The American economy has been stagnating since the end of the 20th century and has grown especially slowly (2% per year on average) since the end of the Great Recession in June 2009. This slow growth has various unpleasant causes and consequences:
Men without Work. The political economist, Nicholas Eberstadt, has pointed out that the work rate for prime working age (25 – 54) men has dropped from 94.1% in 1948 to 84.3% in 2015. This translates into 9.5 million prime working age men who are not currently in the workforce.
Mortality Crisis. The economists, Anne Case and Angus Deaton, show that the mortality rate for working class whites in America, aged 45 – 54, has doubled since 1990, and that these new deaths are largely “deaths of despair.”
Complacency. The economist, Tyler Cowen, makes a strong case that too many Americans are so comfortable in their own worlds that they have become complacent about the structural problems facing American society.
Segregation by Class. The political scientist Charles Murray has described a separation of American society into a new Upper Class (20% of all Americans) and a new Lower Class (30% of all Americans) with the Upper Class enjoying the four deepest satisfactions of life: family, vocation, community and faith while the Lower Class is largely left out.
What can be done to improve the fortunes of America’s blue-collar workers? There are actually a lot of things:
Greatly improve vocational training for the millions of skilled jobs for which there aren’t enough qualified applicants.
Revitalize America’s job-generating capacities. More businesses have closed than opened each year since the Financial Crisis.
Reverse the perverse disincentives against male work embedded in our social welfare systems. The Earned Income Tax Credit should be extended to single adults without dependents. Eligibility for disability income should be tightened considerably.
Come to terms with the enormous challenge of bringing convicts and felons back into society. The huge increase in incarceration rates in recent years has coincided with a dramatic drop in rates for both violent crime and property crime.
Conclusion. It’s a scandal that so many blue-collar workers are struggling to live a fulfilling life. There are many different actions government can take to improve their lot.
It is now generally accepted that Donald Trump was elected President because of his strong support amongst white blue-collar workers, especially in the battle ground states of Wisconsin, Michigan and Pennsylvania. Mr. Trump was able to persuade these voters that he would be able to raise their stagnant incomes and even bring back the millions of manufacturing jobs which have been lost to automation and globalization.
Now the two economists, Anne Case and Angus Deaton, have shown that mortality rates for white, U.S. non-Hispanics, aged 45 – 54, with a high school degree or less, have doubled since 1990.
Here is the general situation:
Overall, U.S. life expectancy at birth has increased from 63 years in 1940 to 79 years in 2010.
Life expectancy is still increasing for the college educated as well for U.S. Blacks and U.S. Hispanics. It is also still rising in many other developed countries.
The main cause for the rising death rates of the vulnerable group is “deaths of despair” – suicides, drug overdoses and the consequences of heavy drinking.
The authors point out that:
It is precisely working class whites whose economic prospects have deteriorated the most in recent years, especially since the financial crisis.
The U.S. has moved largely to defined-contribution pension plans with stock market risk in recent years whereas in Europe defined-benefit pensions are still the norm.
The current mortality crisis bears a resemblance to the AIDS epidemic which took the lives of 650,000 Americans from 1981 – 2015. However, public awareness of the AIDS crisis was far greater than for the current mortality epidemic.
Conclusion. The basic American dream of home ownership, modest financial and job security and a bright outlook for one’s children has faded for a large class of middle-aged workers. The crisis is manifested in an increase in mortality rates for this vulnerable class. Donald Trump’s election mandate is to fix this problem but it is a tall order indeed.