Brian Holmes on Tue, 14 May 2013 16:46:16 +0200 (CEST)

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Re: <nettime> Jaron lanier: The Internet destroyed the middle class (2)

I'm sorry, I should have given the source for my observation about the return of high-wage and low-wage jobs in the US, compared to the devastating loss of mid-wage jobs. It is here:

It's an amazing little animated graph, dated 2013. What you have to do is click on "replay recoveries" and then on the arrow below. You will see that 42 months after the "recovery" of 2009, only 85,380 mid-wage jobs were regained, out of 3,764,120 mid-wage jobs lost during the so-called "great recession" of 2007-09. The net job loss in the mid-wage range was 3,678,740. A very big number.

In the high-wage sector, 908,990 jobs were lost, but 1,011,210 were created: that's a net gain for high-wage earners.

In the low-wage sector, 2,803,390 were lost, and 2,421,010 were gained. There you had a net loss of 382,380 low-wage jobs. But that's only 10% of the net loss of mid-wage jobs.

The failure of mid-wage jobs to come back is absolutely staggering. Jarod Lanier sees this through the lens (indeed) of Kodak vs. Instagram, or music file-sharing etc. Yet he's basically right, you just have to amplify his explanation. As the video included with the graphic explains, both mid-wage manufacturing jobs and a host of white-collar service jobs have either been outsourced or automated (or both, for that matter: there is a lot of partial automation, so that one worker in China or India can do what ten used to do in the US). Web 2.0 functions have indeed made many white-collar workers redundant. It's technological unemployment with a vengeance.

This heralds a major change in US society, and undoubtedly the same applies to European societies after austerity is over (if ever). I believe that what happened - why we didn't see this coming - is that the stagnation of mid-wage earnings was compensated by credit and rising home equity for a generation, from the mid-1980s to 2007. Then the Great Recession (or Depression, or Repression, or whatever you wanna call it) came and choked back all that credit and middle-class wealth-effects. The entire economy of the mid-wage jobs then collapsed: no profit margin for those companies anymore, because sales plunged. It was necessary to implement the automation and outsouring in order for those kinds of businesses to stay afloat. So you still have many of the businesses: just not the jobs.

Somebody should research this further, to verify if the Reuteurs article was right, what the comparable situations are in the different "advanced economies," etc. I will do so when I have time. Right now I am headed to Spain to look at the future up close.

all the best, Brian

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