Friday, December 2, 2016

Why are People Left Behind in Modern Society?

The general sentiment that I have seen regarding Donald Trump's election is that many people in America are feeling left behind and felt as though nobody in the current government was doing anything about that. Part of the explanation for people being left behind is, indeed, because many manufacturing jobs have been sent off to developing countries where wages are much lower and where, in general, environmental regulations and other worker and consumer protections are not built into the cost of manufacturing. The result is actually good for people because the increased availability of affordable consumer goods in this and other countries essentially raises everyone's standard of living since things are cheaper to purchase than they used to be. The availability of these cheap imported goods is the secret behind the amazing success of the Walton family--Wal-Mart opened its first store in 1962, shortly before the globalization of the labor market really took off. 

At the same time, however, manufacturing actually continued unabated in the U.S., but automation is replacing workers, as demonstrated by a Washington Post article intriguingly headlined "A single chart everybody needs to look at before Trump's big fight over bringing back American jobs..." The graph is from a report by researchers at the Brookings Institution and makes the point that "U.S. factories now manufacture twice as much as they did in 1984, with one-third fewer workers." Here's the graph:


The workplace is different than it used to be and people (including society in general) have to respond. But it is hard when there are obstacles to social mobility and employment success. The biggest obstacle, according to two new studies (adding fuel to a long-running hypothesis) is the family into which a child is born. A report out from the National Academy of Sciences concludes that "Parenting Matters."
From birth, children are learning and rely on parents and the other caregivers in their lives to protect and care for them. The impact of parents may never be greater than during the earliest years of life, when a child’s brain is rapidly developing and when nearly all of her or his experiences are created and shaped by parents and the family environment.
And a study out of Stanford University's Center on Poverty and Inequality shows that the U.S. and U.K. lag behind other culturally similar countries in ways that limit a child's chances of social mobility. The Financial Times summarizes the situation as follows:
Median family income was higher for rich families and lower for poor ones in the US and the UK than in Australia and Canada. In low-income families, the proportion where the mother was in poor health was far higher in the UK and US. 
The percentage of children born to a teenage mother was strikingly higher in poorer families in the US and significantly higher in the UK than in Canada or Australia.
In other words, we start out with too much income inequality (exactly as Thomas Picketty has famously talked about), but then compound that with high levels of out-of-wedlock births which lead to limited means available for children's development, not to mention the limitations that this places on the mother herself. 

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