economics

According to this graphic by NPR, “truck driver” is the most common occupation in most US states:

But truck driving isn’t what it used to be. In 1980, truckers made the equivalent of $110,000 annually; today, the average trucker makes $40,000. What happened to this omnipresent American occupation?

At the Atlantic, sociologist Steve Viscelli describes his research on truckers. He took an entry level long-haul trucking job, interviewed workers, and studied its history. He found that the industry had essentially eviscerated worker pay, largely by turning truckers into independent contractors, misleading them about the benefits of this arrangement, and locking them into punitive contracts.

Viscelli argues that few truckers are fully informed as to what it means to be an independent contractor, at least at first. Trucking companies sell them on the idea that they’ll be their own boss and set their own hours, but they don’t emphasize that they will pay significantly more taxes, their own expenses, and the lease on a truck. Viscelli interviews one man who took home the equivalent of 50 cents an hour one week; another week he’d ended up owing the company $100. As independent contractors, he writes, truckers “end up working harder and earning far less than they would otherwise.”

If truckers want to get out of these contracts, the companies can hold their lease over their heads. Truckers sign a years-long contract to lease their truck along with a promise not to work for anyone else. If the contract is violated, the worker is on the hook for the entire lease. This could be tens of thousands of dollars, so the trucker can’t afford to quit. He’s no longer working, in other words, to make money; he’s just working, sometimes for years, to avoid debt.

The decimation of this once strongly middle class job is just one story among many. Add them all up — all of those occupations that no longer provide a middle class income, and the rise of lower paying jobs — and you get the shrinking of the middle class. Since 1970, fewer and fewer Americans qualify as middle income, defined as a household income that is between two-thirds of and double the median, or middle, household income.

You can see it shrink in this graphic by Deseret News using data from the Pew Research Center:

Part of the reason is that we have transitioned to an industrial economy to one that offers jobs primarily in service (low paying) and knowledge/information (high paying), but the other part is the restructuring of work to increasingly benefit owners, operators, and investors over workers. As the middle class has been shrinking, the productivity of American workers has been climbing, but the workers haven’t been the beneficiaries of their own work. Instead, employers have just been taking a larger and larger share of the value added that workers produce.

Figure from the Wall Street Journal with data from the Economic Policy Institute:

Between 1948 and 1973, productivity and wages increased at close to the same rate (97% and 91% respectively), but between 1973 and 2014, productivity has continued to climb (increasing by 72%), while wages have not (increasing by only 9%).

This is why so many Americans are struggling to stay afloat today. We’ve designed an economy that makes it ever more difficult to land in the middle class. Trucking isn’t the job it used to be, that is, because we aren’t the country we used to be.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

NPR recently aired a story about female lawmaker’s representation state by state. According to the story, Colorado has the most women; female lawmakers make up 42% of that total. Wyoming had the least, with women only representing 13% of state lawmakers.

NPR’s experts suggested that term limits in Colorado and a female-friendly party leadership were behind their high number of female legislators, whereas a change in Wyoming from multi-member to single-member district in the 1990s was unfavorable to women (because voters have to pick only one and tend to lean toward men when they have to make hard choices). The story also mentioned voting rules and the difficulty of balancing home, work, and lawmaking responsibilities.

In fact, sociologists have been studying this issue in depth for some time and a few years ago Deborah Carr summarized the reigning wisdom on why women are less likely to be politicians. She highlighted six factors to explain the gender gap in the US Congress:

1. Women have to face sexism (e.g., glass ceiling – Nancy Pelosi used the term marble ceiling in her inaugural speech as Speaker in 2007), especially voters’ sex role stereotyping “what women can and should be.”

2. Women are not in the “pipeline,” suggesting that not enough women are in careers that have historically led to political office.

3. Because of gendered wealth and income inequality, women don’t as often have enough money to run multi-dollar campaigns, nor access to social networks full of big donors.

4. Women have different interests, focusing on “issues related to family and social welfare, rather than national defense and international relations.”

5. Women are less likely to be risk-takers than their male counterparts, perhaps explaining why women must be asked several times before they seriously consider launching campaigns.

6. Women opt out of politics because of family responsibilities.

To improve female participation in politics, we should promote more gender-neural political environments. Political parties should take further steps to recruit and support female candidates, as Colorado seems to be doing. We should repeatedly encourage women to run for office since they take a lot of encouragement before they seriously consider launching candidacies. More importantly, we need to seed the pipeline by encouraging young girls to get involved in student government and see governing as compatible with their interests and abilities.

Sangyoub Park, PhD is a professor of sociology at Washburn University. His research interests include social capital, demographic trends, and post-Generation Y.  

Wealth inequality in the U.S. is extreme, but global wealth inequality, illustrates a video by The Rules, is even more stunning. Some facts:

• The top 20% control 80% of the world’s wealth.
• The richest 2% control more wealth than the bottom half of the world’s population.
• The richest 300 people on earth have more wealth than the poorest 3,000,000,000.
• 200 years ago, rich countries were three times as rich as poor countries. Today, they are eighty times richer.
• Rich countries give $130 billion dollars worth of aid to poor countries every year, but they extract $2 trillion each year thanks to global economic rules.

Here are their sources; or watch the four minute video:

The Rules wants to reveal and challenge the laws that govern our global economy. It is a distinctly sociological project, looking at how factors outside of individuals — or, in this case, countries — shape lives. Shaped strongly by the richest countries in their own best interest, rules governing the trading of goods and money are determining the economic solvency and future of countries.

When those rules are invisible, it can seem like struggling countries are just poorly managed or culturally problematic when, in fact, the rules ensure that the deck is stacked against them.

Hat tip to Martin Hart-Landsberg.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

The Numbers

• Types of Taxes as a Percent of GDP (1937-2014)
• Historical Comparison of Top Tax Brackets (1945-2010)
• Tax Receipt for 2009
• Tax Dollars and War
• “Donation” and “Welfare” States
• Where Did Your 2009, 2013, and 2014 Taxes Go?

Some History

• Fluctuations in Top Tax Rates: 1910 to Today
• Raising Top Tax Rates Does Not Harm the Economy

The Winners and the Losers

• Politics, Discourse, and the Real Tax Rate on the Rich and the Poor
• Recent Trends in US Income Inequality and the Tax Rate (1990-2010)
• Social Class and the Tax Burden
• Corporate Tricks of the Trade
• Mitt Romney and the 47% Meme
• How the Wealthy Design the Tax Code to Suit Themselves
• The Case for Raising Taxes
• Apple’s Tax Bill Rising Much Slower than Its Profits
• Who Benefited from the Bush Tax Cuts?

Tax Cultures

• U.S. Tax Rates in Comparative Perspective (pictured)
• Income Tax as a Patriotic Duty
• Collecting Taxes in Pakistan
• Danish vs. American Attitudes Towards Taxes
• TurboTax Maps Out a (Conventional) Future

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

One of the concerns of environmental sociologists is the way that harm is unequally distributed. The way, for example, that poor people and people of color are more likely to live with high levels of lead, near toxic release facilities, with bad air quality, and in the paths of airborne pesticides.

I thought of this research when I saw Time‘s 1-minute illustration of the rise of earthquakes in Oklahoma. To sum, thanks to the particular type of oil drilling done there, the state is now “one of the most seismic places on the planet.” There were 21 earthquakes in 2005. In 2015, there were 5,957. Nine hundred of these were magnitude 3 or higher.

Click here to watch the video.

I am trying to imagine what would happen if an industry caused almost 6,000 extra earthquakes annually (and growing) in or near a city America cared about. I’ve lived in Los Angeles and New York and, I can’t be sure but, I suspect politicians there might be quicker to interfere with business practices. And, if they weren’t, the political power of residents of those cities might force them to.

“But it’s just Oklahoma,” is apparently the refrain. Who cares if the oil companies’ saltwater disposal wells are causing the houses of hillbillies to shake? Apparently Okies don’t have anything — aren’t anybody — worth protecting. At least, not over the rights of corporations.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

When you travel, the option to stay in a private home instead of a hotel might seem like a nice idea. Your experience of the city might be a little more authentic, maybe you’ll meet a local, and you can keep your money out of the hands of giant corporations. It’s a tiny way to fight the shrinking of the middle class.

These options, though, may not be a panacea. After discovering that his Brooklyn neighborhood had 1,500 listings on Airbnb, Murray Cox decided to take a closer look. How many residences now invite tourists? How small scale were the profits? Did the money really go to locals?

New Orleans wanted to know the answers to these questions, too. The city has been hit by what nola.com reporter Robert McClendon calls a “Airbnb gold rush.” It turns out the city currently has about 2,600 rentals on Airbnb, plus another 1,000 or so on VRBO.com. This has sparked a heated debate among residents, business owners, and politicians about the future of the practice.

So, Cox jumped in to give us the data and figure out where the money is going.

Are Airbnb hosts living in the spaces they rent?

Cox found that they generally are not. Only 34% of rentals are for rooms or shared rooms; 66% of listings are for an entire home or apartment. More than two-thirds (69%) are rented year-round. Almost half of all hosts operate at least two rentals.

These numbers suggest that your modal Airbnb host doesn’t live in the home they rent out. Some may actually live in another city altogether. Others are using Airbnb as an investment opportunity, buying homes and turning them into full time rentals.

What’s the downside?

Locals are complaining about deterioration in the feeling of community in their neighborhoods. It’s difficult to make friends with your neighbors when they turn over twice a week. Tourists are also more likely than locals to come home drunk and disorderly, disturbing the peace and quiet.

And they are pricing people who actually live in New Orleans out of the rental market. Short-term renting offers owners the opportunity to make four or five times the amount of money they could make with a long-term tenant, so it’s an economic no-brainer to sign up for Airbnb. But, as more and more people do so, there are fewer and fewer places for locals to live and so the supply-and-demand curve increasingly favors owners who can jack up long-term rental prices.

So, when you give your money to an Airbnb host in New Orleans or elsewhere, you might be giving some extra money to a local, but you might also be harming the residential neighborhoods you enjoy and the long-term viability of local life.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

Yep. Economics majors are more anti-social than non-econ majors. And taking econ classes also makes people more anti-social than they were before. It turns out, there’s quite a bit of research on this, nicely summarized here.  Econ majors are less likely to share, less generous to the needy, and more likely to cheat, lie, and steal.

In one study, for example, economists Yoram Bauman and Elaina Rose noted the consistent finding that econ majors were less generous and asked whether the effect was do to selection (people who are anti-social choose to take econ classes) or indoctrination (taking econ classes makes one more anti-social). They found that both play a role.

Students at their institution — University of Washington — were asked at registration each semester if they’d like to donate to WashPIRG (a left-leaning public interest group) and ATN (a non-partisan group that lobbies to reduce tuition rates).  Bauman and Elaina crunched the data along with students’ chosen majors and classes. They found that econ majors were less likely to donate to either cause (the selection hypothesis) and that non-econ majors who had taken econ classes were less likely to donate than non-majors who hadn’t (the indoctrination hypothesis).

What should we make of these findings?

Sociologist Amitai Etzioni takes a stab at an answer. He argues that neoclassical economics isn’t a problem in itself. Instead, the problem may be that there are no “balancing” classes, ones that present a different kind of economics. In other part of the academy, he argues — specifying social philosophy, political science, and sociology– there is “a great variety of approaches are advanced, thereby leaving students with a consolidated debasing exposure and a cacophony of conflicting pro-social views.”

Being exposed to a variety of views, including ones that question the premises of neoclassical economics, may be one way to make economists more honest and kind. And doing so isn’t just about sticking one to econ, it’s an issue of grave seriousness, as the criminal and immoral behavior of our financial leaders is exactly what triggered a Great Recession once… and could again.

Cross-posted at Pacific Standard.

Lisa Wade, PhD is an Associate Professor at Tulane University. She is the author of American Hookup, a book about college sexual culture; a textbook about gender; and a forthcoming introductory text: Terrible Magnificent Sociology. You can follow her on Twitter and Instagram.

It seems certain that the political economy textbooks of the future will include a chapter on the experience of Greece in 2015.

On July 5, 2015, the people of Greece overwhelmingly voted “NO” to the austerity ultimatum demanded by what is colloquially being called the Troika, the three institutions that have the power to shape Greece’s future: the European Commission, the International Monetary Fund, and the European Central Bank.

The people of Greece have stood up for the rights of working people everywhere.

Background

Greece has experienced six consecutive years of recession and the social costs have been enormous.  The following charts provide only the barest glimpse into the human suffering:

While the Troika has been eager to blame this outcome on the bungling and dishonesty of successive Greek governments and even the Greek people, the fact is that it is Troika policies that are primarily responsible. In broad brush, Greece grew rapidly over the 2000s in large part thanks to government borrowing, especially from French and German banks.  When the global financial crisis hit in late 2008, Greece was quickly thrown into recession and the Greek government found its revenue in steep decline and its ability to borrow sharply limited. By 2010, without its own national currency, it faced bankruptcy.

Enter the Troika. In 2010, they penned the first bailout agreement with the Greek government. The Greek government received new loans in exchange for its acceptance of austerity policies and monitoring by the IMF. Most of the new money went back out of the country, largely to its bank creditors. And the massive cuts in public spending deepened the country’s recession.

By 2011 it had become clear that the Troika’s policies were self-defeating. The deeper recession further reduced tax revenues, making it harder for the Greek government to pay its debts. Thus in 2012 the Troika again extended loans to the Greek government as part of a second bailout which included . . . wait for it . . . yet new austerity measures.

Not surprisingly, the outcome was more of the same. By then, French and German banks were off the hook. It was now the European governments and the International Monetary Fund that worried about repayment. And the Greek economy continued its downward ascent.

Significantly, in 2012, IMF staff acknowledged that the its support for austerity in 2010 was a mistake. Simply put, if you ask a government to cut spending during a period of recession you will only worsen the recession. And a country in recession will not be able to pay its debts. It was a pretty clear and obvious conclusion.

But, significantly, this acknowledgement did little to change Troika policies toward Greece.

By the end of 2014, the Greek people were fed up. Their government had done most of what was demanded of it and yet the economy continued to worsen and the country was deeper in debt than it had been at the start of the bailouts. And, once again, the Greek government was unable to make its debt payments without access to new loans. So, in January 2015 they elected a left wing, radical party known as Syriza because of the party’s commitment to negotiate a new understanding with the Troika, one that would enable the country to return to growth, which meant an end to austerity and debt relief.

Syriza entered the negotiations hopeful that the lessons of the past had been learned. But no, the Troika refused all additional financial support unless Greece agreed to implement yet another round of austerity. What started out as negotiations quickly turned into a one way scolding. The Troika continued to demand significant cuts in public spending to boost Greek government revenue for debt repayment. Greece eventually won a compromise that limited the size of the primary surplus required, but when they proposed achieving it by tax increases on corporations and the wealthy rather than spending cuts, they were rebuffed, principally by the IMF.

The Troika demanded cuts in pensions, again to reduce government spending. When Greece countered with an offer to boost contributions rather than slash the benefits going to those at the bottom of the income distribution, they were again rebuffed. On and on it went. Even the previous head of the IMF penned an intervention warning that the IMF was in danger of repeating its past mistakes, but to no avail.

Finally on June 25, the Troika made its final offer. It would provide additional funds to Greece, enough to enable it to make its debt payments over the next five months in exchange for more austerity.  However, as the Greek government recognized, this would just be “kicking the can down the road.” In five months the country would again be forced to ask for more money and accept more austerity. No wonder the Greek Prime Minister announced he was done, that he would take this offer to the Greek people with a recommendation of a “NO” vote.

The Referendum

Almost immediately after the Greek government announced its plans for a referendum, the leaders of the Troika intervened in the Greek debate. For example, as the New York Times reported:

By long-established diplomatic tradition, leaders and international institutions do not meddle in the domestic politics of other countries. But under cover of a referendum in which the rest of Europe has a clear stake, European leaders who have found [Greece Prime Minister] Tsipras difficult to deal with have been clear about the outcome they prefer.

Many are openly opposing him on the referendum, which could very possibly make way for a new government and a new approach to finding a compromise. The situation in Greece, analysts said, is not the first time that European politics have crossed borders, but it is the most open instance and the one with the greatest potential effect so far on European unity…

Martin Schulz, a German who is president of the European Parliament, offered at one point to travel to Greece to campaign for the “yes” forces, those in favor of taking a deal along the lines offered by the
creditors.

On Thursday, Mr. Schulz was on television making clear that he had little regard for Mr. Tsipras and his government. “We will help the Greek people but most certainly not the government,” he said.

European leaders actively worked to distort the terms of the referendum. Greeks were voting on whether to accept or reject Troika austerity policies yet the Troika leaders falsely claimed the vote was on whether Greece should remain in the Eurozone. In fact, there is no mechanism for kicking a country out of the Eurozone and the Greek government was always clear that it was not seeking to leave the zone.

Having whipped up popular fears of an end to the euro, some Greeks began talking their money out of the banks. On June 28, the European Central Bank then took the aggressive step of limiting its support to the Greek financial system.

This was a very significant and highly political step. Eurozone governments do not print their own money or control their own monetary systems. The European Central Bank is in charge of regional monetary policy and is duty bound to support the stability of the region’s financial system. By limiting its support for Greek banks it forced the Greek government to limit withdrawals which only worsened economic conditions and heightened fears about an economic collapse. This was, as reported by the New York Times, a clear attempt to influence the vote, one might even say an act of economic terrorism:    

Some experts say the timing of the European Central Bank action in capping emergency funding to Greek banks this week appeared to be part of a campaign to influence voters.

“I don’t see how anybody can believe that the timing of this was coincidence,” said Mark Weisbrot, an economist and a co-director of the Center for Economic and Policy Research in Washington. “When you restrict the flow of cash enough to close the banks during the week of a referendum, this is a very deliberate move to scare people.”

Then on July 2, three days before the referendum, an IMF staff report on Greece was made public. Echos of 2010, the report made clear that Troika austerity demands were counterproductive. Greece needed massive new loans and debt forgiveness. The Bruegel Institute, a European think tank, offered a summary and analysis of the report, concluding that “the creditors negotiated with Greece in bad faith” and used “indefensible economic logic.”

The leaders of the Troika were insisting on policies that the IMF’s own staff viewed as misguided.  Moreover, as noted above, European leaders desperately but unsuccessfully tried to kill the report. Only one conclusion is possible: the negotiations were a sham.

The Troika’s goals were political: they wanted to destroy the leftist, radical Syriza because it represented a threat to a status quo in which working people suffer to generate profits for the region’s leading corporations. It apparently didn’t matter to them that what they were demanding was disastrous for the people of Greece. In fact, quite the opposite was likely true: punishing Greece was part of their plan to ensure that voters would reject insurgent movements in other countries, especially Spain.

The Vote

And despite, or perhaps because of all of the interventions and threats highlighted above, the Greek people stood firm. As the headlines of a Bloomberg news story proclaimed: “Varoufakis: Greeks Said ‘No’ to Five Years of Hypocrisy.”

The Greek vote was a huge victory for working people everywhere.

Now, we need to learn the lessons of this experience. Among the most important are: those who speak for dominant capitalist interests are not to be trusted. Our strength is in organization and collective action. Our efforts can shape alternatives.

Cross-posted at Reports from the Economic Front.

Martin Hart-Landsberg is a professor of economics at Lewis and Clark College. You can follow him at Reports from the Economic Front.