‘Wealth work’ captures only part of the stark jobs divide
The Digital Gilded Age would seem to be producing its own version of “the help” that tended to the wealthy during the American Gilded Age of the late 19th century, or the estates of Britain at the Empire’s zenith.
Think of it as Downton Abbey without the snazzy period costumes, or getting to live in the baronial manor, or having paternalistic aristocrats occasionally reward the loyalty of those “in service.”
That, at least, is the impression one might get from a recent story by Christopher Rugaber of The Associated Press.
“One of the fastest-growing job categories of the past decade has been in what David Autor, an economics professor at MIT, calls ‘wealth work’: Catering to the whims and desires of affluent households,” he wrote.
The story continued: “Yet economists note that most so-called wealth jobs don’t benefit workers or the economy as much as traditional employment does. Most wealth workers are self-employed and so lack employer-provided health insurance, retirement plans and other benefits.” Wages are often low and most of these workers have fewer ladders up, it reported.
Alexis Madrigal in the Atlantic went further, labeling it the “servant economy.”
I come not to criticize — Autor is one of the world’s leading labor economists — but to unpack.
These days words and phrases are often weaponized for causes left and right, sloppily applied and then turned into background noise in a country where fewer and fewer minds are changed by reasoned discussion.
One caution is against painting with too broad a brush. The AP story leads off with Ken McNamee, a private chef who cooks for the elite of Seattle. I can’t imagine McNamee is poorly paid. He is in a high-skill position that gives him options. (He “has cooked in exclusive clubs around the world,” the story says.)
A deeper dive into the data of “wealth workers” by the Brookings Institution includes personal financial advisers and tax preparers, professional positions that typically pay very well. Looking at the fees and scheduling power of plumbers, electricians and handymen makes me wonder why I bothered going for college degrees.
Another caveat comes from the demand side, so to speak. It’s not only the 1% or even 10% in wealth who can afford hair dressers, manicurists, housekeeping and lawn services. These customers include middle- and even lower-middle wage households.
Also, the Brookings data, which informed the AP story, shows a preponderance of “wealth work” in rich coastal metros, but also in diverse tourist destinations such as Myrtle Beach, South Carolina, Las Vegas and Bend, Oregon.
Measured as a share of metro jobs, the highest end was 6.8% in Kahului, Hawaii. Seattle-Tacoma-Bellevue’s share of such “wealth work” was 2.1%, ranked 147 among 388 metros.
Anyway, sure, plenty of toffs are found in many tourist meccas, but so are average Americans on vacation.
Still, some basic truth is found in the labeling. Here’s why: Plenty of these jobs pay poorly, no matter who’s buying. According to Brookings, the nearly 3.2 million “wealth work” jobs in 2017 paid an average $35,982.
Using the Pew Research Center’s calculator, you’ll find that such a before-tax income for one person lands in the wide zone of middle income, even for Seattle-Tacoma-Bellevue. If the household has more than one wage-earner, the picture improves. Still, that average pay seems skimpy.
This is a snapshot of a set of broader problems facing workers that we need to take seriously. They include the decline of secure, middle-income full-time jobs, collapse of private-sector unions and worker bargaining power, shift of national income upward, and the loss of millions of good traditional jobs to technology and offshoring. Job polarization drives inequality.
These trends have been going on for decades, since the great decoupling of income growth between wealthier Americans and everyone else in the late 1970s. Manufacturing jobs declined while service positions proliferated. In a broad generalization, the latter pay less than the former, especially for those lacking college degrees or specialized skills.
A telling inflection point occurred in July 2008, when leisure and hospitality jobs overtook those in manufacturing for the first time since modern measurements began.
The challenge has been exacerbated by the rise of gig work, much of it poorly paid and lacking health or retirement benefits, much of it powered by internet disrupters such as Uber.
As Madrigal wrote earlier this year, “An unkind summary, then, of the past half decade of the consumer internet: Venture capitalists have subsidized the creation of platforms for low-paying work that deliver on-demand servant services to rich people, while subjecting all parties to increased surveillance.”
Yet national political responses have been tepid. Some cities and states raised the minimum wage and, contrary to critics, the economic sky didn’t fall. Higher-paid workers mean more spending power, a virtuous cycle.
Moving beyond this, however, has proved politically impossible. Advanced infrastructure investments that could create large numbers of construction and operating jobs are mostly nonstarters in America.
Easier unionization got no traction even when the Democrats controlled both the White House and Congress in 2009-2011.
Proposals for universal health care from Democratic presidential candidates are controversial and would require commanding majorities in the House and the Senate.
Funding for education has been slashed in many states, especially red ones, diminishing an essential tool for upward mobility. A recent poll of teachers found half of respondents considering leaving the profession because of poor pay and lack of respect.
Maybe the wave of advanced automation and artificial intelligence, which threatens even high-wage jobs, will break our national paralysis. The estimated percentages of jobs at risk from these forces range from 25% to 47%.
This hearkens back to the Industrial Revolution, where it took decades for many to recover from the transition from artisan and agricultural work to urban industry. The Luddites weren’t wrong in their apprehension as Britain changed.
As Michael Cohen wrote on Quartz, “The truth is that the Luddites were the skilled, middle-class workers of their time. After centuries on more-or-less good terms with merchants who sold their goods, their lives were upended by machines replacing them with low-skilled, low-wage laborers in dismal factories.
“To ease the transition, the Luddites sought to negotiate conditions similar to those underlying capitalist democracies today: taxes to fund workers’ pensions, a minimum wage, and adherence to minimum labor standards.”
We know better now, don’t we?