From slavery to six figures
In the 1950s, when cotton was still king in Texas, picking it was a common form of casual employment. Cotton-pickers were paid by weight, and though the gin had long since mechanized the process of seeding cotton, bringing the bolls in was still done in the ancient fashion: by hand and burlap sack. Children getting out of school, men and women finishing their regular jobs in the afternoon, and otherwise unoccupied people would make a little extra money picking cotton, and in other seasons they would harvest pecans or other crops.
These were not, it should be noted, remarkably poor people. They would seem poor to us, but they were the lucky kind of poor: mid-century rural Americans who did not regard themselves as poor. One of the remarkable features about farm-town Americans of that generation is that there seems to have been relatively little socio-economic self-comparison — with the exception of a few “uptown people,” most everybody they knew lived more or less the same way. Do not mistake this for an idyll: Rural life in the 1950s is romanticized only by people who did not endure it. When I speak to men of my father’s generation, they sometimes laugh about the conditions in which they grew up — no shoes in the summer, no running water in the home, etc. — and they shake their heads in wonderment at how much things have changed in the course of their lifetimes. They speak less often of the brothers and sisters who never made it to adulthood. Too much is made of the residual stoicism of the children of the Depression, but this much is true: They do not take their comforts for granted.
Only 100 years before the opening of that great symbol of postwar modernity, the Astrodome, cotton-picking was work performed mostly by slaves. White people, even poor rural white people, did not pick a lot of cotton. Cotton-picking was reserved to the lowest of the low, to a despised caste of human beings who were not even considered human beings. Then there was a fundamental restructuring in the labor market for cotton-picking, in no small part the result of events at Gettysburg and Appomattox.
Beginning in the 1950s, there was a second radical restructuring in the labor market for cotton-picking, this one the result of massive investment in capital. The first mechanical cotton-strippers began to appear on Texas farms in the 1950s. Today, one cotton farmer with a high-tech harvester can by himself work extensive tracts of land. The work that once demanded hundreds of slaves or laborers today can be done by one or two specialists. In the cotton-farming regions in West Texas, it is not unusual to meet a farmer in possession of several combines, each of which costs about as much as a mid-range Ferrari, contracting out his harvesting services to a number of landowners in exchange for a percentage of the crop’s profits. Which is to say, they are sharecroppers — but being a sharecropper isn’t what it used to be.
Cotton-farming is a famously fickle business, reliant upon unpredictable fluctuations in the weather and global markets, but the better 21st-century sharecroppers can do very well for themselves, with incomes into the six figures. If you happen to visit a John Deere dealership, you might be surprised by how many of the older gentlemen inspecting the new wares there are millionaires. Cotton money does not usually act like Wall Street money, though I do know of one farmboy who goes booming down dusty farm-to-market roads in a Maserati.
It is a remarkable evolution: In 100 years, cotton-picking went from being a job for slaves to being a job for the rural working class, and in the next 50 years became a job that produces a highly desirable income. Same work — picking cotton — but a dramatically different wage. This does not have to do with the value of cotton: Cotton prices are very high just at the moment, but adjusted for inflation they are less than what they were in 1810. Cotton-picking wages have climbed radically while the value of the crop itself has mostly declined. Cotton-harvesting employs far fewer people than it once did, but I do not suspect that many Americans, even unemployed ones, are eager to pick cotton in the 1950s fashion for a 1950s wage.
The question, then, as unemployment remains high and wages stagnate: How do we make America into a nation of sharecroppers? How do we use capital to multiply the value of American labor, particularly for those workers who are not well situated to compete in a global market in which raw, unspecialized labor in many cases provides a standard of living inferior to that provided by the American welfare state?
Investment in physical capital and innovation certainly is one critical factor, and it has shaped the growth of wages in many occupations. Consumer-goods companies that used to employ vast sales forces to service wholesale customers now do so with inventory-management networks administered by a few highly paid nerds. At your local newspaper, one graphic artist today does the work of 20 men: compositors, paste-up artists, press-plate makers, and typesetters. And while large gains in per capita productivity have been associated in many industries with reductions in the total number of workers employed — The robots are taking our jobs! — that is not always the case. A nurse today enjoys much higher wages than a nurse did a generation ago, again because of the force-multiplier of capital, but the number of nursing jobs has grown. Digital document-processing has made lawyers and pharmacists considerably more efficient at their work, but few of them are unemployed.
That leads us to our second important variable: tradability. American farmers cannot offshore their cotton-picking to a low-wage jurisdiction, though in some parts of the agricultural business that fact is made moot by the importation of illegal labor from low-wage jurisdictions, in essence offshoring within our own shores. In general, nontradable sectors are heavily insulated from globalization: Nurses, lawyers, pharmacists, retail workers, and those in the construction trades do not compete much with offshore labor, because their jobs mostly have to be done in a particular place.
The ultimate nontradable job is government work: Our bureaucracies may not do much, and what they do may be of questionable value, but whatever it is they do, they do here. (National Review contributor Conrad Black is too fond of FDR and the WPA, but say this for those old-school public-works projects: Every now and then, we got something for our money.) Tradability underlies the paradox explored at some length by the economists A. Michael Spence and Sandile Hlatshwayo in their much-remarked-upon paper, “The Evolving Structure of the American Economy and the Employment Challenge,” published in March and expertly illuminated for readers of this magazine by Reihan Salam in the last issue. The authors found that while practically all of the productivity gains in the past decades have been in the tradable sector, all of the job growth has been in the nontradable sector. As a practical matter, that means that while the broad economy has made significant gains in productivity, the job growth has been in the less efficient sectors of the economy. Practically all of the growth has been in health care and government, which are not really two separate sectors but are complexly entwined. Spending on health care and government already is putting severe stress on the American economy — left unreformed, Medicare and Medicaid will bankrupt us — so it is improbable that there will be much new job growth there, either: Even if the demand were there (and I am not sure that anybody really wants a marginal IRS agent or deputy assistant undersecretary of health or senior associate community-relations public-information officer), there simply is not the money for it.
This brings up the uncomfortable fact that the public sector presently serves as a supplementary welfare state. For a person of average intelligence and the endurance to muddle through at the local community college, the surest route from real poverty to the middle class is a government job. And it’s not just welfare for the poor: For the middle-class person of modest ability, government work offers above-market compensation and glorious shelter from the Darwinian competition of the global marketplace.
While there is no shortage of anecdotal evidence that government work attracts disproportionately those not endowed to thrive in more competitive markets (you have visited your local department of motor vehicles?), there is hard evidence, too. High-school seniors who intend to major in education come largely from the bottom third of the SAT distribution, and, while many of them will not become accredited teachers, those who do are a scarcely more impressive bunch: The average SAT verbal and math scores of students who pass accreditation exams to become elementary-school teachers is just over 500 in each category. The average SAT math score for students who pass exams to become math teachers is under 600. (If you are curious about the effect of affirmative action, the SAT math and verbal scores of black and Hispanic students who pass their teacher exams are less than 500 in each category.) At the University of Texas at Austin in 2009, freshmen entering as engineering or architecture majors scored on average more than 200 points higher than those entering as education majors, who lagged behind every cohort on campus except nursing students, whom they edged out by only a few points (something to ponder as government and health care become more deeply conjoined). Government workers in non-credentialed positions very likely are even lower achieving.
As the ratchet of financial reality forces us to reduce the relative size of the public sector, this supplementary welfare state will not absorb all it has absorbed in the past. Those workers once destined for government jobs will hit the private labor market, and they will be poorly prepared to compete in it. We will have to do something about that.
It is not likely, given economic realities and the reliably dysfunctional character of American government institutions, that a larger or more efficiently run welfare state will absorb them. But even if we could afford it and wished it, high levels of full or partial welfare-state dependency are in and of themselves destructive; the dollar cost of the welfare state is not its only cost. A society in which a significantly large population lives at the expense of another is not destined to be stable or peaceable. Beyond politics, there is a human price at the bottom of it all: For the man who wants to work and earn a living — and I use the sex-specific form with intent — there is a specific and concentrated sort of despair in unemployment, instantly recognizable to anybody who has experienced it. For the talented, skilled, or highly educated, long-term unemployment is a relatively remote prospect. But that is not the case for a great number of Americans.
I can think of no gentle way to write this: People of modest intellectual ability are the biggest part of the unemployment problem. Most people are of approximately average intelligence, and, as the joke reminds us, half of us are of below-average intelligence. But the people who make policy are more or less uniformly members of what Charles Murray called the “cognitive elite,” high-performing, high-g people of precisely the sort who are equipped to thrive in a highly competitive global marketplace marked by instantaneous flows of capital and globally integrated supply chains. I suspect this is why practically every employment-policy proposal I can remember having read is dedicated to the subject either of how to get more poor people into Ivy League law schools (the liberal program) or of how to convert them into successful entrepreneurs (the conservative program), as though the only models for advancement in American life were Clarence Thomas and George Jefferson. Once we set aside the elected officials and the television entertainers, the political debate in the United States is largely an intramural dispute between two factions of the same high-IQ class, which is largely blind (probably willfully so) to the narrowness of its own class interests. The cognitive elite is practically alone in its libertarian attitude toward immigration, for instance, and still it has its way. The black underclass is avid for reform of the public schools (while middle-class white homeschoolers have checked out of the system entirely), but reform never comes, because for the people who have the power to make reform happen, “public schools” are a happy abstraction to be defended on democratic principle, not a grotesque reality to be survived.
But the fellow making $100K+ picking cotton in Texas is not Stephen Hawking — and neither is he Forrest Gump. He’s a regular guy doing a job that regular people can do, and making a very good living at it. Likewise, there is real money to be made in providing high-value-added goods and services that do not require a master’s degree to produce — we live in the age of the celebrity butcher, one in which the most successful sales associates at Neiman Marcus can command six-figure salaries. (Yes, both of those examples entail providing high-end goods to the wealthy. But if we are going to have some redistribution of wealth, isn’t that the ideal model?) So, let’s have some more of that. But how?
Neo-Malthusians like my friend John Derbyshire worry that we do not have enough work for our population to do. This is exactly backward: Almost all people have valuable labor to contribute to the economy. The list of things that I would rather have other people do for me is very long: clean my home, do my laundry, shop for my groceries, keep my calendar, answer my telephone, organize my bills, etc. Would I like a personal assistant? Are you kidding? It is only republican manners that keep me from contemplating a punkawallah in the hellish New York summer. Labor is valuable — but price matters.
Another way of saying that is: Productivity matters. No 19th-century cotton planter was going to spend $150,000 per capita per annum maintaining his slaves. No 20th-century cotton planter was going to spend $150,000 per capita per annum paying hundreds of laborers to pick his crop. But a 21st-century cotton-picker may very well earn that. Labor gets a say, too: I would not much like to work cleaning hotel rooms. But if cleaning hotel rooms paid $1,000 a day, it would be attractive supplemental work.
Our politicians talk a lot — far too much, in fact — about creating jobs, saving jobs, protecting jobs, and jobs’ going overseas. But it is foolish to try to create jobs. To create a job is to create an expense, not value. We could create many thousands of jobs in agriculture tomorrow by seizing everything painted John Deere green and dismantling it. But the spectacle of Americans returning to the fields to pick cotton by hand is not one I hope to see. No company really wants to create 1,000 jobs. It is only when the marginal worker creates more value in output than he consumes in compensation that he is hired.
But as the tradable-nontradable divergence shows, overall productivity is not all that matters. In fact, the very efficiency of globally integrated supply chains ensures that low-skilled American workers will increasingly compete head-to-head against low-skilled workers overseas, even when most of the value-added for a particular good is added in the United States. True, it is more lucrative to be the guy in Silicon Valley who designs the iPod than the guy in China who puts the parts together — but there are many American workers who are not suited to becoming high-end electronics designers and who cannot be educated into it. There are limits on the development of human capital. And so we are stuck.
Conservatives spend a good deal of time thinking about how to please the middle class, but there is an element of cynicism to that. What conservatives want to do is to enact the conservative agenda, and political realities make it profitable to bring the middle class along — pretending to give them a ride when we were going that way, anyway. Sometimes conservatism will serve the interests of the middle class, and sometimes it will not — but almost always, it will be presented in terms of middle-class interests. (Which is fair enough; American conservatism, unlike its European cousins, is a middle-class philosophy.) But it is not the established middle class that most needs our assistance — it is the poor. The right-hand side of the socio-economic bell curve can mostly take care of itself — during the worst of the financial crisis, the unemployment rate for college graduates never hit 6 percent; the rate for high-school dropouts topped 15 percent, and the rate for recent dropouts runs over 40 percent. Our public policy ought not so much to be directed at cultivating the next Google or the next Pfizer — politicians have no ability to do that, anyway — but at maximizing the value of Americans’ labor.
Unfortunately, conservatives do not have a lot of convincing ideas on that front. (Neither do liberals. Neither does anybody.) There are a great many things that conservatives already want to do — improving the tax and regulatory environment, reforming education to allow people not inclined toward becoming liberal-arts weenies to do something rewarding with their labor, maximizing the flexibility of domestic labor while ceasing to flood the lower end of the market with unskilled immigrants — that probably would help the poor. (And by “poor,” I mean the people we’ve come to call the “working poor,” people who have the ability and inclination to hold regular employment. The class of chronic welfare-state dependents is a different problem, and in some ways an easier one to manage.) And the repeal of Obamacare would open up at least the possibility of reversing the merger of state and medicine in such a way that large productivity gains might be had in the field of health care, which, combined with an aging population, might open up an avenue of employment growth in a critical nontradable sector. So, fine, yes, let’s do all that. And let’s also do what we can to disabuse our policymaking elites of the notion that to work for a living in a job that does not require a bachelor’s degree amounts to failure.
But it probably isn’t going to be enough — and by “enough” I mean sufficient to create conditions under which a 21-year-old man of average intelligence with a high-school education and a bit of training can achieve a standard of living decisively more attractive than welfare dependency or the immediate gratifications associated with underclass dysfunction. His troubles are troubles for us, too, and until conservatives have something more persuasive to say to him than we do now, don’t expect him to listen. Without a credible way forward, his main attractions will be the sedative of dependency or the stimulant of underclass moral anarchy, and we cannot afford much more of either.
– Mr. Williamson is author of The Politically Incorrect Guide to Socialism (Regnery).