“The days when domestic manufacturing anchored an emerging urban working class and provided a ladder into the middle class are as dead as the days when family farms gave the majority of the American people secure livelihoods.”
I believe you are sadly mistaken about this. If we took measures to restore our balance of trade with China — with tariffs — and to reduce the standard work week (with new wage-and-hour laws) the number of manufacturing jobs in our society could double.
I would also call your attention to these interesting remarks from a conservative homemaker, making a point I had not heard before:
“I wish I could share your optimism that renewed respect for motherhood and the traditional family would be enough to change things. Unfortunately, jobs and professional opportunities are finite resources. This is one factor permanently left out of the feminist equation. The other factor is simple economics: The more the labor supply grows the more wages go down. In the 1960s the family wage was paid by 65 percent of all employers and more than 80 percent of all industrial employers. [See Brian Robertson’s excellent book Forced Labor.] This was not the result of luck or happenstance but a great social achievement that reflected, as Robertson notes, both conscious and unconscious social policies. Among those policies was the widely accepted notion that men should be favored in hiring, paricularly in hiring for jobs that can support a family. The standard of living of the traditional family (male breadwinner and female homemaker) has fallen precipitously since then. While two out of three families fit the traditional pattern in 1950, about one in six do today. Dual-income families without children are greater in number than traditional families with children. One reason for this is economics. Allan Carlson has calculated a means of measuring the prevalence of the family wage with something he calls the “family wage ratio.” It involves dividing the median family income of familes with working wives by the median income of those with wives who are not working. A family wage economy would be at 1.0 and a society of sex equality would be at 2.0. According to Roberston, from 1959 to 1961, the ratio was at about 1.25. By 2002, it was at 1.75.
I am advocating the removal of laws banning discrimination on the basis of sex and renewed respect for the economic burden of men. Sex discrimination laws are in effect an indirect form of discrimination aganst traditional families. Once a certain percentage of women enter the market, prices rise and the pressure on others to follow increases. This is what Roberston calls “forced labor.” Surveys showing that many women who work would rather not work confirm this observation.”
“Ending free trade will wreck our economy and the world economy.” Not at all if done gradually and responsibly. China is big enough to develop her own internal markets.
Meanwhile look how much more sophisticated and grounded in reality was the discussion of these issues in Congress a hundred years ago:
“BALANCE OF TRADE. The next result of our tariff legislation, which the entire Republican party are agreed upon endeavoring to attain, is such a check of foreign importation, or such increase of our exports, or both, that the balance of trade shall at least not be materially against us. That the matter of the balance of trade is to every nation absolutely vital, and involves ruin on one hand and prosperity, endurance, and power on the other, is completely self-evident. That in so far as this matter of the balance of trade depends on the legislation of a country, that legislation is suicide if it fuils to aim at protecting against annual balances of debt is equally self-evident.
VARIED AND INCREASED AMERICAN INDUSTRIES. Owing partly to the fearful wastes of the war, partly to the startling admonitions the war gave us of the danger of being dependent on other nations for any of the great supplies of war, partly to the burdens of debt the war has left, partly to the promptings of huge balances against us iu trade, partly to the unsatisfactory state of a few of our industries, as for example our shipping interests, but mainly to the increasing wants of the people and their increasing intelligence as to the possibilities and resources of this great nation, there never was before a time when the people so realized the commanding necessity our nation is under for the instant adoption of whatever policy will start and sustain in active, healthful, and permanent growth every great industry of modern civilization which is legitimate and reasonably practicable in the permanent conditions of our country—which are essential to the symmetrical development of the nation, and to its political, military, commercial, financial, and industrial strength and independence.”
“So where will the jobs come from?
Answer: if they come at all they will come from small business and many of these jobs will not be particularly attractive.”
As someone who has made his living his entire life doing menial labor allow me to make a simple observation. We cannot support ourselves taking in each others wash. Every community must export goods and services equal in value to those which it consumes. Most services, apart from government services, call centers, and the like, cannot be exported at a distance. Look around you at all the stuff you use and buy. Almost all of it came out of a factory somewhere. Each community must produce its share. The logic is inescapable in my judgment.
Unless labor-saving technologies are matched with a commensurate reduction in the hours of labor they spell servants and class inequality. Samuel Gompers said that. Come on, Mead. I know you’re not an economist but denial is not a river in Egypt.
Did I mention that in addition to doing common labor my whole working life I was also a small businessman in the service industry of a medium-sized metropolitan area employing common laborers with few skills and little education. So believe me when I say I’ve thought about these problems not just theoretically but up close and personal. Small businesses are great, Joel Kotkin is right about that, but the notion that businesses are not going to be “making stuff” is simply mistaken. They may be subcontracting it out from larger companies or they may be doing it on their own but they are going to be MANUFACTURING real things made out of matter.
I’m sorry. I’ll stop ranting now.
Many of the same points were made by Moynihan in 1967 and more forcefully by Charles Murray in the early ’90s. All they got for their efforts was a whirlwind of denunciation as racist bigots. Personally, I think the Boomer generation will have to be moldering in the grave before Americans own up to the simple facts that 1) what they are doing doesn’t work and 2) they are not willing to what works. The latter requires society to make value judgments about life-style choices it has been remarkably averse to making. Cultural, social, and moral elativism rules.
Corlyss’ comment reminds me of one somebody made decades ago about Latin America, roughly: “Americans will do anything for Latin America except read about it” (apparently that was James Reston). Similarly it seems that American liberals will do anything for the urban poor except admit the fact that many of the programs they have supported for decades so strenuously and emotionally have been unmitigated disasters, and consequently even worse than a total waste of money.
It’s ironic that liberals uniformly deplore earlier Americans’ policy of forcing native Americans onto reservations, while at the same time they have been turning the less attractive portions of our inner cities across the country into what are in many ways modern functional equivalents.
A fine analysis and a wise prescription. Alas it comes down to “Until our urban leaders grasp these truths, conditions in the inner city will continue to go downhill…”
For them to grasp such truths it will take “a piece from the old Third Avenue el in the top of their heads to tell them.”
Living in San Francisco, I have often have amazing in which well meaning people tell me that “No one should be illegal” and that California needs to cut its carbon footprint. When I point that if we are going to take in relatively large numbers of unskilled new immigrants we need to find jobs for them to do and that the best jobs they could get would be in manufacturing, resource extraction or agriculture they look at me as is I am crazy. They say those jobs pollute, will hurt the environment, will kill endangered species and maybe even ruin their views. When I say well what should they do they talk about “Green jobs”. I then suggest that maybe they could work on high-speed rail and they say “That is a great idea!”
Liberals will only confront the errors in their thinking when marginal tax rates are back at 80%, inflation is at 8% and unimployment is at 15% but there still will not be enough resources for the government to give everyone what they “deserve”.
Race is the problem. Until the blacks correct their dysfunctional behavior, any area where they concentrate will be rather Third Worldish.
And money isn’t the answer as the Great Society proved.
And Corlyss above mentions Charles Murray, so should we look at the race-IQ factor also or is that still too taboo?
It’s not race, per se, but the attitudes of entitlement and anger within the black inner city populations. The black “leadership”, the race baiters like Sharpton and Jesse Jackson perpetuate the resentments of their brethren, instead of fostering a constructive attitude towards education and work and family. Instead, it’s about anger and resentment and taking.
I live next to a black woman who works, has a gorgeous house that she constantly works on. I grew up next to a black family; the father was a physician and the mother a college professor. They were wonderful neighbors, and their children have grown up and follow in their parents’ footsteps. So, no, this not inherently about race, that blacks cannot lift themselves out of poverty.
Mead is correct that we have to change the failed policies of the past. But in addition, he skirts around the problem of welfare and its perverse incentives, the huge proportion of out-of-wedlock and teen births in the inner city communities, and the resultant dysfunctional child-raising-children “families” that result. Twenty three year old moms on their 4th or 5th pregnancy (yes, happens a lot where I work, in a hospital), hey, why not, it’s all going to be taken care of by someone else, the medical bills, the money for food.
How do you make incentives for these kids to work? Many are functionally illiterate. They have no skills, no culture of work to emulate, can’t speak well, dress in ass-crack-showing clothes…would you hire them for even manual labor? I glean no desire for these kids to find work, even were it to be available.
But why work when if you do, your welfare benefits get cut down or off? I’m NOT advocating increasing the benefits, nor a higher minimum wage, but a sane structure has to be found to reward folks TO work, and not reward them for making babies, trashing the neighborhoods or shooting each other.
This is a cultural and economic problem. It has to be attacked both by sane economic policies, not the failed ones of the liberals of the past 50 years, but a very different set: real and lasting welfare reform that gives incentive to going out and working. The new policies might be seen as racist, or harsh, but we can’t afford to do anything less; what we are doing now has produced huge ills.
It’s really NOT limited to blacks, either, btw, though I hold a special amount of distaste for the disgusting creatures like Sharpton, but we see whites who act in response to the welfare state with the same predictable behaviors, NO different outside of the lack of racial resentment towards the rest of us. Instead, they are given the demagoguery of the Dems against the rich and capitalists, who are the ones holding the poor whites down. Nah, couldn’t be lack of education, lack of trying, etc.
I see tattoos on many of these young people, black and white both. Many have several tattoos each. I asked a co-worker, who is also “tatted” up, how much did her tattoos cost? She said on average, each one was roughly $200. I thought…wow, these “poor”, on food stamps, getting free emergency room medical treatment, who can’t read, can’t support themselves….they have $1200 for tattoos! What a great deal! (Yes, it’s not unusual for us to see someone with 6 tattoos!).
That’d be my first priority in life. I know, it’s one silly thing, but it bugs me to no end. The nurse getting the tats? Beautiful girl, the tats are covered up, and her own business, whether I think it’s silly or not. She works for a living, she pays HER OWN MONEY for her health insurance and her taxes and what-have-you; if she wants tattoos, ok, I think it’s silly, but it’s her choice. When a welfare recipient who won’t buy a $1 pregnancy test comes to the ER to have us do it (yes, the local dollar store has them for that price), but has 6 tattoos, and then is upset if we suggest, heaven forbid, that maybe she could cough up the cash for the test or go to the local clinic, where it would still be a great deal cheaper than coming to the ER (besides clogging it up when we’re busy almost 100% of the time anymore)…ohmigosh, I’m a racist hater and I don’t care about the poor and needy, either!
To sum up, nothing will get fixed merely by deregulation, though that’s hugely important. Having jobs available, making it easier for businesses to hire with less onerous tax codes and rules/regs…cannot agree more…but of itself, that will not change the culture of sloth and illiteracy and single teen moms.
The CULTURE of the inner city has to be changed. The CULTURE of the welfare crowd…white and black both, has to be changed. Money alone will not change it. We have to push those factors that will create the DESIRE for jobs, be it by the stick or the carrot. Instead, we did everything exactly wrong, per the liberal prescription, for 50 years, and compounded the mistakes by just throwing MORE monies after insanely wrong programs instead of acknowledging the programs were wrong from the get-go (detailed accounts of this in William Voegeli’s excellent book “Never Enough: America’s Limitless Welfare State”).
I’m not disagreeing with Walter, but think the answer is a great deal more than just “provide the jobs, they will come”.
In Chicago there’s a hot dog stand whose gimmick is that it hires felons (it’s in a neighborhood where such are in great supply). Laudable, no? Well, until you get to the point that it actually calls itself Felony Frank’s, with a hot dog in prison stripes for a logo. For two years it’s been fighting an alderman for the right to have a sign, because he doesn’t want people to think the near West Side might have a crime problem. (Suffice it to say, if they don’t know by now, a hot dog stand ain’t gonna tell them.) That’s the city that works… for some.
Case in point #1: Haltom City is a small suburb of Fort Worth, Texas. Within its city limits there was once a ice cream store that also sold a small selection of grocery items, and also had a little restaurant section that sold burgers and fries. Because it was classified as a “fast-food” restaurant, the local city demanded the shop put in a drive-thru window. There was no way this business could do this without closing down, and completely reconfiguring their facility. So, instead of complying with local code enforcers, they simply closed down their business and moved away.
Case in point #2: In the same city, a couple of technicians were working on a commercial air conditioning system. A local inspector showed up and demanded to see their EPA licenses. One technician had his, the other did not. He fined the technician without his license $10,000.00, then drove to the AC company business location and fined them an additional $20,000.00. This is despite the fact that the guy without a license was merely a helper (one of those low paying entry level jobs Professor Mead is writing about), and was not personally handling any EPA regulated refrigerant. So the business got fined a total of $30,000.00 for giving a guy a low paying entry level job.
Excellent post. It raises two related thoughts: (1) If a city had a robust black or grey market, those jobs would fulfill the requirements of little paperwork, easy startup, etc. Perhaps government’s increasing ability to surveil businesses stifles such growth. (2) If I’m right that black/grey markets could be a good thing for a city, could it be that illegal drug distribution is just that kind of black market? If so, part of the attraction inner city people feel for working in the drug trade might simply be that “this is a job I can get.”
I agree with “Mo” above who says the culture of the inner city and welfare must change.
I know a young, single Black mother of two in Philadelphia who cares for her children and also has plenty of food in the house (she makes pretty good money, mostly under the table –sometimes atop it, she’s an exotic dancer).
She could easily feed her two kids. But said to me: “Why? The breakfast and lunch at school are free.”
That attitude (or attytood, as they say in Philly) is at the root of the problem. This young woman feels entitled to handouts. She feels cheated if she doesn’t get what’s being handed out to others. She doesn’t pay much in taxes so she doesn’t understand that it’s someone else’s money who pays for her children’s breakfast and lunch. She only reports a fraction of her real income and bitterly complains about the huge bite out of her earnings from Uncle Sam and the City.
How do we change that mentality? If we cut them off stone cold sober, we’ll have riots in the streets and charges of racism!
If they’re weaned off, it will take generations.
I’m not hopeful. I think this permanent underclass will actually grow as opportunities wane.
America needs another technological leap forward (artificial intelligence, cold fusion, etc.) to goose productivity and maintain our lofty standard of living. Otherwise, the tax takers are going to swamp the taxpayers all across the Fruited Plain.
City of Chicago exist to pay city workers and provide welfare benefits to all.
In the Fall of 2008 I moved to Milwaukee to attend graduate school. I considered buying a “fixer-upper” house to fix-up while in school. Whether this is truth or not, I was discouraged when I heard that I would need to pull a permit for changing a light switch or a toilet, and have the work inspected. Of course, when the house would be sold, all the non-permitted improvements might be noticed, and fines applied. If this was not true, about the permits, there have been enough bad episodes to fuel such myths. I could see no reason to get involved in such stupidity. My solution? Forget it. Milwaukee is the western-most city on the East Coast, and over-regulation is every bit as stifling.
As a former public school teacher, I am pleased that my next teaching assignment will be at a parochial school at about 60% of my previous pay. But, I’m now an empty-nester, and the next state will have lower taxes. Hopefully I won’t have to deal with the cheating found in public schools on standardized tests.
So basically to bring back jobs to our cities we need to bring back exploitative, unsafe, sweatshops. It sounds crazy, but you make a very good point. Those are the only businesses that would ever hire poor illiterates with criminal records (since the good businesses can afford to pay for more skilled workers), and they are being strangled in regulations. Actually its worse than that, since you describe even very honest small enterprises also strangling in regulation. I think the right conclusion is if your regulations and inspections are strict enough that no sweatshops can exhist, then no small honest businessess can exist either, and the regulations need to be repealed.
Manufacturing of iPhones is outsourced because the jobs are low paying (Worstall writing at Forbes: http://blogs.forbes.com/timworstall/2011/07/03/ipods-who-gets-the-money-and-who-gets-the-jobs/ The high paying jobs are still at home.
Also, read “Factory Girls” to get an idea of what competition for wages is like in the cities near Hong Kong. By comparison, we’re like Rip Van WInkle, asleep under his tree.
I once needed a rust hole in my car patched quickly to pass inspection. At Maaco it was $500 to start next week. Instead, in a derelict inner-city factory, a crew of illegal Brazilians did the job for $200 (negotiated in broken Spanish), and I had my car back the next day. Five years later, the fix is smooth and rust-free.
A “forest of regulations” doesn’t prevent “bad jobs”; it only prevents white people from creating those jobs. If the proprietor has brown skin and doesn’t speak English, the city inspectors leave him alone.
Much of what you say is true, but I do not think that there is any solution for our large metropolitan areas except to die, like Detroit. Edward Banfield in his essay “Rioting Mainly for Fun and Profit” had it exactly right, and it is as right this summer as it was in 1968. The subculture of the ghetto acts like a lamprey on the city and its elected officials eventually destroy the host.
LA in particular and CA cities in general have reacted to the thickets of regulations by having jobs go underground. There are tens of thousands of small businesses that are family-run with illegal employees paid under the table. These businesses try to have as little contact with the formal bureaucracy as they can, and an tacit “don’t ask, don’t tell” policy exists where the bits of the formal bureaucracy that they do come in contact with don’t question them, ie health inspectors in restaurants don’t ask about the legality of cooks and busboys.
And, while people often imagine that illegal workers are hired to avoid minimum wage, the truth is “illegalness” is more a reaction to the massive overhead involved in legally hiring low-end workers, which can cost the employer as much or more as the actual employees’ pay.
If you want to get Americans hired in these jobs, we have to make it vastly simpler to hire low-skilled people: lower taxes and less withholding, get rid of “living wage” laws, make it easier to hire and fire without triggering lawsuits, etc.
These jobs aren’t great, but plenty of immigrants come and manage to save enough money doing them (by living “illegal” super-cheap lives) to start their own little businesses, which then use the same “illegal” employment model.
The City of Chicago is a perfect example of how regulation, regulation and political bureaucrats to implement the regs kill small business. My father had a metal plating shop on the south side. He shut it down when the bureaucrats (OSHA, EPA, ILEPA, city environment, building inspectors, property taxes, “rat” inspectors, truck inspectors, etc.) made it impossible for him to work at anything but a loss. 5 minority unskilled workers lost their jobs when he shut down.
It’s really hard to fathom what’s happened to Professor Mead. When he dreamed up his theory of the etiology of urban decay, did he even bother to pause for a thought? Did he make any effort at all to see if there were any actual facts that supported his hypothesis?
Mead contends that excess regulation is one of the main components leading to an employment crisis in American cities. And as usual, he associates what he considers to be a mindless regulatory scheme to the Blue State model. Then for the icing on the cake he throws in a story about the child care center next store and their difficulties in expanding into a basement.
Sure, that’s what we want Professor Mead; lots of little babies and young children crammed together in a basement. Are you actually surprised that New York City has detailed safety regulations governing day care centers? Are you seriously suggesting that the solution to urban decay is to be found in reducing the regulatory burden on those who care for scores of children? If you are not claiming that, then what precisely is your story about the day care center next store supposed to prove? It may come as a surprise to you, but the idea that your anecdotal experience on your coop board provides any valuable statistical information about New York City’s regulatory scheme is just absurd on the face of it.
Here’s a list of the unemployment rate in urban America published by the Bureau of Labor Statistics for May, 2011.
Professor Mead’s hometown of New York had an unemployment rate of 8.3% which was actually below the national average of 8.7% for America’s urban areas. Of course the unemployment rate for the entire nation is in excess of 9% but that’s because unemployment in America’s rural communities is even worse and drives up the average. Interestingly, the unemployment rate in the “blue state” New York Metropolitan Area was identical to the unemployment rate in Houston in the reddest of red states; Texas. Other metropolitan areas in red states with far more severe unemployment than “blue state” New York include: Greensboro/High Point in North Carolina, Myrtle Beach in South Carolina, Spartanburg, South Carolina and Tampa, Florida.
If it’s the regulatory burden of blue states that is contributing to high inner city unemployment how does Professor Mead explain far worse unemployment in red states where the regulatory burden is, according to Professor Mead, not as bad?
Even if we look at the worst the blue state model has to offer, Detroit, there are numerous metropolitan areas in red state America where unemployment is even worse. Examples include Brownsville, Texas or Yuma, Arizona.
This list demonstrates that the correlation between blue state unemployment and a harsh regulatory environment exists only in Professor Mead’s fertile imagination. And it demonstrates that red state urban areas with significantly less regulation than their blue state counterparts are just as likely to experience high inner city unemployment.
It’s just a little more evidence of how flawed Professor Mead’s views have become
I was a widower with several small children during the 90’s. To keep working, I hired babysitters and paid their employment taxes under the employer ID number of a small side business I operated. My attorney helped me comply with all employment laws.
One of my babysitters quit to get married, and filed for unemployment compensation. California paid her 26 weeks of compensation, then dunned me for about $8500.
I lost my case on appeal, but California suspended collection as long as I did no further work or hired no more babysitters
under that employer ID number. With my income way down and child care costs through the roof, I couldn’t pay the $8500 judgement.
Thanks to California, another small business was destroyed, and more economic activity was driven underground.
I agree with Mo. Mr. Mead is correct about the stifling effect of regulations, but scaling back or eliminating them will not, ipso facto, solve the problem.
I live in Houston, one of the bright spots in the economy. Houston has no zoning laws, so there are little scrap metal dealers, transmission repair shops, tire shops, etc. strewn intermittently throughout the metroplex. Whenever I frequent some of the more humble of these establishments, which look like an OSHA/EPA nightmare, all I see are Mexican and Central American mestizos working there, never African-Americans. The jobs are there but black people don’t want them. It is easier, and more glamorous, to be a gang-banger, drug dealer, welfare recipient, ex-con, pimp, or thief than a low wage earner. Liberals celebrate and validate this cultural preference with their every pronouncement. The website “Stuff White People Like” makes high comedy about this phenomenon. When this begins to change (I’m not holding my breath) then the inner cities can begin to heal, not before.
A thoughtful column like this receives thoughtful responses instead of the typical snappy one-liners with attitude. This observation permits the argument: Good city policy will get a good response from inner city culture. Trying to precis the column, I posted “The perfect is the enemy of the good”. http://metanoodle.blogspot.com/2011/07/perfect-is-enemy-of-good-cities-in.html
Does anyone see the single over riding thread in all the comments and suggestions being offered here?
Government is the root cause of all that is described as a problem.
Relying on government for the cure, as the author is here, is the height of folly.
Our political class doesn’t have the strength of charecter that is needed to effect the changes in government structure that would put us on a path to greater growth.
Just look at washington today…they’re arguing over pennys, while blowing billions (338.3) on support for illegal workers…
In the past, societies fell to outside barbarians…we don’t have those any more, so we’ve systematically set about to create just such a barbaric society in our inner cities…
While you have raised some valid concerns I have an alternative proposal:
Let’s continue to import millions of people for which we have no jobs because eventually we progressives will have a demographically engineered political lock on this country, much like we already do in California and New York. You see, only when the hopelessly backward conservatives are finally politically marginalized can we progressives go about the task of solving the “jobs” problem and fixing everything else that’s wrong in this country. I fully understand that my strategy will make the problem worse before it gets better; however, you have my full assurance that even though the future is going to be a rocky ride that everything will work out in the end.
Oh, and by the way, if you don’t agree with me it’s because there’s some part of you that’s racist.
Why can’t these regulations by sued out of existance through disparate impact lawsuits? They clearly have a disparate impact on the urban poor. In many cities, this means African Americans and Hispanics. Clearly there is an effective racially-distinguishable disparate impact.
@Lern: I suspect most of those scrap-metal outfits are the same “family + illegal employees” model common in CA. The problem with illegal employment is an American (Black or otherwise) couldn’t get the job even if he wanted to; they aren’t advertised in English-language media (although if you can read Spanish newspapers, you’ll see lots of ads there), and the employer won’t trust them to not sue him if he hires them under the table in the same way as he hires illegals. (And it is far from unknown for the business owner to be illegal himself.)
The industry that employs me requires a lot of electric power that must be supplied continuously. To guard against utility power outages, we maintain large Diesel electric generators.
California has enacted a global warming policy that intentionally increases the cost of energy, and Jerry Brown recently signed a renewable energy mandate increasing the amount of power electric utilities must get from “renewable” sources. Undoubtedly, power from these less efficient “renewable” sources will cost more.
California also imposes a heavy regulatory burden on Diesel generators, limits our usage of generators, and can fine us if we use them too often.
My industry’s income is hurt by the depressed So Cal economy and it’s hard to increase revenue. Each time government increases the cost of our basic raw material,
some other expense must be cut. That often means reduction of work force.
I’ve written politely to my California legislators, all of whom are Democrats, several times in recent years pointing out the economic harm they inflict on workers, but I’ve never received a reply or seen any indication that they care.
Luke Lea makes some good points, but there is a fundamental assumption he makes that is not correct. He makes the assumption working less will result in more jobs. It might in the short run, but the long term results will be economic stagnation.
When a large factory updates its technology and lays off workers, the increased efficiency to society is measured by the fact that you have a new group of workers that can now devote themselves to providing another service that was not possible before because everyone was tied up doing something else. If workers simply worked less as a result of new technology, you have NO net increase in efficiency and NO net increase of wealth in the society. In that case, you have no net economic growth. Remember, wealth is measured in goods AND services widely available, not in paper money. If you are not interested in wealth or technological innovation, and quality of life if measured by amount of free time, than that is okay. However, the only reason we have people availble to invent I-phones and laptops and new drugs is because when the tractor combine was invented, people could stop working at farms and do something else. New, more efficient factories are the modern day equivalent of the tractor combine.
The problem arises when the laid off workers have no opportunity to develop new goods and services that those with increased money (the ones that own the factory) need or want. This can happened if those with increased capital (as a result of new technology), 1) choose to spend it all on goods and services produced in foreign countries, or, 2) if, as the author of the post describes, laid off workers without professional licenses are prevented from providing new services by excessive regulation, or 3) if the laid off workers have no opportunity to develop the kinds of skills that those with capital would pay for, or 4) those laid off workers do not have the emotional wherewithal to overcome 1)-3) as a result of drugs, broken homes and lack of a familial support structures. There are immigrant groups that do have that strong familial support structures that have been amazingly successful at creating new jobs and services and climbing the social ladder in the US.
I believe the problem is a combination of 1-4. The author of the post addresses 2) quite well in his post.
The main problem is the politicians who can facilitate changes in the cities have no interest in doing so. They are generally liberal Democrats with little or no competition, they basically hold office until they die. They get their campaign money from the public sector unions and the moneyed gentry; the poor are basically window-dressing for campaigns and otherwise irrelevant. Their unwritten motto is “The Status Quo R Us”, and as long as they’re in the way, nothing will happen.
I have recently discovered your blog after reading your book God and Gold, and i think you clearly stand out among American thinkers, although i sometimes disagree with your conclusions. I happen to be Greek, and as you probably know, we are facing a grave crisis here; most people blame the public bureaucracy, government workers are relentlessly attacked as lazy and corrupt, and everybody believes growth will only come from small businesses. It seems you in America face the same problems (of course not on our scale) judging by your commentary on urban conditions and the role of city bureaucracies. However, i believe both Europe and America must not follow brutal policies such as further reduction of the public sector. Just because the Chinese are more competitive, should the developed world pursue a path of barbarism? I think it’s absolutely logical to improve the pace of bureaucracies and make it easier to start a business, but it is sheer madness to continue decreasing the number of government workers and to call them privileged and parasitical. Perhaps we really do need some sort of global authority to control the pace of global change; public sector workers in both Europe and America can’t be asked to endure the dramatic worsening of their living conditions.
End all the regulations against enterprise! Anyone should be able to buy a dozen hot dogs and buns, cook them up and sell them on the street- anywhere at any time.
If I want to buy one and eat it that’s my responsibility. Just make the law state that you cannot sue an unlicensed vendor.
If I want to offer window-washing, taxi service, or any other service and product, there should be NO regulation or license required to do so until my gross income exceeds $250,000 for 2 years in a row.
Only when enterprise at the lowest level is open to everyone will our economy take off. Let’s embrace the cash/black market and get the economy going. Licenses, etc are really just a government form of monopoly protection like drug prescriptions.
May I submit:
If the cities are not serving. And if change cannot be made while the cities are in the hands of those currently ruling. Then, the conclusion is that no change can be made and the cities will not serve.
Maybe the way out is the way out. How about making it easier for people to leave?
One MAJOR problem that keeps unemployment high in the cities is the vast array of available government entitlements. The government has had the effect of funding unemployment. And, whatever you fund, you get more of.
I am not suggesting that we abandon the poor. I am suggesting that poverty shouldn’t be a lifestyle choice. The answers aren’t easy. But that “lower rung” private enterprise you so aptly described above is competing against housing, food, energy, etc which is provided by entitlements which remove the incentive to work those jobs. Why work those tough jobs for things which I can get for free?
The “good” jobs and “bad” jobs differentiation laid out here is unclear. Jobs are not exercises in morality. Jobs are and will be created when the investor has determined that employment of a “qualified” individual will provide a positive return on the investment. The lowest salaries are paid to those individuals with minimal skills and/or experience. That is why the rising unemployment rates for young adults can be tracked directly to the 2007 increase in the minimum wage. The effect was to price certain low skilled jobs out of the market. The political class – BOTH parties – have decided that messy and smelly jobs are “undesirable.” Thus, a radical restructuring of the incentives to invest and grow private business MUST be made NOW. For example, just the zeroing out of corporate income taxes would stimulate a tremendous inflow of domestic and international capital into the U.S. economy. But we live in a “class warfare” wins votes world. As a consequence more pain and suffering will have to be endured before the theoretical and practical bankruptcy of neo-Keynesian, Krugman-ite economics is seen for the “wooden nickel” that it is. Viva Austrian economics!
One thing cities could do right now, right this minute is to stop taxing real estate improvements and instead tax derelict real estate and vacant parcels. This would have the immediate effect of forcing absentee and slum landlords to either begin to improve their properties or sell to parties with the capital to do so. Its asinine to tax the very thing you need while in effect subsidizing inefficient uses of land that are contributing to the long goodbye of our core urban areas. To offset any immediate loss of revenue, sales taxes could be increased, which would capture revenue from all citizens and activities legal and otherwise instead of expecting only the productive class to foot the gov’t bill for everyone else.
Your ideas are fairly sound, Dr. Mead, but we are decades away from implementing any of them and probably only after the cities are razed and we start over. Democrats win huge majorities in the cities. Do you see any Democrats calling for solutions that you advocate? In fairness, Republicans probably wouldn’t either, but we’ll probably never know. They are unelectable.
Would gangs that roam the inner cities allow small businesses to open without paying for “protection?” The degree of hoplessness is certainly a travesty.
How about an “Ignore” button on the comments page? The egregious spammers don’t get their stuff read, but it’s annoying seeing their names multiple times.
None of this will matter if we don’t start TEACHING our children instead of “educating” them. Math scores-down. Reading comprehension-down. Science-down. English grammar-“not essential”. Civics & History-watered down or nonexistent. Two-thirds of high school graduates can’t make correct change from a $5 bill. “School of Education” is another oxymoron. Give us another twenty years, and we’ll be a third-world country, if we exist at all.
Perhaps some (many) of these cities are dying. I wonder if all the effort to save them is worth it. Maybe many of the poor blacks moving from Chicago and New York back to the South have the right idea. Perhaps the cities that do survive will learn to operate more efficiently out of fear of ending up like Cleveland or Detroit. Doesn’t seem like any of this should require a lot of elaborate planning and money.
Actually I believe there is a policy change that can greatly affect the morals of the inner city. The ‘separation of church and state’ is a new thing. What is actually in the Constitution is that Congress shall make no law (that part is actually the key phrase, Congress shall make no law) establishing OR prohibiting religious expression. Historically speaking the original school house was the town church and the pastor’s wife was typically the teacher. What simply needs to be done is re-level the playing field by subsidizing the student rather than the school system, and yes, I’m talking vouchers. Allowing parents and students the choice of schools will open the door to a re-entry of morals, sound social models and a healthy environment where the teacher runs the class room not the hooligans. Essentially we are talking about privatizing the school system. What would the results be? Many more would choose schools that offer a religious education, in fact we would likely see many more churches doubling as schools. Is there any doubt that as we see more of these students that they would be more likely than less to get married before having babies, get a job before getting married, complete their education to get a better job? If you want to see a place where this is already starting to show results, look no further than DC.
After a life time(80 yrs) of opposing the concept of legalizing drugs, I’ve come to the conclusion that it’s clear we can’t beat ’em so we’ve got to join ’em. What’s happening in Mexico: the killings, corruption of officials, is too great a danger; what’s happening in the U.S., the cost and social ravages of incarcerating so man non-viotlet people is just to high a cost. I’m not smart enough to design a system in detail, but a few thoughts: Don’t limit a program, cover all drugs, includng the hard drugs; have a feder/state program for dispensing drugs at the lowest cost possible; don’t try to earn revenue with taxes, just price at a level that will pay for the program, the idea is to take the profit away from the narco kings; treat drug use much like we treat alcohol use, only more so: no use in public, heavy penalties for operating a vehicle or dangerous machinery under the influence; maybe it should be illegal to use such drugs, with a maximum fine of $10 – just so parents could still tell their children that drugs are illegal. We’ve got to do something diffefrently. What happened to society way back when drug use was not illegal?
Typcial liberal, I have a better idea than increasing immigration and the marginalization of conservatives. Do the immigration part, but rather than marginalize those who disagree, murder or imprison them like they did(and do) in Cuba, Venezuela, N. Korea, the former Soviet Union and Communist China. Far more effective, clean, fast and pure. How’d that work out when “progressives” were in complete control?
Now, if the capitalists took that tack, and “eliminated” progressives, hmmm, that’s never been tried, and might have merit. How’s it go? You can’t make an omelette without breaking eggs? The ends justify the means, right?
Another thoughtful and clear-sighted essay, Prof. Mead. We can only hope that some progressives still capable of rational thought will read it.
You hit on several key points, most notably the suffocating effect of endless regulations administered by a dysfunctional bureaucracy in many of our cities, and at the same time the insularity of the upper middle class gentry from these problems. Remove these shackles on individuals and small businesses, and watch our cities become vital and start to grow again.
The government’s role is to provide basic services, which it so often does a poor job of in our cities–police and fire protection, sanitation and health services, public schools and libraries, and infrastructure like streets, sewers and drinking water–but otherwise then get the heck out of the way. People do not naturally want to be poor or unemployed. The natural drive of every human being to improve his/her condition will take over, if given half a chance. It might not be pretty or fit with polite liberal sensibilities to have a sprouting of auto repair garages, plumbing and construction contractors, metalworkers, delivery services, and daycare centers in church basements, but if people need these services, other people will find ways to provide them. A thousand examples of this kind is what creates jobs in cities, not government programs or stimulus. These are the lower ladder rungs to self-sufficiency and the middle class which our wrong-headed policies have been preventing rather than encouraging.
We need to eliminate most of the regulatory and bureaucratic apparatus of our cities and simply get back to doing the basics well. Parents should be able to send their children to the best school in the city and not be hogtied to a local failing school. Drug possession should be decriminalized and rent control should be phased out, which by itself will unleash a housing a construction boom. Welfare in the form of cash transfer payments should be eliminated completely, and deadbeat dads should be tracked down to provide support and care for their children wherever possible. Responsibility will not spring into being overnight, but we must put an end to government programs that create and encourage gross irresponsibility and wanton disregard for one’s own offspring.
None of this will be easy to implement in practice, but the hardest part of all may be the first step—our elites understanding that the progressive blue state policies have failed. The persistent problems of our cities and the blue model have now spread to states and are now threatening much of the nation as a whole. One can no longer flee New York for California, which is going down the same misguided path to a failed state. Everything must be looked at a different way, with many previous assumptions about race, class, and poverty simply discarded.
Only when that happens can our cities and our nation see some real hope and change.
Prof. Mead, I would be interested in knowing if you see this reevaluation beginning to happen among our well-heeled elites. Or does the country have to reach economic collapse and political upheaval before they awaken from intellectual slumber and laziness?
So the bottom line here is get the government off our backs. Or am I missing the point?
Walter, good piece. I’ve enjoyed this series on cities thus far. However, in this passage I feel like you imply that starting a business is easier in the developing world than the developed one:
“To get these jobs, we have to change the way our cities work. Essentially, we have created urban environments in which the kind of enterprises that often hire the poor — low margin, poorly capitalized, noisy, smelly, dirty, informally managed without a long paper trail — can’t exist. The kind of metal bashing repair shops that fill the cities of the developing world are almost impossible to operate here.”
Admittedly, there are lots of unwarranted regulations in the U.S. and, of course, we can always do better, but a quick look at the “ease of doing business” rankings shows that the U.S. is near the top (#5 out of 183), even in areas such as dealing with construction permits, registering property, and enforcing contracts (http://www.doingbusiness.org/rankings). Developing countries, on the other hand, hover near the bottom. Most notably booming job creators: India (134), China (79), and Brazil (127). These countries have Himalayas of red tape, compared to our Appalachians. These annoying regulations in our cities, which SHOULD be improved on mind you, are nonetheless a positive sign of standards and certainty. As these developing countries rise in wealth, there is no doubt they will cut away their systems of patronage and cronyism to resemble our much sounder regulatory system. So perhaps the typical conservative canard of “how many jobs we could create if only we got rid of that nasty red tape” is overblown when looked at comparatively.
I suspect that if individual cities in the US were ranked on that index, many would rank far below the national average. Also, those comparisons are often tricky. Are we talking incorporating a business, setting up a hot dog stand, opening an auto repair shop or what? Also, many of those developing countries have a relatively small sector of “formal”, licensed business alongside an informal and almost entirely unregulated sector. Often it is very difficult to establish a formal business but much easier and less complicated to work in the informal sector. It is easier to open an unlicensed minivan service in the developing world than to set up a taxi company in the US, for example.
Mead’s comment on ‘high value jobs’ form the upper middle class point of view is well taken. In my city, a proposed Walmart distribution center has been protests, lawsuits, demonstrations, and media wars. The jobs pay a decent wage; are available to the less skilled; and in a region with 19% unemployment there would be as many as 900 of these jobs. So why not? The most consistent arguments were their ‘menial’ nature (warehouse work); pollution (trucking based) and noise. After a local referendum voted for the plant overwhelmningly, a local protester vowed to file suit in federal court. He never did, as his graduate studies grant ended, and he moved back to San Francisco.
Mead is right. Those of an upper-class mentality do not get it. They never will.
“Do the immigration part, but rather than marginalize those who disagree, murder or imprison them like they did(and do) in…”
Unfortunately, that strategy would make it considerably more difficult to keep up the pretense of American democracy, otherwise it would be preferred.
“The ends justify the means, right?”
Nah, the fun of implementing the means justifies the means, it’s not as the ends are supposed to matter anyway. The thrill of indulging in a transient power trip is always worth the destruction of nations.
Mr. Mead makes a good point when he says that regulation is strangling productivity and limiting job creation.
Some of the commenters badly need an economics lesson. I recommend reading Frederic Bastiat’s Economic Sophisms. Wealth cannot be created by limiting hours of work, mandating higher wages, or by imposing tariffs. Wealth is created, and society advances, when labor produces more result with less effort. As technology advances and our knowledge advances, costs go down and resources are freed to support new growth in other areas of the economy. The price system on the free market tells producers where to invest. Any government attempt to drive demand will fail and will result in the misallocation of resources.
We need a return to the free market and an end to government interventionism. The law exists to protect life, liberty, and property.
Do not forget, we have had city bureaucrats shut down lemonade stands of 10 year olds for failure to have a license.
Very nice piece that danced around individual responsiblity, which I understand given our political situation and changing demographics. America has changed and now is the land of the entitled, whether you are a senior that is paraded out by the democratic party complaining about any cut in benefits even though any current cut will not affect you or is greater than the amount you ever kicked in, or the unions that have bankrupted every area they have been involved in, particullary government unions where they have traded votes for taxpayer cash and still have received raises and perks that are out of line with reality Or the victimhood industry that continues to syphon money from the taxpayer. The solution is obvious, Let’s just raise taxes on the rich since they are the problem. I have given up hope at this point as we have become Greece. A Democracy that can vote itself money without production. Half of the country does not pay taxes, so why not vote for the party that promises you money without effort. I can’t blame them but I was raised in a different way. God forbid you take control of your OWN FUTURE and stop blaming everyone else for your situation. Talk to someone with a complaint and there is always an excuse. It’s a tough world and you are in the best possible place, go to Mexico, South America, Africa, I don’t care anymore as I’m sick of the media excusing bad behavior as they isolate themselves and their children from the impact. The Situation will not get better and you can blame Republicans if it makes you feel good, but it will not change if you do not make it happen for yourself. Try working hard, graduation high school, not having more kids than you can afford. invest in education ( that matters, Engineering, computer Science, etc, )and you will find that you will be lucky. No Secret, but it is hard.
Shouldn’t there be a movement to outlaw public sector unions outright? A constitutional amendment to that effect would solve so much.
“Think of the path to successful middle class living as a ladder; the lower rungs on that ladder are not nice places to be, but if those rungs don’t exist, nobody can climb. When politicians talk about creating jobs, they always talk about creating “good” jobs. That is all very well, but unless there are bad jobs and lots of them, people in the inner cities will have a hard time getting on the ladder at all, much less climbing into the middle class.”
This will not to be embraced by people or an entire class of people who have the words ‘entitled’ and ‘entitlement’ etched into their ethos. If you are entitled then you are entitled not to take unpleasant work at the bottom of a ladder or difficult work like climbing a ladder.
Like others, I think this has been a very worthwhile series of pieces. Nonetheless, there has been a one-sidedness in pointing out that FDR/LBJ-ish liberalism is out of gas and hasn’t done much in 45 years to solve problems. True as far as it goes, but the current financial crisis, in my opinion, has roots in what has happened in the last 45 years, and shows that the political apparatuses we have are dangerously clueless or worse, utterly powerless, or even worse, hopelessly corrupt, in addressing gathering financial sector storms.
Look at urban (or any other) commercial real estate vacancy and you will see that an inordinate amount of small business over the last few decades has been financial service related, primarily dependent on real estate and associated. These businesses were/are very much like what WRM is talking about. There were/still are exceedingly low barriers to entry. Fairly serious criminal records often didn’t prevent entry. And from a capital perspective, maybe only a few computers, a router, a phone system and a good copy machine were required. And oddly enough, the guiding ethic of these companies was illustrated in the move “The Boiler Room,” and the “clanging” was metaphorical, but their smelliness and noxiousness, not so much.
President Obama is an interesting case here. On the one hand, as a “community organizer,” he undoubtedly experienced how consumer credit issues were becoming increasingly problematic for poor people, especially working poor people. Rental checks, credit reporting, payday loans, rent-to-own, bank overdraft fees, the declining utility/negotiability of cash, child support collection (losing driver’s licenses, for example, for non-payment), bogus educational programs that only exist to get federal money, and on and on … make being poor an even worse proposition than many understand. We essentially have allowed private business to collect “poor taxes” on otherwise marginally taxable workers. On the other hand, he undoubtedly saw how these businesses (not all small, by the way) employed many of the more gifted people with the same background into their money machine. Then Sen. Obama, on the Senate Foreign Relations Committee, voted to approve the nomination of the CEO of a most egregious “predatory lender” to the US Ambassador to the Netherlands, once that CEO had settled a 49 state attorney general investigation into the company’s practices (and they were really bad and right out there for anybody who cared to look). I suppose if I had known this, I might not have voted for him. But, Sen. McCain’s offsetting cluelessness – when he suspended his campaign (why was that again?) – was a kind of last straw for me. I had never not voted Republican before, and haven’t voted Republican since. (Note: I recently saw an interview with Thomas Sowell, whose books gave me my entry into conservative thought. He said the root of the financial crisis was people borrowing money that they couldn’t pay back. To borrow a phrase from him, I would say that some things are so ridiculous that it takes a Ph.D in economics to believe them).
All this said, while the problems to me seem pretty obvious, the solutions are not. We have a massive private debt overhang that isn’t going away, and depressing consumer demand. We have a stalemated political system where on the key issue as I see it, the positions are practically identical (does anybody seriously think that whether Geithner and Paulson is the SOT makes a difference?)
Finally, implicit in WRM’s piece here is a real bomb: education may be entirely worthless for most people. This is an ugly potential truth. It is certainly important at the highest reaches (usually), but for everybody else it’s going to be grit and hussle.
I would add that this year is the centennial of Triangle Shirtwaist Factory fire. Four years ago, the I35W bridge collapsed in Minneapolis occurred (there is also an I35E branch through St. Paul).
One was an unregulated private sector failure. The other was a government failure. On this, I absolutely agree with conservatives (libertarians, too). The Triangle fire led to changes, eventually. Government failures almost never do. And this is interesting: liberals have largely given up on infrastructure because: 1) environmentalism; and 2) too many of the beneficiaries are Republican. And, they have given up on meaningful reform anywhere it might cost them something.
That said, Republican’s effort at infrastructure are always crony oriented (and regrettably, Gov. Palin had perhaps the one and only exception).
Given the tenor of many of the comments here, I don’t think that this will help, but David Brooks made comments Friday on NPR and the News Hour (PBS, omg!) that I would extend upon.
Middle age democracies (nations?) get encrusted and lose part of their mojo. I would add that conservatism has incorporated a lot of bad blood from old arguments that nobody (or almost nobody living) was party to. I would equate this to an American Balkanization: we can’t solve present problems because old grudges must be settled first.
At the moment, it seems like the cutoff is Jackson and the Bank of the United States. Maybe the Civil War. But there is no doubt in my mind that from Teddy Roosevelt on, the mindset is counter-revolutionary. Simply being a “progressive” earns one condemnation because government can do no good, doesn’t truly create a job and is generally yet another parasite on productivity. But, as Judge Richard Posner says, “sometimes, maybe often, but not always.”
Political imagination is not well-regarded in conservative circles. The four “conservatives” that come to mind are Ronald Reagan, Jack Kemp, Newt Gingrich and George W. Bush. Reagan: too lucky and being at the right place at the right time – dereg started under Carter, and marginal tax rates were well understood to be absurd. But, ask poor people if the government got off their backs before you put on your tri-cornered hat. Jack Kemp: too naive to see that he couldn’t redeem those behind him who couldn’t care less about about the poor. See Reagan. Newt Gingrich: maybe too smart, but definitely too flakey to follow through on anything he said five minutes ago. George W. Bush: too political, but he’s a special case, in that he did advance the state in so many ways, yet was hated and therefore loved by implacable factions.
I’d like you address the issue of the distribution of income. According the Sen. Bernie Sanders, the increase in per capita GDP over the past couple of decades, which has been enormous, has almost all gone to the top one tenth of one percent of the population — i.e., those whose income’s are derived primarily as a return on their capital wealth and together with those they hire to manage their wealth (bankers, corporate CEO’s). Are you a libertarian in the sense that you that the natural distribution of income in a market economy is the best one or is it a matter not knowing how to do anything about it without destroying the incentives to save and invest? Or something else perhaps?
For society, “the traditional value system, originated out of long and tragic human experience, was encapsulated in traditional religion. As religious mythology, cult, and ritual were demolished by critical rationalism the values of which these were the virtually sole and fragile carriers also suffered, came into disrepute…and were insensibly superseded by the harsh values of success…. Religion, in the process, was reduced from a vital, widely shared world view to routine churchgoing….” Because man by his very nature must always live by one set of values or the other, the new set of harsh values (success by any means) not only filled a vacuum but accorded with developing U.S. economics. The values of the success cult begat approaches identified by WRM which at some level led to our impending city fiscal/social problems. To seriously consider the destructive impact of our model sans attention on bulk of American cities, we Americans must reexamine the success cult and ask whether it has malserved not just our cities but ourselves as a nation.
“It should be observed that, except for disaffected, out-of-step critics, there is no widespread rejection on the American scene of the notion of success. Not only does a broad public uncritically accept steamy monetary success as a proper life goal but it feels any questioning of this goal to be un-American…The unsuccessful are regarded with contempt or pity, often even by themselves.” What America needs at this perilous juncture in its history are perhaps new economic institutional forms that consider the nature of not only Keynesian economics but also Strussian/Friedman economics to new capital arrangements that subsume our cities; and whether new forms/models need to redefine cult of success in America.
“But even as we work on getting the government side of the equation right we need to realize that many of the most pressing problems of the inner city cannot be solved by the government.”
Mr. Mead, I know you have a belief that government must have role in providing some type of services for the poor, but have you considered that the government will never get its part of the “equation” right and that maybe, just maybe, the role of government should be solely defined to providing for the military and ensuring that all laws apply equally to all people, not trying to be the moral arbiter since it itself is consisted of nothing but imperfect men?
The problems discussed and the problem of distribution of wealth are two sides of the same coin. Despite the howling of the Left, the fact is that heavily bureaucratized and hyper-regulated economies generally show much worse stratification of income and reward. This is because the cost of compliance is a heavily regressive tax. It is much easier for a national chain to deal with a change in regulation than it is for a single store. Even more so, the owner of a national brand can get a senator on the telephone, the owner of a small shop making a similar product for a local market cannot. Regulation is always painted as a kind of control on Big Business, but in reality, Big Business will always pass the cost along or absorb it, and Little Business will suffer.
Hence, the number of businesses in any given sector of the economy falls as regulation grows. How many auto manufacturers did we have in 1920? As the structure centralizes, the power accrues to the fewer and fewer players left in the top tier; they can dictate wages, rewards, standards, and quality to a degree impossible in a field with numerous competitors.