Michael Strain
Appearances
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Thank you for having me. It's great to be with you.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
It is. I think if you look at a broad range of indicators and you focus your attention on outcomes for typical workers, typical households, what you see is that hard work pays off. You see that wages and incomes are rising for typical workers and typical households. You see the economy is continuing to create new employment opportunities for typical workers.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
You see that America is still upwardly mobile and you see sure but steady progress. And so, yes, I think the economy is delivering.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Well, over the last 20 years, the wages for typical workers after adjusting for inflation have increased by 25%. And over the last 35 years, they've increased by more than 40%. So considerable increases in purchasing power. You know, not spectacular. The mission has not been accomplished. Policy should be trying to do more to increase the pace of wage growth.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
But a 25 percent increase over the last 20 years is a considerable increase in the purchasing power of wages for typical workers.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Yes, I think that's right.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
I think so. And increasingly you're hearing, you know, life was better in the 90s. And I find this to be puzzling. If you think about access to medical care, if you think about what jobs were like. When you look at some of those indicators, heart attack survival rates have doubled over the last several decades. Air travel is much safer.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
The average worker has a couple of weeks more vacation time than he or she used to. Access to education, access to cultural resources. access to information, the quality of housing, all of these indicators point to really considerable progress in the broader quality of life.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
It's hard to predict the future, but it feels like we are really on the cusp of even more rapid increases in the quality of life.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Oh, absolutely. When we set the retirement age at 65, it was, you know, the idea was you would enjoy a couple of years of retirement before you passed away. And now life expectancy is just so much longer than it was certainly in the 30s. But but even in the 70s, 80s or 90s, people are spending a whole lot of their life not working. And yet they still have income.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Households in the bottom 20% have arguably done even better in terms of their income growth than typical households. Here, we have to be careful and precisely define what we mean by income. If you think of income holistically as the flow of financial resources households receive for use in consumption or savings...
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Then you want to include transfer programs, programs like Social Security or programs like food stamps or programs like housing assistance, government transfer programs. And there, if you include government transfer programs, income growth since the early 1990s has actually been faster at the bottom than it has in the middle.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
It's mostly a story of upward economic mobility. And so if you look at the late 1960s or early 1970s and compare that to today, what you see is that, yes, the share of households earning middle incomes, defined as $35,000 to $100,000, has fallen by over 10 percentage points. But you haven't seen an increase in the share of households earning less than $35,000.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
That share actually has fallen by around 10 percentage points as well. Instead, you've seen a big increase in the share of households earning more than six figures. That share has tripled over this time period. So yes, the hollowing out of the middle has been a disruptive process, but it's mostly been a story of upward economic mobility.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
I worry about that precisely because the game is not rigged and precisely because that central moral promise of capitalism that yes, in a capitalist society, people have unequal outcomes, but those outcomes are largely driven by work effort, by choices, by risk tolerance, and by skills and talents.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
The fact that that central moral promise of capitalism holds actually means that if political leaders demotivate everybody in society or demotivate a large share of people and dim the aspirations of Americans, that will have an impact on economic outcomes.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
If you tell everybody that the game is rigged, that hard work doesn't pay off, and that there's nothing they can do to better their economic outcomes, then they may aspire to less. They may work less hard. They may dim their aspirations. And then you end up with the situation that you're concerned about, where people's wages are not growing as rapidly as we would like.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Their incomes are not growing as rapidly as we would like. There's less innovation in the economy than we would like. And so in kind of a perverse way, that populist rhetoric, that negative rhetoric can create the problems that it incorrectly argues exist.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Well, we can strengthen the American dream by calling people to their best selves, by challenging people and giving people the confidence that if they work hard and if they take risks and if they invest in themselves, that that will pay off. I think we can do some concrete things beyond those sorts of important cultural messages.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Top of the list is strengthening education, strengthening skill formation, especially for lower-income Americans. Helping them to get great educations and build their skills is probably the best thing we can do to increase their economic success. Creating policies that support education scientific research and support scientific discoveries and innovation is just absolutely crucial and critical.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Those are some very important concrete policy goals.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Many. Right now, the Trump administration is quite hostile to universities, which is the source of so much scientific research and innovation and dynamism. We need to be increasing our support for basic research. And for scientific research, not decreasing it, we need to be supporting the institutions where that research happens, not trying to damage those institutions.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
A concrete challenge on the education front is pandemic learning loss. We were set back several decades. in terms of reading scores and math scores for elementary school kids and middle school kids as a consequence of the pandemic.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Lower income Americans, kids in lower income communities and lower income schools were hit disproportionately hard by the just disastrous decision to keep classrooms closed for so long in 2021. This is a national disaster.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
emergency nobody is acting like it's a it's a national emergency and that's i think a you know a major challenge in terms of educating our kids and and helping them to have as strong of economic outcomes as possible before i ask for the three takeaways you'd like to leave the audience with today is there anything else you'd like to mention that you have not already talked about
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
So much of our current public conversation is rooted in anxiety, and that anxiety breeds nostalgia for what I would argue is largely an imagined past. That anxiety leads to a kind of zero-sum mentality where we want to put up walls around the nation and engage in commerce with other nations less. We want to put walls around the nation and welcome fewer people born abroad into America less.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Internally, we are divided against each other. And the anxiety that we feel leads us to identify enemies and try and engage in zero-sum conflict with them. I think anxiety was the natural response to the 2008 financial crisis. And we saw that anxiety increase in other nations as well. Other nations... went through their own populist spells.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Anxiety was a natural response to a once-in-a-century global pandemic. And anxiety was a natural response to the out-of-control price increases of 2021. The message I would like to leave your listeners with is that all of that is in the past, and it's time to kind of kick the dust off our sandals and walk forward, so to speak.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
We should walk forward into the future with confidence, not with anxiety, with confidence that over the past several decades, we've seen substantial improvements in economic outcomes. that things getting better is the norm, not things getting worse, that public policies have supported improvements in economic outcomes, and we don't need to throw out the playbook of the last several decades.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
We need to modify it and make it work better, but we don't need to start from scratch. And confidence that creative destruction creates as well as destroys and the dynamism ultimately makes us better off. And I think if we had more confidence in the future, the present would be better.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
The first is that the American dream is not dead. The second is that the central moral promise of capitalism holds. Hard work does pay off. People do see improvements in their economic outcomes and in their broader quality of life. America remains an upwardly mobile society. And the third is that people have agency and people can affect, for the better and for the worse, their economic outcomes.
3 Takeaways
Don’t Believe the Doom: American Workers Are Moving Up (#245)
Thank you so much for having me.