Half Changed World

A few weeks ago, I went looking online for a table to put in my home office to give me some additional workspace.  One click led to another, and eventually I found this craft table at Target.  But the shipping charges seemed awfully steep, so I decided to google and see if I could find it for less.  I soon found it for quite a bit less on eBay, so placed the order.  When it arrived a few days later, I was somewhat taken aback to find that it had been shipped directly from Walmart.

Lots of eBay sellers use drop shippers (which means that they never touch the product), but this was my first experience buying from someone re-listing something from a mainstream retailer.  For a few minutes of her time, and the cost of the eBay listing, the seller had leveraged the difference between what Walmart charged and what I was willing to pay for a quick $20 or so profit.   She’s received slightly over 1200 feedbacks in the past year; if my transaction was typical, that means she’s made at least $24,000.  My guess is it’s more, since many buyers don’t bother with feedback. 

Is this outrageous?  Some people seem to think so — a few people gave her negative feedback when they got the shipment that shows a lower retail price than they paid.  I gave her positive feedback, since the item was delivered as described, in good shape.  And how is this fundamentally different from what mainstream companies do every day?

James Fallows has a fascinating article in this month’s Atlantic, on the Chinese manufacturing plants where most brand-name electronics are made.  One of his points is how little of the money spent by consumers goes to the manufacturers, whether the owners of the factories or the assembly line workers. 

The Times today had a blog post about Sarah Jessica Parker’s new line of very inexpensive clothes, and some of the commenters wondered about where/how they were made, given the low prices.  There’s a Frances Perkins quote that I love, about how "the red silk bargain dress in the shop window is danger signal."  But, as we’ve learned, expensive prices are no guarantee of safety or good working conditions. 

The freegans think that they’ve solved this dilemma by not spending money to buy things, but that only works for them because the rest of us are so wasteful.  (And I include myself in that, even if I make myself feel better by giving things away on Freecycle instead of putting them in the trash.)  And we’re wasteful because things are so darn cheap.

I don’t think I’ve mentioned here that we’re thinking about moving (within the general area).  We are, and things may be happening faster than I had expected.  So I’m too busy obsessing to post right now.  So instead, I offer this caption contest from my job:

What do you think the caption should be?  Details of the contest here and here.

Update:  The winner is…

Jody at Raising WEG has a couple of great posts up about the decline of the independent bookstore and why this is still a golden age for readers.  She’s 100 percent right that it’s just sloppy reporting by the NY Times to treat the rise of the chain bookstores and Amazon.com as the same phenomenon.

Personally, I almost never go into a bricks and mortar bookstore to look for a specific book anymore.  (Well, except maybe the Harry Potter releases.)  If I know what I’m looking for, I generally start by looking online to see if I can get it from one of my local libraries.  If they don’t have it, I use fetchbook to see where I can get it most cheaply online.  I go to bookstores when I’m browsing to see what’s out there, to get ideas for presents, and to take the kids to story hours.  (And I make up for the sin of buying used books by often buying signed copies at full retail price to give as gifts.)

And I live in an urban area, with access to lots of bookstores.  If I lived in a remote area, internet bookstores would be even more transformative.  And there’s no doubt that the internet has saved the mid-list book, which is less and less likely to be stocked at a physical bookstore.  (And even less likely to be stocked at Walmart, Target or Costco, which account for an astonishingly high proportion of book sales these days.)

I’m not so sure it’s a good time to be an author.  I occasionally read MJ Rose’s blog about the book industry, Buzz, Balls and Hype, which is fascinating and utterly depressing.  The chains overwhelmingly order books based on the computer prediction of what is going to sell, and things that don’t sell fast get sent back to the publishers.  The publishers are desperate for the next big thing, so they’ll throw money at a new author who they think could break out, but god help the second-time author whose first book sold respectably but not spectacularly.  Rose tells stories of authors who invest pretty much their entire advances on hiring independent publicists, because getting a book published doesn’t mean that your publisher will do anything to help your book succeed.  (The combination of publishers providing less and less support to authors and the costs of printing dropping is pushing more authors into self-publishing, but that’s another story.)

One of the things that independent book stores do is sell books that aren’t best sellers, that aren’t getting hyped by the publishing company, but that someone on staff really believes in.  Authors are desperate to find a way to replace those disappearing independent book stores.  That’s why I have an inbox full of emails offering me free books, in the hope that I’ll write about them.

The other thing that good independent book stores do better than the chains is create what Ray Oldenberg calls "third places" — places that are neither fully public nor fully private, that invite conversation and community.  The best portrayal of this that I know of is the ongoing saga of Madwimmin books in Dykes to Watch Out For.   (And Madwimmin has closed; Bechdel says she didn’t want the strip to be frozen in time like the Family Circus.)  While Barnes and Noble is full of people reading, surfing the internet, and drinking coffee, they’re unlikely to talk to people other than the ones that they came with. 

As Jody points out, the internet also fulfills some of that role; I don’t need to hang out in a women’s book store to find people to discuss feminism with.  And again, that’s a lifesaver to those in remote areas, or those who would be too shy to join in the discussion.  But it’s also harder to make a real personal connection.

Today’s book, The Winner-Take-All Society: Why the Few at the Top Get So Much More Than the Rest of Us, by Robert Frank and Philip Cook, is somewhat dated in the details (it was first published in 1995) and can be repetitive at times, but is nonetheless a must-read for anyone interested in inequality in American society.  Frank and Cook were among the first to note that the biggest driving force in inequality today is not the gap between the very poor and everyone else, but the one between the very rich and everyone else.  Paul Krugman is probably the person who has spent the most time in recent years discussing this fact.  As Krugman noted in the NY Times in February:

"Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn’t a ticket to big income gains.

But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint."

Frank and Cook labelled this phenomenon "the winner-take-all society" and argued that a variety of technological, political and economic factors have combined to create highly competitive national or global markets in which relative position is more important than absolute skill, and in which the very few top performers in any given field capture the vast majority of the returns.  The most obvious examples are in sports and the arts — while the superstars get millions in endorsements and appearance fees, no one can name the 100th best tennis player or violinist in world.  Frank and Cook argue that the same thing is going on for doctors, lawyers, authors, and CEOs. 

While I’m not entirely convinced by their explanations for why this happens (for one thing, in most fields it is not possible to rank people’s performance as accurately as in pro golf), I don’t think there’s any doubt that the description of the phenomenon is dead on.  The math is beyond me, but I am assured by people I generally trust that there are a wide variety of occupations in which the earnings distribution can best be explained by assuming that there are a series of "tournaments" in which only the winners proceed into the next rounds, and that small differences in skill thus are magnified into huge differences in earnings.  This probably explains a significant portion of the penalty for part-time work — it handicaps people at early levels of the tournament and makes it unlikely that they’ll get into the "leagues" with the really high payoffs. 

It’s hard to pin Frank and Cook down on a left-right scale.  They are economists, and I think they overstate the role of markets and understate the role of institutional structures in creating the outcomes that they describe. (See this American Prospect article for a good sample of their approach.)  But they believe that there are huge inefficiencies in this distribution — because people don’t take into account the effect of their entry into competition on other people, more people than is economically efficient compete for the few prestigious slots — and thus argue for progressive taxation, especially if tied to consumption.

After I finished this book, I had a really interesting conversation with T. about how the idea of the winner-take-all society interacts with the long tail — the ability for even very small niche products to find their audience using the powers of the internet.  I think our conclusion is that the long tail makes it possible to opt from the tournaments without giving up entirely on being in the game.  T’s example is that while it’s harder and harder to get a book (commercially) published these days, he thinks he makes more money self-publishing his game than he could make if it were picked up by a publisher, even recognizing that they could get it into distribution channels that he can’t reach.  But I think that for most people, the money they are going to make from their piece of the long tail is for all practical purposes, indistinguishable from zero.

In the comments on Tuesday’s post, Kai Jones asked what’s the basis for comparison for the claim that risk has increased over time.  The answer is, of course, that mythical era, the 1950s.

At a meeting I went to last week, Brink Lindsey from the Cato Institute had a great line — "The right and left share this strange nostalgia for the 1950s.  The left wants to go to work there, and the right wants to go home there."  Ouch and touche.

Dave s commented that the rigid family structure of the 1950s was itself a form of risk for women, due to "the uncertainty and absolute dependence on men’s behavior choices of women in the suburbs."  I think there’s certainly some truth to that, although there’s a complicated set of interactions:

• Women who divorced suffered much more severe financial consequences in the 1950s than they do today because of both massive discrimination in employment against women and underinvestment in education.  BUT, far fewer women experienced divorce.  Women were more likely to suffer financially due to the death, disability, or indolence of their husbands than from divorce.  (See, for a case study, The Prize Winner of Defiance, Ohio.)  Germany today is probably the place that most resembles America of the 1950s in this regard.
• Women who divorce today are far less likely to be absolutely destitute as a result.  Compared to never-married mothers, divorced mothers are far more educated, and have more employment history.  But divorced women still experience major drops in their standard of living.  And, especially if they try to minimize disruption for their kids by staying in the same house/schools, they’re quite likely to wind up in bankruptcy.
• What’s new is that men also suffer significant financial hits from divorce.  Katharine Bradbury and Jane Katz have shown that as wives contribute an increasing share of family incomes, divorcing (and widowed) men are more likely to be downwardly mobile due to divorce.

The economics of the 1950s clearly contributed to the social structure in significant ways.  Men married far younger than in the past, mostly because they could afford to support families at earlier ages.  And large numbers of families could afford to live on the income of one breadwinner for one of the first times in history (while married white mothers didn’t work very much outside the home in the early 20th century, families often relied on the labor of older children).  I’m not seeing an argument for causality in the other direction, but I’m sure someone could come up with one.

Back from a very short trip to New York to celebrate the bris of my new nephew.  If we hadn’t just come back from a week away, I probably would have taken tomorrow off as well and made a long weekend of it, but since I had, I went up after work yesterday and came back this evening.  Even so, I was a bit nervous about walking into my boss’ office on Monday and saying, yes, I know I just started this job a month ago, and I know I just took six days off (with pay) to go to Spain, but I also need to take this Thursday off.  But she didn’t blink or suggest in any way that I shouldn’t go, which makes feel good about having taken the job.  One of my coworkers even rescheduled a doctor’s appointment so we could have the meeting scheduled for this morning tomorrow instead.

An economist will tell you that adding an option to the market always improves utility.  Either it’s better than the existing options, so you take it, and you’re happier than you would have been, or it’s worse, so you ignore it, and it doesn’t affect your utility at all.  I’m not convinced that’s true.

Today’s case in point is the ultra-cheap buses from Washington DC to New York (often generically referred to as the Chinatown buses, although there are now ones that run to different neighborhoods).  They typically charge $20 each way, $35 round trip, versus $84 for Amtrak.  (It’s a lot more for the high speed Acela, slightly cheaper if you can travel off-peak).   They’re slower than the trains — and can be much slower if you get stuck in traffic — and the seats give you a lot less room to spread out.  But if money is your top priority, they’re a great deal.

My problem, is that before these buses existed, I’d just take the train and accept the cost as non-negotiable.  (Yes, I could have taken Greyhound, but that offered all the inconveniences of the low-cost buses, but much smaller savings v. Amtrak — a clearly inferior option.)  Now, if I take the train, I feel like I’m being spendthrift, since I could suck it up and take the bus.  So, I’m less happy paying the same price for the train than I was several years ago.  And if I take the bus, I’m much less comfortable than I was taking the train.

This is a nice example of one of the points that Barry Schwartz makes in The Paradox of Choice.  He argues that you compare your real options to an imagined alternative that combines the best features of both — a ride as fast and comfortable as the train, but as cheap as the bus — and they always fall short.  And that reduces your pleasure in the real options.

So what did I do?  I took the bus up last night (which was a drag — an accident closed a section of the NJ turnpike) but the train back today.

This post started bouncing around in my head in response to Andrea’s comments on my post about Eating local and the environment.  And then she posted a long piece today in which she amplified her frustration at with the idea that we’re going to change the world through consumer activism.  So you might want to stop over there first.  But the key paragraph (I think) in her essay is this:

Being a good consumer is a minuscule part of the overall puzzle. Helping to make the world a better place, if that’s something you want to do, is not something you can buy. (I find it so depressing that even activism these days has become a shopping spree, something you do so you can get the t-shirt or the mug or the plastic bracelet, another opportunity to aquire more meaningless stuff we don’t need, as if the whole idea of doing something that won’t add to our collections is simply incomprehensible. Do we really need to be bought off with another cotton shopping bag?) You have to be a citizen.

I think Andrea’s over-emphasizing the contrast between being a citizen and a consumer, and under-emphasizing the contrast between acting on your own and trying to engage others, regardless of whether you’re acting as a citizen or a consumer.  Going by yourself into the voting booth on election day and voting for the candidate of your choice is as symbolic — and practically ineffective — as choosing to buy a locally grown heirloom tomato instead of one that’s been genetically engineered for pest resistance and durability and shipped across the country.  Except that the locally grown tomato probably tastes good.  Both activities are only likely to change the world if you convince a bunch of other people to do them too.

Without dismissing the importance of political action, I actually think collective consumer action is more likely to have an impact, at least in the short-run, and at least in the U.S.  Because having 20 percent of the public support the environment in the voting booth gets you a lot of speeches in the Congressional Record, and that’s about it.  The system is so winner-take-all that even a substantial minority has very little opportunity to move public policy.  But if you changed the consumption patterns of 20 percent of the public, that’s a pretty big niche market.

And I believe that shifts in demand do change what’s available, even in the housing market.  At least in the Washington DC area, they’re literally pulling down small older houses to put up bigger ones — McMansions, as they’re not so fondly referred to.  And, from everything I’ve read, the consumer pressure on McDonalds to improve the way the cows/beef it buys was treated had a dramatic impact on the entire slaughterhouse industry in the US. 

A while back, landismom had a post in which she explained that the essence of political organizing is giving people Anger, Hope, and a Plan.  Andrea’s worried that people aren’t angry enough.  I think there’s a real risk of pushing people right past anger and into despair, which is as much the enemy of action as indifference.

How do I put this?  If Andrea is right, and a sustainable environment really requires North Americans to voluntarily (either as individuals, or by voting in governments that would mandate it) reduce our consumption by more than 50 percent before we have no choice about it, then I hope the cockroaches learn to write poetry.  I recognize that pretty much everything that we can do as consumers is an exercise in slowing down our race to the brink, rather than in changing the overall trajectory.  But if it buys us just a few more decades between when we (as a society) recognize that our current path is unsustainable and when it’s too late to do anything about it, that could make all the difference.

I promised to pass along some of the interesting articles and reports that I ran across in my new job.  Here’s the first one, Babies, Bathwater, and American Manufacturing: What’s Worth Saving and How, by Dan Luria and Joel Rogers of the Center on Wisconsin Strategy (yes, the acronym is COWS).

It’s a short article (only 5 pages), and worth reading in its whole, but these are some of the points that jumped out at me:

All manufacturing jobs are not equal.  When put like this, this seems like a statement of the obvious.  But much of the writing and rhetoric about manufacturing treats it all the same, whether acting as if all manufacturing jobs are worth fighting for (what Luria and Rogers call "manufacturing centrism", the glorification of making "something you can drop on your foot") or dismissing them all as hopelessly 20th century.

In deciding whether a job is good or bad, you need to control for the amount of education/training required.  A job that pays $14 an hour is great for a high school dropout, and quite respectable for a high school graduate, but pretty depressing for someone with a 4 year degree.  If two jobs pay the same amount, but one requires several years of specialized training first, the other one is a lot more attractive.

My expansion on this idea is that jobs that require firm specific training are worse than jobs that require industry specific training, which in turn are worse than jobs that require general skills.  If you’re going to ask a potential worker to go to school for two years to develop skills that aren’t going to help them get a job anywhere else, you darn well better be guaranteeing them a job for the long haul.

Employers have been politically united beyond their interest — good employers don’t fight to be treated differently from bad employers.  As Luria and Rogers write, "owing to the relative weakness of labor in the U.S., there is an unnatural degree of class cohesion in the American business community, which further encourages supression of differences in interest within it."  I thought this was an interesting point, mostly because it’s so pervasively true that it fades into the wallpaper.  I know the business community isn’t entirely monolithic — the Committee for Economic Development certainly doesn’t argue for the same positions as the US Chamber of Commerce — but it doesn’t differentiate itself along the lines of job quality.  You don’t see employers who provide health insurance lobbying for higher taxes on those who don’t.

Today’s book is Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead, by Tamara Draut.  In many ways, this book could be called The Two-Income Trap, Jr.  Like Warren and Tyagi, Draut analyzes the ways that families today get into economic trouble through little fault of their own, with wages failing to keep up with the spiraling costs of housing, health insurance, and child care.  The hook is that Draut focuses on the experiences of young adults, 20-34, and compares their (our) experiences to those of the Boomers in the 60s and 70s.

The most convincing part of Draut’s case is her discussion of the rising costs of college, the diminishing availability of grants to cover those costs, and the ways that student loans hang over young people’s lives.  She also writes persuasively of the ways that lower-income students’ educational options are limited because of their reluctance or inability to take on that debt burden.

Nicholas Von Hoffman had an article in the Nation a bit back where he argued that the increased cost of education is a form of social control, forcing young people to focus their energies on earning money rather than fomenting social change or following their dreams.  I’m not sure I think it’s a deliberate plot, but I do think there’s a lot of truth to the story.  At my reunion, the Dean gave a speech in which he said that they did a study of the career paths of graduates.  Of those who left without student loans, he said, 95 percent took first jobs in the public or nonprofit sectors.  Of those who had more than $80,000 in loans, only 45 percent took first jobs in those sectors.

Draut’s argument becomes less convincing in other chapters where she lumps together the struggles of a teacher hoping to have an apartment to himself one day and an affluent couple buying a home in suburban Connecticut.  They both may be living paycheck to paycheck, but that’s the extent of their similarities.  And while this generation may be struggling compared to the Boomers, it is NOT the first generation in history not to be as well off as their parents.   Living with your parents was the norm for unmarried young adults for most of history; the recent increase isn’t really a sign of the collapse of the American economy.

Draut is the director of the Economic Opportunity Program at Demos.  The book ends with a chapter of proposals for how to solve these problems (expanded student aid, support for unions, paid parental leave), many of which I agree with, but none of which will convince anyone who doesn’t already support them.

Following up on the theme of last week’s book, today’s review is of Bait and Switch: The (Futile) Pursuit of the American Dream, by Barbara Ehrenreich.  After the success of Nickel and Dimed, her report on her undercover experience as a minimum wage worker, she planned to go similarly undercover in corporate America.  But she couldn’t get hired, so the book turned out to be her exploration of the various services being offered to the desperate white-collar unemployed.

The book isn’t nearly as good as Nickel and Dimed.  Compared to the deep sympathy Ehrenreich showed for her low-wage counterparts, she shows nothing but scorn for her fellow travellers on this journey.  She doesn’t believe that corporate public relations (which is what she’s trying to get hired to do) actually involves real skills, and so sees her efforts as purely a matter of puffery.  She even seems to suggest that it’s somehow unethical or misleading to target your resume to each job you apply for.  (By contrast, see Kristie Helms’ killer advice for job seekers.)

Moreover, Ehrenreich seems to have checked her common sense at the door, pouring hundreds of dollars into job coaches and networking groups that offered absolutely nothing of value.  She reserves her worst scorn for church-based job search groups, not knowing whether she is more concerned for other atheists who might wander unwittingly into their midst or for the poor fools who actually believe that God will help them find a job.

But, as The Disposable American makes clear, there really is a problem.  The reason there are so many people selling half-baked services to job seekers is that there are a lot of very desperate people out there who are willing to buy.  And the more you (used to) make, the harder it is to convince a potential employer that your job can’t be done for half the price by someone right out of college (or one-tenth the price by someone overseas).

The most persuasive part of the book for me was Ehrenreich’s anger at the way so many of the job search services she encountered encouraged workers to blame themselves for their failure to be hired, rather than looking for systematic causes.  While there’s a lot of sense to idea that workers should focus on the things that they can control — including their own attitude — rather than things they can’t, Ehrenreich is right that the focus on the personal prevents workers from organizing to demand societal change.