If "average is over," as author Tyler Cowen predicts, woe to us.
Cowen has been anointed by Bloomberg BusinessWeek as the nation’s "Hottest Economist," so attention must be paid. His previous book sported the longest title in recent memory: "The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better." Cowen’s just-published tome carries the much starker title, "Average Is Over." It reminds me of Garrison Keillor’s weekly monologue sign-off: "Well, that’s the news from Lake Wobegon, where all the women are strong, all the men are good looking, and all the children are above average."
But in the world according to Cowen, 85 percent of the population will be below average. In his "survival of the fittest" prediction, the yawning chasm between the highly successful and the deeply unsuccessful widens drastically.
He points out that of the 5 million jobs created since the Great Recession (supposedly) ended in June 2009, about three-quarters pay only minimum wage or slightly above. Those positions are concentrated in the fast-food, retail and service fields; 60 percent of them are part-time. At the same time, the U. S. has more millionaires and billionaires than any other nation.
Describing the future of what he calls iWorld, Cowen writes that "being young and having no job remains stubbornly common. Wages for young people fortunate enough to get a job have gone down. Inflation-adjusted wages for young high school graduates were 11 percent higher in 2000 than they were more than a decade later, and inflation-adjusted wages of young four-year college graduates have fallen by more than 5 percent" while their unemployment rates remain stuck around 10 percent with underemployment near 20 percent.
Cowen acknowledges that "many people are seeing the erosion of their economic futures. The labor market troubles of the young are a harbinger of the new world of work to come. Lacking the right training means being shut out of opportunities like never before. At the same time, the very top earners, who often have advanced degrees, are earning much more. Average is over is the catchphrase of our age, and it is likely to apply all the more to our future."
Describing the impact of intelligent machines such as the iPhone, economic globalization and the division of the economy into very dynamic and hopelessly stagnant sectors, Cowen posits that the success of workers will depend on their computer savvy. "Are you good at working with intelligent machines or not? Are your skills a complement to the skills of the computer, or is the computer doing better without you? Worst of all, are you competing against the computer? Are computers helping people in China and India compete against you?"
Some folks, mostly "digital natives" under 45, are handling this brave new world just fine and dandy. Most others are falling by the wayside.
In an NPR interview on Thursday, Cowen’s conclusion was simplistic: Get used to it. "I think we’ll see a thinning out of the middle class," he predicted. "We’ll see a lot of individuals rising up to much greater wealth. And we’ll also see more individuals clustering in a kind of lower-middle class existence."
Although he exults over an "enormously, fantastically exciting" future, many of us strongly beg to differ. The U.S. has long touted a strong middle class as the bedrock of our economy.
After the Gilded Age faded, the Roaring ‘20s widened the rich-poor gap, followed by the Great Collapse. During World War II and the post-war era, unions provided a solid middle-class lifestyle for the majority of Americans. Riddled with abuse of power at the top, the unions were pulverized and now only 12 percent of working Americans are represented.
In Cowen’s view, "we’ll move from a country where instead of talking about the one percent, it will be the 15 percent. But there will be fewer second chances in this world, and that’s what I think will be quite difficult."
Upward mobility will be reserved for a new meritocracy "which will be oppressive and perceived as oppressive in some ways due to more rapid measurement and the requirement that the person in some way really prove himself or herself." The new world order that he glimpses would liberate people from "oppressive manufacturing jobs, or a lot of service jobs, because they’ll be done by computers. There’ll be the world’s best education available online and free."
Cowen admits that "it will be a very strange world... We will be returning to historical levels of inequality. We’ll view post-war America as a kind of strange interlude not to be repeated. It won’t be the dreams that we all had that virtually all incomes go up in lockstep at 3 percent a year. It hurts to give that up. It will mean some very real increases in economic fragility for a lot of people."
Those of us with offspring who will have to navigate the shoals of these riptides shudder at the prospect. If 85 percent of the population fails to qualify for "survival of the fittest," the next Charles Dickens or Victor Hugo will have a frighteningly rich source of material.
"Bleak House?" "Les Miserables?" Even worse. As Bachman-Turner Overdrive put it in their 1974 song, "You ain’t seen nothing yet!"
Clarence Fanto, a regular Eagle contributor, can be reached at email@example.com.