivity and corresponding automation account for the lion's
share of job loss.

[https://www.nytimes.com/2016/12/21/upshot/the-long-term-
jobs...](https://www.nytimes.com/2016/12/21/upshot/the-long-term-jobs-killer-
is-not-china-its-automation.html)

~~~
hopler
Globalization might be negative sum, when accounting for the lower marginal
utility of monetary wealth captured by a few super wealthy capital owners
instead of the masses of laborers

------
abhinai
_Deep welfare losses, along with effects on labor supply, health care
spending, and asset accumulation indicate that this large population segment
has not enjoyed the fruits of broad economic health._

It feels we need to do a better job quantifying this problem before we come up
with a solution. For example (1) how much money would it take to fix health
care? (2) how much money would it take to fix welfare? (3) what is the impact
of low savings rate on people's economic condition. For example appearance of
credit cards coincides with the timeline in this article (4) How has
immigration impacted unskilled workers? (5) Does UBI work? (6) How is Europe
doing it? (7) Is Europe really as successful at dealing with these issues as
everyone seems to claim?

~~~
leetcrew
regarding (7), I am very interested in reading a nonpartisan take on the
relationship between US defense spending and welfare spending in western
europe. if it weren't for the current defensive arrangement with the US, would
europe spend more on defense? if so, would it still spend the same on social
services? do we americans overestimate our contribution to the defensive
posture of the west?

~~~
orwin
I think until France 4+ subs with atomics missils onboard are found and
destroyed, EU is pretty safe from conquering even without the US.

~~~
DuskStar
Nukes only protect from catastrophe (if others think that your government is
sane) because they're essentially a "fuck you, we all lose" button. If you
reply to something with nukes, you get nuked too.

What this means in practice is that something like "Russia assassinated the
leaders of France + Germany and conquered Poland in the ensuing chaos" _isn 't
enough of a justification for France to use nukes_. That's because the payoff
matrix looks something like this:

    
    
              peace * conventional war * nuclear war
      France     10 *                5 * -10,000,000
      Russia      5 *               10 * -10,000,000
    

Sane governments don't choose to move their payoff from 5 to -10,000,000.

Now, there are exceptions here! One is insane government leaders. It takes a
special kind of person to light the world on fire because someone took their
toy, but... no one takes that guy's toy. And so since they can credibly rule
out column #2 above, they never leave column #1. The other exception then is
when a sane government credibly precommits to the use of nuclear weapons in
some situation. But it's rather hard for a liberal democracy to do this, and
if France said that they'd kill Russia with nukes (and thus indirectly
themselves, Poland, and everyone else) in response to Poland being invaded -
well, I don't think I'd believe in their ability to follow through.

------
CryptoPunk
I believe people in the earlier cohort were more likely to die as children as
child mortality was higher in the past. If so, that could apply a selection
bias to the age 66 and up subset of this cohort, since those who survive their
childhood could tend to have a natural proclivity to be healthier into old-age
than those who don't.

Moreover, people became more educated over that 20 year timespan, so comparing
people of equal absolute educational attainment across the two periods could
be a case of comparing a higher socioeconomic group to a lower one.

------
jnbiche
If they think it's gotten bad from the 1940 cohort to 1960, wait until they
look at the 1980 cohort. Anecdotally, among my friends and family without a
college degree, the situation is dire indeed.

------
lkrubner
This essay suggests that the peak years for the USA standard of living were in
the mid-20th Century, and those born before World War II saw the greatest
benefits.

There will eventually be political consequences for the erosion of the USA
standard of living. The Economist magazine had an article, which was discussed
here on Hacker News, with the title “The link between polygamy and war“ to
which I responded:

" _This suggests that political stability depends on young men being able to
pursue their romantic dreams. This would apply in any country, not just
African countries. In nations in the West, an important limiting factor is the
ability to get one’s own apartment. That is, the ratio of average male wage to
average rent. In the USA, the happiest year for this ratio was 1958, when
people were spending 22% of their income on rent, on average. Not by
coincidence, this was the peak year of the Baby Boom. In some sense, it was
the best year in history to be a young white male in the USA. It was the year
when it was easiest for an 18 year old male to get out of high school, get
their own apartment, marry their high school sweetheart, and start a family.
And of course, young people did this in huge numbers, which is why 1958
remains the peak year for teenage pregnancy in the USA._ "

More here:

[http://www.smashcompany.com/philosophy/do-men-become-
warlike...](http://www.smashcompany.com/philosophy/do-men-become-warlike-if-
they-do-not-have-women)

~~~
malvosenior
That would go along with the article from yesterday saying that fewer young
men in the US are having sex than ever before:

[https://news.ycombinator.com/item?id=19524642](https://news.ycombinator.com/item?id=19524642)

------
areoform
Most people look at economies as an extension of supply-demand curves in a
Newtonian-esque model where one ball hits the next, transfers momentum
(elastically or otherwise) and so forth. Everything is down to a great chain
of causality that creates a nexus of forces. Consequently, "fixing" things in
this model means more of Force X over Y. Or, applying Lever A to Spot Z to
induce Force P. The force or lever can be regulations, deregulation, taxation,
tax cuts, interest rate changes, jailing bankers... And people may come at it
from different ideologies, but the Newtonian mental model remains. Everyone
repeats ad infinitum if only we quantized and applied X or Y then clearly such
and such outcome will occur. And this technique very rarely works out.

It might help us stave off a great amount of unrest if we shift this frame of
reference. A new perspective and a new way of doing things where we view our
economies as ecosystems or networks might clarify why these changes are
occurring. For example, we can look at excessive economic inequality and
understand why it is bad by looking at natural ecosystems and how they are a
closed loop.

For e.g. Consumers are like plankton. They are the injection of biomass
(money) into the system that ensures money changes hands when they buy goods
and services. A single entity, no matter how rich, cannot provide equivalent
mass to the greater ecosystem than a large set of consumers. Or, in other
words, a billionaire requires only so many pairs of sunglasses and Netflix
subscriptions. Ergo, a broad base of wealth where people can afford the
products around them is essential for a capitalistic ecosystem to function, as
these plankton keep feeding entities higher up in the food chain through an
accumulation effect.

For whatever reason, just like we have decimated our natural environment, we
have also decimated our economic ecosystem. The number of entities with high
purchasing power is rapidly decreasing, and this signals a significant problem
for the future of the ecosystem. And it also suggests how automation can end
up eating itself economically unless we institute measures - artificial or
otherwise - that inject capital back into the building blocks of the economy.

I suspect that as computing gets better, we will eventually create models that
will make the current economic debates and models we have obsolete. Our
arguments over taxation, immigration, regulation, reform etc. will seem quite
quaint to people in the future if we manage to make this transition and if we
can help policymakers and thinking individuals see economies in real-time, and
simulate outcomes of individual, highly variable, irrational agents at
unprecedented scales.

But we're not there yet. But we could be. We can fix this. And we will. I am
sure of that because brilliant people are working on this problem and
eventually, we'll get it right.

I hold out hope for a better future no matter how bad this news gets and I
remember that we're in a state of flux and things always appear darker in
these times.

------
Mikeb85
But whenever people talk about the 'good old days' they're racist, right? /s

It amazes me how much people will vote against their own self-interest. Also,
something a lot of the SV and educated crowd don't understand, but immigration
disproportionately affects uneducated workers by dramatically increasing the
supply of labour with workers willing to work for low wages (they are
partaking in wage arbitrage vs. their home country). Lots of industries that
are dominated by immigrants and illegal migrants today used to offer far
better income and living conditions 2 generations ago.

If people truly cared about the plight of the uneducated working class,
there'd be taxes on wealth, incentives against rentiers, far higher minimum
wages (to discourage wage arbitrage by immigrants from poorer countries) and
maybe even basic income. Or a limit on the supply of labour (ie. slow down
immigration) and tariffs to combat outsourcing. The first is a better outcome
IMO, but the second is a perfectly rational reaction.

But hey, bringing up actual economic effects of social policy is racist and
bigoted, right? That's why the current bourgeoisie doesn't understand
movements like Brexit, populism, etc...

Edit - for the record, I like left-wing solutions better. I very much admire
and agree with economists like Piketty. But most left-wing parties in the west
have really dropped the ball. They're beholden to the same rich donors, and
gloss over economic policy by championing social justice instead.

Edit 2 - some back up for my assertions:
[https://www.nber.org/papers/w3761](https://www.nber.org/papers/w3761)

~~~
senthil_rajasek
"immigration disproportionately affects uneducated workers by dramatically
increasing the supply of labour"

Can you back these arguments with some evidence? Otherwise they are just empty
claims.

~~~
sonnyblarney
"Otherwise they are just empty claims."

No, it's basic economics actually.

All other things equal, if you increase the supply of labour, you're going to
see lower prices.

Of course, the economy is not 'all things equal' i.e. more bodies means more
consumers etc. but the logic is fairly sound.

In Northern Alberta, for the Oil sands, the lingo they use to push for more
migrants is 'labour input costs': "We're seeing risks due to labour input
costs" etc.. It's a slightly extreme case given the isolation up there but
it's real.

So in the 'long run' things might work better out but the short run economics
are pretty straightforward.

~~~
senthil_rajasek
How are we accommodating growth of the economy in this argument? Or even
growth in a particular industry with a high demand for labor?

~~~
sonnyblarney
That's 'long run' economics. So yes, as soon as you get outside the short run
it gets hard to calculate.

But it's really hard to argue in any circumstance that 'more workers = higher
wages' because wages will be a function of available labour.

The 'rub' in the data really is the fact it doesn't take into consideration
the black market. Wages paid under the table are 100% part of the real
economy, and those are wages, but they generally don't go into the equations.

Imagine if the 'average us wage' were calculated with a few million extra
people earning below minimum and with zero benefits?

When there is full employment though, and not tons of undocumented workers,
one could argue that economic expansion could pick up the slack, surely.

------
RickJWagner
I'm suspicious. When I see a large chart titled "Life expectancy at age 66" it
sets off all kinds of alarm bells.

Why 66? Why not 50 or 60 or 70? What was special about 66 that it was chosen,
and why wasn't it explained?

~~~
obrisintor
Similarly, mass shootings per year compared by country where mass shooting is
defined as 4 people getting shot.

