employment declines were disproportionately concentrated among lower-wage workers. Segmenting workers into wage quintiles, we find that more than 35 percent of all workers in the bottom quintile of the wage distribution lost their job—at least temporarily—through mid-April. The comparable number for workers in the top quintile was only 9 percent. Through mid-May, bottom quintile workers still had employment declines of 30 percent relative to February levels but some workers have been re-called to their prior employer. We also find that employment declines were about 4 percentage points larger for women relative to men. Very little of the differences across wage groups or gender can be explained by business characteristics such as firm size or industry. Finally, we show that employment losses were larger in U.S. states with more per-capita COVID-19 cases and that states that re-opened earlier had larger employment gains in the re-opening sectors.
The massive decline in employment at the lower end of the wage distribution implies meaningful selection effects when interpreting aggregate data. For example, we document that average wages of employed workers rose sharply—by over six percent—between February and April in the United States, consistent with official data.4 However, all of this increase is due to the changing composition of the workforce
Note that the most interesting empirical work in macro these days is using non-governmental data sources. In this case, data from a payroll processor.
Belmont vs. Fishtown (aka the stay at home crowd vs. the out of work crowd).
I’ve been predicting this for several months and glad to see some empirical data, although it was basically self-evident from the beginning.
Neo-feudalism.
What this tells me is what any number of other blogs/websites seem to suggest, that mega-metros (i.e. those with 500k pop or more) continue in the trend of the hollowing-out of the middle class. The better-off (high 5-figure into low or mid-6 figure incomes) continue to be better off while anyone not ‘better-off’ falls deeper into the ranks of serfdom and expendability, that ever increasing pool of service labor from which the ‘better-off’ can pull from to maintain their lifestyle in an environment that is increasingly hostile, simultaneously providing diminishing returns to their inputs.
Diminishing returns. This doesn’t end well. It’s a feedback loop, both for the ‘better-off’ and the serfs. One side is going to require ever more resources for ‘input’ while the other is going to see further and further pressure on livelihood and expendability in the service of the ‘better-off’s’ efficiency of capital.
Leave cities. Now.
“Leave cities. Now.”
But, where are the greener pastures? Where should we/they go?
It’s a good question to ask. As someone on the verge of moving out of a city and having conducted a home search I thought about my options a lot.
In the current age the reach of forces from the city that you don’t like can reach you in the countryside just as they can in the city. Nearly all the small towns in most metro areas have BLM protests, even tiny little family oriented places. Even being in a majority Republican area won’t necessarily help.
Many of the people providing government services everywhere (everything from law enforcement to education to libraries) comes from the same managerial class and have the same outlook at people in the Metropol, even if their constituents have different beliefs.
In NYC De Blasio is encouraging riots and protests at the same time he’s having Hasidic playgrounds welded shut. This isn’t that different then a small town nearby where the children’s pool remains closed (the playground just opened recently) while at the same time they had a BLM protest rally with people on top of each other with the Mayor in attendance. A majority of the towns residents voted for Trump in 2016, and yet this is what things are like.
I’m not saying that some geographies aren’t better then others, but I think people need to realize that now more then ever before there is a single monoculture run by the same people everywhere. They can communicate and coordinate instantly over the internet. If they see a reversal at the hands of the local populists, they can easily call in reinforcements. There is no federalism.
My general recommendation is to pick the place that will most meet the needs of your family. Cost, commuting times, way of life. I would place higher priority on acreage because public use amenities are no longer reliable. You may need to do everything yourself on your own property.
“I think people need to realize that now more then ever before there is a single monoculture run by the same people everywhere.”
We moved from the California (SF Bay Area) to Texas (Fort Worth/Dallas). I tend to agree with the statement above, but it is much much better at the margins.
Unrelated question: why not think of moving outside of the U.S. to a place much less engulfed in this silliness (i.e. less diverse)?
We are middle aged family people with existing ties that limit were we would consider. Our search was basically constricted to the east coast, and even within that certain places made more sense to others (due to family, career, and friends).
I am skeptical that “less diverse” would be enough. The least diverse areas of America are the most crazy (see Oregon or Vermont). Or they have a lot of their own problems (West Virginia).
There are really two problems.
1) A certain kind of white person.
2) Minorities dysfunction.
If you have too many of either you have problems. So describe to me where in the country won’t have those kinds of problems? And where we could find employment (no Midwestern Plains States).
I think you would have to move to a Northeast Asian country at this point to be around non-progressivism, but that has a lot of issues. You are a minority in a xenophobic culture. You are thousands of miles away from anyone you know. You can’t easily get a job.
P.S. I don’t think the lack of diversity drives the craziness in white people. Per Albion’s Seed I think that there are several distinct white cultures in America and the craziest on race just happens to be in the far north latitudes with the last diversity. You could say immigration was an attempt by that group to overwhelm the other groups and impose their will on the whole nation.
South Carolina. New Hampshire. Alabama.
Basically, find an underrated place and go there.
South Carolina and Alabama seem like terrible poor places full of blacks. I’m moving away from Baltimore…not to it.
Also, it won’t take much outside immigration to flip it from Red to Blue.
New Hampshire was debated. There were some issues related to both my health (I do very bad in cold climates) and jobs.
In general we were disappointed with the housing options in New England. Very expensive for what you get and not a lot of multi generation family options.
I should note as well: Most of the disaffected appear to be almost inextricably tied to the cities (e.g. young, progressive, etc.). Asking them to leave seems like a non-starter.
Honest question: Why neo-feudalism rather than just capitalism evolving as expected?
Because there is no one expectation for how capitalism will evolve.
Marx, of course, had an expectation: a progressive “immiseration” of the workers, down to the edge of starvation. That hypothesis has been rejected by pretty much the entire history of the last 170 years.
An ironic description of what Marx expected. Most commenters here see a Progressivism “immiseration” of the workers.
Still, some things can be expected from capitalism. One of those things is that there would naturally be a greater return to the technically skilled as capitalism got more complex.
A claim of neo feudalism requires explaining why inequality is more political than a natural evolution of the circumstances of competition.
Honester question?
Why neo-feudalism rather than just evolving as scientifically expected?
Compensation costs might have be compounding the problem. One wonders if there might be a minimum wage factor at play in the bottom quintile. It would be interesting, for example to compare states with higher minimum wages with those having the federal minimum. The lockdown states would appear to be those with the higher minimum wages. Are employers with tighter margins just not able to operate in situations in which other employers with lower costs are able to squeeze. And one wonders if there is a really good measure of how many employees are being brought back on at reduced hours and benefits. And one wonders how much the new tax on employers in the form of the barratry guild feeding frenzy unleashed by the Gorsuch Red Queen “I could set this world on fire and call it rain” opinion might further confound the virus theory by further discouraging employment in urban areas with a disproportionate representation of potential plaintiffs.
My sister changed jobs in December. Good timing. From a small clinic to a hospital (nad) and she has had 3 raises so far this year. She has to rotate in and out of the plague tent so thats part of it. But the raises are permanent.
The local mall will be closed permanently.
Hip hip…hooray for her!
Yeah. One of the lucky duckies. I’ll let her know you are cheering her on.
I was just thinking there were, what, 20,000 coal miners and millions and millions of retail workers who have lost their jobs over the past few years? But nobody seems to care about retail workers.
The whole discussion above about cities and mindsets just doesn’t make sense. I live in an incredibly blue place. People are living normally. Most of the people I talk to, randomly, think this is all nonsense. The megalopolis was almost entirely untouched by looting or riots, save in one larger city.
The reason, I think, that people aren’t reacting to all the craziness is because it’s just something that happens on TV. It’s not *their* lives.