Sure, schooling Nobel Prize-winning Ph.D.s from the London Schol of Economics on the folly/hypocrisy of cherry-picking is an ugly job, but someone’s got to do it!
And who better, really, than someone with a BA in English from Oberlin College?
Yeah, ole Daron put his foot in it, all right, and I’m just the guy to subject him to a stern lecture on his wrong-doing. It was, appropriately enough, sometime frenemy Brad DeLong who put me on the case with his “Draft” (i.e., subscribers only) post that bears the ponderous title “The Democratic Party Is too a Party Dedicated to Securing for the Workers by Hand & Brain the Full Fruits of Their Industry”, during which he takes issue with Daron’s own post, “What Anti-Trumpism Is Missing”.
A significant share of the US population [says Daron] has suffered economically over the last four decades. Real (inflation-adjusted) earnings among men with only a high-school degree or less have declined since 1980, and median wages had all but stagnated until the late 2010s. Meanwhile, incomes for Americans with college degrees and specialized skills (such as programming) have risen rapidly.
There are many reasons for this labor-market transformation, and several of them are rooted in economic trends that establishment politicians and the media long sold as benefits to workers. The wave of globalization that was supposed to lift all boats has stranded many. The automation that was supposed to make US manufacturing more competitive and help workers is the biggest factor in declining earnings among workers without a college degree. Meanwhile, labor unions, minimum-wage laws, and norms protecting low-pay workers have weakened.
Let’s go back to Daron’s first “fact”: “Real (inflation-adjusted) earnings among men with only a high-school degree or less have declined since 1980”. Now, the good Nobelist assumes, without saying so, that the population consisting of only a high-school degree or less remained stable from 1980 to the present. But it didn’t. According to Copilot, citing Census Data, in 1980 50% of men 25 and older had no more than a high school diploma, a figure that had dropped to 29.4% in 2021. If you arranged the entire male working population on a scale according to their yearly earnings, and assumed for simplicity’s sake that earnings correlated perfectly with level of education, then in 1980 those with more than a high school diploma occupied the top 50% of the scale. But in 2021, they would occupy 70% of the scale, depriving the “high school only” class of the top 40% of its earners, and thus shrinking the yearly earnings average for the class considerably. Furthermore, the percentage of women in the workforce increased from 51.3% to 57.3% in 2023—not a large increase, to be sure, but still a 10% increase and surely taking some “good” jobs away from men with no more than a high school education. When you compare apples with oranges, you get fruit salad.
And what about Daron’s second paragraph, in which he tells us that “The automation that was supposed to make US manufacturing more competitive and help workers is the biggest factor in declining earnings among workers without a college degree, citing a paper he wrote with Pascual Restrepo, Tasks, Automation, And The Rise In U.S. Wage Inequality.1 Does Dr. Acemoğlu think that increases in productivity are a bad thing? Does he agree with the dockworkers, who want contracts guaranteeing no increases in efficiency forever? Should we outlaw containers, in order to create more “good paying” jobs? Does he wish he were paying $50,000 for a gas-guzzling 1980 Buick? Would he like to pay $100,000 for the same Buick 30 years from now, when the rest of the world is traveling in self-driving electric vehicles, offering astounding increases in both efficiency and safety? Does he understand that U.S. workers were the highest paid back in the day because they were the most productive, a temporary situation necessarily dependent on the fact that the rest of the world hadn’t caught up with us, an advantage that would necessarily disappear once they did catch up?
Apparently not. It is “interesting” that someone as intelligent and well-informed as Dr. Acemoğlu can serve as little more than a socio-cultural intellectual weathervane, useful primarily for determining the airflows at Cambridge cocktail parties.
Afterwords
Brad DeLong (remember him?) has his own commentary, but I’m limiting my riff to these two nits, which I found particularly egregious.
Despite Brad’s differences with Damon, which he elucidates with no little asperity, they are one in dreaming of somehow returning to that supposed social democratic, New Deal Nirvana of strong unions and fat paychecks, myths that I have “refuted” (or at least attempted to do so) in two exceptionally long-winded posts, here and here.
1. In this paper, Dr. Acemoğlu makes essentially the same point: “The real earnings of men without a high-school degree are now 15% lower than they were in 1980”. Again, the percentages of men in this category fell dramatically over time, from 12% to 6.6%. It’s hardly surprising that someone with less than a high school diploma would have a much harder time finding a “good” job in 2021 than in 1980, and indeed I think it’s reasonable to say that anyone who fails to graduate from high school these days has either significantly limited intelligence or significant personality problems. To think that these two populations are in fact comparable is ridiculous.
