The Real Inequality Problem

John Cochrane writes,

The worry is that we are more and more bifurcating into a market with a small number of “permanent,” high benefit, high hours worked, career jobs, and a larger group of “temporary” employees, limited in hours and incidentally limited in career and human capital development.

That sounds a lot like the academic job market. The tenured professors on one side of the inequality gap, and the adjuncts on the other.

But never fear. Progressive policies are here to solve exacerbate the problem. Casey Mulligan writes,

Under the Affordable Care Act, between six and eleven million workers would increase their disposable income by cutting their weekly work hours. About half of them would primarily do so by making themselves eligible for the ACA’s federal assistance with health insurance premiums and out-of-pocket health costs, despite the fact that subsidized workers are not able to pay health premiums with pre-tax dollars. The remainder would do so primarily by relieving their employers from penalties, or the threat of penalties, pursuant to the ACA’s employer mandate. Women, especially those who are not married, are more likely than men to have their short-term financial reward to full-time work eliminated by the ACA. Additional workers, beyond the six to eleven million, could increase their disposable income by using reduced hours to climb one of the “cliffs” that are part of the ACA’s mapping from household income to federal assistance.

5 thoughts on “The Real Inequality Problem

  1. I have a question based on your ACA blogging: When you say the affordable care act is a failure, do you mean it is bad policy (in the same way farm subsidies are a failure) or that the program simply isn’t workable or sustainable over x time frame (in the same way that traininf up ARVN to take our place in Vietnam was a failure)? If the latter, what is x? In ten years has the ACA collapsed under its own awfulness or is it a persistent drain?

    • I think that the ACA, as designed, will make most of the major problems of our health care system worse rather than better. Relative to these fundamental flaws, the web site problems were a distraction and a delay.

      It need not collapse. If Democrats stave off repeal, they will continue to spin it as a success.

  2. How can this be? A university should be able to create fully qualified professors.

  3. That sounds like the government market as well, at least federal. A shrinking number of high benefit, high pay perm jobs, then contractors, “interns”, rolling temp work for others.

  4. The tenured professor / adjunct problem is interesting. If the cheaper adjuncts can do the job how and why is the tenured professor’s compensation so much higher. It reminds me of the situation in Italy where young people cannot finds jobs at all while those older people who with jobs do quite well.

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