Manufacturing is a target because it's easy for people to see concrete results. They can point at something and say, "we made that", and it tends to generate some sense of pride. The same doesn't really apply for service industries or innovation in the service industries: "we produced consumer surplus by lowering transportation costs via automation" doesn't roll off the tongue as well. :)
The same problem exists for creating software. Massive software projects tend to be unimpressive to people not familiar with the IT industry because they don't comprehend the scale or fundamental difficulties in computer science that were overcome to accomplish something.
Compare airplanes and wifi on airplanes. Most people are impressed by an A380, but they couldn't give two shits about the incredible technology behind offering wifi 5 miles above the Atlantic ocean at 700MPH ground speed. They just trivialize it by saying, "yeah, it comes from that little radio".
Manufacturing also provides jobs for both high and low skill workers. As such can be seen as more valuable to a community than say, a software company that only hires engineers and a CS center in a different state. Manufacturing was one of the best roads for a low skill worker to earn good money and move up the rung economically - something that only seems to be getting harder as time goes on.
You make a very important point with regards to manufacturing providing jobs for both high and low skill workers. I would add that it can also be a very good way to go from being a low skill worker to becoming a high skill worker on the job, meaning that you are being paid while improving your skills. If you're already poor and don't have any particular skills, it can be extremely difficult to improve upon your situation while trying to make enough money to survive. Many times additional schooling, either at the college/university or trade school/community college level, are out of reach, or at least made much more difficult, once you've already worked a 40-50 hour week.
I work as a technician in aerospace and when I started I had zero experience in this type of manufacturing environment. If I hadn't gotten the opportunity to improve upon my skills while on the job I would most likely still be stuck in a much lower paid and less satisfactory low end retail or service job.
Definitely, the on-the-job training aspect of a manufacturing job is huge, and there's just so much knowledge that's hard to pass on in a set of standards and best practices. Agreed on all points about skill development & continued education when you're poor. It strikes me as one of the harder problems to fix when it comes to mobility/inequality as the economy changes.
You sound a lot like me professionally haha. I had the same level of experience when I started at the EMS provider I'm with, just doing CAD library stuff and learning as much as I could when requests were light. Graduated to helping out with bits of full board designs like routing/placement, then graduated to full boards eventually. Having both a design team and SMT lines in the back to learn from is invaluable experience that's hard to recreate.
It may seem to be getting harder, but in reality it's not. Rank based measures of mobility are stable. Since income inequality is up, absolute mobility has also increased.
Interesting paper. It actually concludes that reasonable seeming (IMO) definitions of mobility give different results on the question of whether mobility has increased or decreased (or stayed the same) since the 70s.
"Based on all of these measures, we find that children entering the labor market today have the same chances of moving up in the income distribution (relative to their parents) as children born in the 1970s.
"Although these rank-based measures of mobility have remained stable, income inequality increased over time in our sample, consistent with prior work. Hence, the consequences of the "birth lottery"---the parents to whom a child is born---are larger today than in the past. A useful visual analogy is to envision the income distribution as a ladder, with each percentile representing a different rung. The rungs of the ladder have grown further apart (inequality has increased), but children’s chances of climbing from lower to higher rungs have not changed (rank-based mobility has remained stable).
...
"Together, these two facts can be used to construct various measures of mobility. For example, if one defines mobility based on relative positions in the income distribution---e.g., a child’s prospects of rising from the bottom to the top quintile---then intergenerational mobility has remained unchanged in recent decades. If instead one defines mobility based on the probability that a child from a low-income family (e.g., the bottom 20 percent) reaches a fixed upper-income threshold (e.g., $100,000), then mobility has increased because of the increase in inequality. However, the increase in inequality has also magnified the difference in expected incomes between children born to low- (e.g., bottom-quintile) versus high- (top-quintile) income families. In this sense, mobility has fallen because a child’s income depends more heavily on her parents’ position in the income distribution today than in the past."
"When compared to 24 middle-income and high income countries, the U.S. ranks 16th in the amount of inter-generational earnings mobility. The relatively low level of mobility in the U.S. may arise in part because low-income children in the U.S. tend to have less stable and lower-income families, less secure families, and parents who have less time to devote to their children."
"However, the increase in inequality has also magnified the difference in expected incomes between children born to low-(e.g., bottom-quintile) versus high-(top-quintile) income families. In this sense, mobility has fallen because a child’s income depends more heavily on her parents’ position in the income distribution today than in the past.
Since the appropriate definition of inter-generational mobility depends upon one’s normative objective, we characterize the copula and marginal distributions separately in this paper."
It would appear we have different normative objectives.
No, the result of increased wealth inequality, even if you maintained the same level of social mobility, will worsen not improve situation. The description of a rise in absolute mobility would be a misunderstanding of the issue.
If that is too theoretic, consider the analogy of a lottery where one group of children win automatically and an other group has say a 10% chance of winning during their life. Increasing the prize (i.e. a rise in inequity among classes) serves only to worsens the situation not only for the median and average members but the vast bulk of the lower class since those who don't rise (the vast majority) are now even worse off relatively.
Or indeed by your logic simply raising the salary of a CEO by a massive amount also raises the "absolute mobility" of all other employees
So unless mobility also raises by at least a corresponding amount, any worsening of inequality at birth will only worsen the situation by every meaningful standard. And even then it is probably a bad idea.
Or indeed by your logic simply raising the salary of a CEO by a massive amount also raises the "absolute mobility" of all other employees
Yes. If I had a 1% chance of being the CEO and having my income go from $100k to $1M, my expected payoff was $900k x 1% = $9k. If my income stays at $100k but the CEO income goes to $10M, and my odds of being the CEO stay at 1%, my expected payoff is $9.9M x 1% = 99k.
My situation has not been worsened and has a possibility of being improved.
You seem to think it somehow makes me worse off if my CEO makes more money. Can you explain? Note that I'm not a person prone to envy.
Or by that logic you could cut your pay from $100K to $1K and give your CEO $10M and be just as happy. There are plenty of people who live on $1K a year after all.
Although in the CEO's case, often no further harm is done, if half of a population has a massive increase in wealth while the other half does not then then poorer half must compete for limited resources with a group that will not only drive prices up but can now purchase assets as a form of rent seeking. So in fact, greater inequality acts as currency devaluation for the disadvantaged group.
The CEO example was not meant to cause unjustified envy but to show that according to your logic, instead of ever giving employees a raise you could simply give all raises to the CEO and tell employees that by cost benefit analysis the effect is the same, that they are better off.
To put it concretely, from now on, every time you ask for a raise just ask that your boss get that extra compensation instead. I think you will find the effect is not remotely the same.
Or from now on, ask for all of your pay check that exceeds poverty line for chances at a completely fair trillion dollar lottery.
Simple cost benefit multiplication is being erroneously applied in these cases (and often is)
if half of a population has a massive increase in wealth while the other half does not then then poorer half must compete for limited resources
You are not discussing an increase in wealth at all. You are discussing a situation of declining or fixed wealth and monetary inflation. They aren't the same thing.
I agree that we should try to avoid declines in wealth. Luckily wealth has only increased in the US and globally, for folks at the bottom and the top.
Everything I said is unchanged if you replace income with utility(income).
No it does not. If you received no utility for your work but instead a 1:1000,000 chance of a million incomes, you would starve to death. The math you are using does not describe reality and rational people, since about Galileo anyway, have known better than to insist on broken models.
There is a reason people are willing to buy $1 lottery tickets but not $1000 tickets. (hint: a certainty of misery or high chance of death is not compensated by a remote chance of enormous wealth of ever decreasing marginal utility)
You are simply misunderstanding the use cost benefit, I assume because it clashes with some ideological point.
But if you want to buy a one in a million chance for a trillion dollars, I have a bitcoin address you could send a million bucks too.
The math you are using does not describe reality and rational people, since about Galileo anyway, have known better than to insist on broken models.
First of all, it's a textbook exercise in topology to show that any rational decision process must have a utility function (at least for a countably infinite set of choices).
Let me repeat the statement for utility functions. Suppose I have a 1% chance of being CEO and increasing my utility to U(CEO pay) - U(my pay). Suppose this increases to U(10x CEO pay) - U(my pay).
It's simple arithmetic that 0.01 x U(10X CEO pay) + 0.99 x U(my pay) > 0.01 x U(CEO pay) + 0.99 x U(my pay).
Rearranging the arithmetic, this is merely the statement that U(10X CEO pay) > U(CEO pay) - i.e. I'll be happier as a CEO with 10M than with 1M. Do you disagree with this statement?
Define "unskilled". I would say that even if software developer does not have a degree he or she still needs to be quite smart.
Now imagine typical blue collar worker having IQ below 100, who dropped from high school (as they often do) learning advanced technical concepts like network protocols, dozen of JS frameworks, not to mention higher order functions and macros.
That's the issue with technical advancements: there are more and more jobs for people with high IQ and vast knowledge, and less and less jobs for people who can only work with their muscles, not brains.
> Now imagine typical blue collar worker having IQ below 100
I, quite honestly, really struggle to imagine this person. As someone involved in the agriculture industry, I see a lot of blue collar people. They all seem quite intelligent and capable to me. Some I could consider absolute geniuses. Save a small group who have real crippling disabilities, I'm not sure I have ever met a person who I think would struggle with those technical concepts.
It's a time commitment, for sure, but not a particularly difficult undertaking. What I have observed over the years are numerous people who think that this kind of technical work would be an awful way to make a living. That's the real barrier to entry. It is difficult to put in the necessary time when you get absolutely no enjoyment out of it, as difficult as that is for me – and I expect everyone else around here – to understand.
Or maybe I've just lived a sheltered life. The high school completion rate where I live is about 90%, so these people who you say can be identified as high school dropouts are not particularly common to begin with.
This. I've worked with plenty of smart uneducated people. In the army and various industries I've been around (trucking, manufacturing) there are plenty of knuckleheads but also a surprising number of very smart people for whom the education system either wasn't a fit or an option.
Not all "Blue" collar jobs are unskilled and some do require intelligence for example an experienced machinist or technician may know as much if not more than the "Profesional"
But even there the trend is towards making the "blue collar" machinist a mere button pusher & tool bit changer while the machining process is planned and the machine programmed elsewhere. Perhaps by a former machinist now sitting in an office. I can only imagine it going more and more in this direction with improved CAD & CAM tools that enable people without any machining experience to program the machines. I don't have a problem with this development.
It can be quite a depressing sight to take a tour at the machine shop floor where machinists sit next to their CNC machines, maybe wiping coolant off of pieces and putting them in boxes, maybe just reading a comic..
I've seen many people work their way up within IT from help desk to sysadmin to ops to management to CIO. Some successfully transition into development. Manufacturing doesn't have the monopoly on on-the-job skill-driven mobility.
The same problem exists for creating software. Massive software projects tend to be unimpressive to people not familiar with the IT industry because they don't comprehend the scale or fundamental difficulties in computer science that were overcome to accomplish something.
Compare airplanes and wifi on airplanes. Most people are impressed by an A380, but they couldn't give two shits about the incredible technology behind offering wifi 5 miles above the Atlantic ocean at 700MPH ground speed. They just trivialize it by saying, "yeah, it comes from that little radio".