Donald Trump’s strident rise to the crest of the Republican Party in the U.S. has drawn attention to a fervid current of popular frustration that until recently has laid latent in U.S. society. Trump’s emergence, however, does not come as a surprise to anyone who has studied the underlying demographic and economic shifts that have taken place in the U.S. over the last 30 years. The decline of manufacturing has been touted as a transition to a knowledge economy and the rise of a globally competitive Creative Class. In towns and cities across the U.S., however, the current economic reality is far from awe-inspiring. In 1964 AT&T employed more than 758,000 people. As of December 2015 Facebook employed just over 12,000 people.
What has risen to replace well-paid manufacturing jobs in the U.S. is not a new type of knowledge-based work but rather an underclass of poorly paid service sector jobs. In 1980 a quarter of the U.S. labor force worked in manufacturing. Today that figure is around 8.5%. Over the last 30 years working class wages have stagnated and in 2014, working aged people in the U.S. actually formed the majority of all food stamp recipients. Total, more than 46 million people used Food Stamps in the U.S. in 2014, around 20% of the population. Every year the U.S. government spends $1 billion on food stamps for fast food workers, in effect subsidizing billion dollar corporations such as McDonald's. In 2016 Wal-Mart, the U.S.’s biggest employer, agreed to boost wages for some of its workers but the U.S. still spends billions in public assistance for Wal-Mart employees who don’t make enough to support themselves and their families. These service sector jobs aren’t an anomaly they are just the new reality of working class life in the U.S.
Prior to Trump’s rise, however, the status of working class Americans was not a central part of many public debates. Over the past 30 years as the economic fortunes of well-educated and working class individuals have diverged, high-income families have increasingly self-segregated into elite enclaves. The geographic isolation of wealthy people in the U.S. is a fundamental change to the social fabric of the American national identity. In her new book Sleeping Giant, Tamara Draut, the Vice President of Policy and Research at Demos, a progressive New York City-based think tank, tackles this debate in an engaging and easy to digest way. She argues, “No matter how you define ‘working class’—as individuals without bachelor’s degrees, as people who get paid by the hour, or as workers who aren’t managers or supervisors—its members constitute the majority of American workers and even American adults.” I called Draut to talk to her about her book and hear her analysis on the trends shaping the modern U.S. economy and the importance of the new working class.
Nathaniel Parish Flannery: In recent years talk about the Creative Class and the Knowledge Economy has defined many policy discussions about the post-industrial U.S. economy. In your book you pull together a lot of fascinating statistics and argue that the U.S. economy is really a low paid service economy. In 2016 is the U.S. really a working class economy?
Tamara Draut: About half of all workers earn less than $15 an hour in this country. About half of all workers are paid by the hour and not an annual salary. The United States has the highest percentage of low wage workers of any developed country. We have seen a mushrooming of low wage service sector jobs that have replaced better paid manufacturing jobs. Today about two-thirds of Americans do not have a college degree or higher, it’s far from being a majority. In many ways we’ve always been a working class nation in terms of the percentage of people who don’t have college degrees but what we’ve seen is just a huge bifurcation in the quality of jobs that are available for people without college degrees [versus] people with college degrees. As we’ve lost better-paid manufacturing jobs what we have is a complete decimation of job quality for workers who don’t have college degrees. We have really focused on the knowledge economy and ignored the fact that largest growth in jobs is coming from what I call the bargain basement economy. These are jobs that pay under $12 an hour and have erratic schedules and very little benefits. That’s really the heartbeat of our economy. It would be great if Silicon Valley generated as many jobs as retail and fast food but they simply don’t. One of the things I wanted to do with my book is re-center some of the political debate around improving job quality for everybody in this economy. Just in time scheduling is one the quote unquote "innovations" of technology. It allows managers to calibrate their workforce down to the hour. They track shopping and customers and if the models don’t work they send people home and they also expect people to be on call to come into work when demand picks up. It wreaks havoc on people’s ability to budget and it also sends a really strong signal to workers that they are treated as machines that are turned off an on. Disrespect has been baked into these jobs. It’s a cultural shift.
Parish Flannery: A lot of these facts may be surprising, even to very well educated people in the U.S. There’s been a lot of analysis lately of the emerging geographical divide between income groups in the U.S. Are we seeing a fundamental change to the way the U.S. society is organized and if so, what impact is it having on politics and policymaking?
Draut: I spend a whole chapter talking about how much distance there is between the working class and the people who create our news and our policies and our culture. We are living in an era of historic inequality. We have become highly segregated by class and race. Really often the only way that people who are engaged in policymaking and journalism and television writing interact with people who are working class is solely in commercial transactions. As people have become more college educated the lines of privilege have hardened. We have a system that reproduces privilege as opposed to ameliorating it with higher education. In terms of culture the working class has sort of disappeared from television. People with college degrees have the privilege of visibility. Their experiences are reflected back to them in our media and pop culture. That’s just not true for the working class.
Parish Flannery: I saw one study that explains around 40% of the content of U.S. imports from Mexico is produced in the U.S. That’s a figure that’s 10 times higher than the corresponding statistic for imports from China. Eduardo Porter did a recent column in The New York Times in which he argues that without Mexico and without NAFTA the U.S. probably would have lost even more manufacturing jobs. At the absolute most simple level its possible to point to factories that have closed in the U.S. and moved to Mexico. But the number of manufacturing jobs that have moved to China is even higher. Now we see a strong second generation of manufacturing emerging in northern Mexico. Do you see the cross-border manufacturing becoming a potential boon for the U.S. economy?
Draut: It depends. There’s a lot of disagreement and debate around the role of NAFTA in the role of the loss of manufacturing jobs in this country. We have seen some onshoring of manufacturing. Even in our manufacturing economy we have seen the same downward trend in wages that has been ubiquitous in the service sector for awhile. The reality is that there are a lot of jobs here right now that are growing rapidly that we need to commit to making better. We need to hold that up as as high of a priority as trying to bring back a manufacturing resurgence in this country.
Parish Flannery: You talk about the Fight for $15 and efforts to increase the wages of many service sector workers. Is this a long-term solution? Self driving trucks may soon replace truck drivers and eliminate one of the biggest sources of blue collar work in the U.S. Likewise, as technology evolves it’s possible that fast food restaurants and banks may become entirely automated. What’s your view on the future?
Draut: I think that robots taking over work is an important thing for us to keep our eyes on. That said the time horizon depending on who you talk to is two decades out maybe even longer. I think it’s important that we begin planning for the future but at the same time we can’t take our eyes off the ball. We have millions and millions of poverty level jobs in the economy right now. That’s number one. We need to improve job quality. We can’t allow only people with college degrees to have access to decent paying jobs. We need to take control of our own destiny. One of the things we could be doing is expand investment to update our infrastructure. We could actually create millions of high-quality, good paying jobs. At the same time we have to look at forecasting that says that [in the future] there may not be enough jobs for the people that want them. We have to walk and chew gum at the same time. My concern is that the obsession with the robots taking over is leaving us in stasis over the real work that needs to happen now to create new jobs and improve the quality of the jobs that are here. It’s important to keep in mind that a lot of the money that pays home-care workers is through public systems like Medicaid and Medicare. It’s absolutely true that paying out of their pocket a family may not be able to pay a home care worker $15 an hour. That is exactly why we’ve chosen to publicly subsidize lots of things in our society that individuals alone cannot afford. That includes things like education and health care and roads and bridges. The idea that as a society we can afford to ensure that the people who are caring for the aged and the disabled and the sick is a real red herring.
Parish Flannery: Finally, you point out that two thirds of the least economically secure Americans believe that corporate profits are too high and that 70% of working class whites believe that the economic system in the U.S. unfairly favors the wealthy. The demographics and opinions make it seem like there’s strong potential support for more progressive politics in the U.S. How do you see this playing out in the long term? Is the support for candidates such as Trump and Bernie Sanders something you expect to see again and again moving forward?
Draut: One of the things I do in the book is look at the policy views of the white working class. You’re seeing them in the Trump campaign. If you look at the polling of working class whites we know that they are definitely progressive on economic issues wanting more involvement of the government to create jobs. [They’re] seeing that the system isn’t fair and is rigged but also [they] are the only group that views immigration as a direct threat to their livelihood and see immigrants as taking jobs. They also believe that discrimination against white people is more of a problem that discrimination against African Americans. That mix of anti-immigrant sentiment and anti-black sentiment combined with progressive economic ideas is exactly the Trump campaign. I think what it says is that we need to do a better job of addressing the scapegoating and racism in this country in order to achieve a full progressive agenda. I think [Democrats] still have a pretty sizable part of the white working class vote. The white working class voters haven’t totally abandoned the Democratic Party. I think what the Democratic Party needs to do is focus on the working class in general, this new working class, the service sector working class. [Democrats need] to speak to the experience of what its like to work in the service sector on an hourly wage that doesn’t guarantee that you don’t live in poverty. Democrats need to bring back the lexicon of “working class.” We don’t even hear those words anymore. And I think that’s a real shame. The percentage of people who identify as working class and middle class has been about the same for the last twenty years. African Americans, and women and Latinos are much more likely to self identify as working class. The Democratic Party has steadily moved away from being the champions of the working class. I think that’s a real problem.
