I haven't seen this yet, I just wanted to be the first to blame immigration.
The original endowers of this lecture series required an introduction to each lecture saying who they are? Pricks.
The lady who introduced the lecturer was also a rather uncouth in feeling the need to point out that it was a requisite of the endowment.
Midwesterners would never have been so crass.
Yes, it was posted here awhile back and has been slowing moving through various sites - it hit Reddit and Del.ico.us this week and really picked up:
http://economistsview.typepad.com/economistsview/2008/04/the-coming-coll.html
Jeez. I just watched the whole thing. What I learned: never get married and have children, or your life is fucked. I've done my share of bitching here about how annoying it is to hear stories about double-income families making 75K+ and bitching about not being able to "make it" despite sharing a home and all that, but this made it really clear why it's actually far safer to be me, paying my $1200/month in rent and making less than 20K/year than it is to have a working partner and kids. My apologies all around.
4: Yeah, the take home point for me was, kids will screw up your life and make you poor forever.
Also, Elizabeth Warren is an amazing speaker. I never thought I could be so captivated by an hourlong lecture on consumer spending.
Why do parents pay so much more for "good schools"? That's a mystery. Curious.
Maybe our inability to work 22 hours a day is the problem.
6: Because fundamentally, people have internalized that the country is being divided into nearly unbridgeable groups of haves and have-nots, and they take schools as one of the entry points for being a "have". They may well be wrong in their faith in the schools, but that is the perception.
Geez, I don't really trust her housing numbers. She compares by # of rooms? The relevant measure when it comes to reducing the housing stock and raising prices is the average lot size.
The lecturer seems to imply that there were absolutely no changes in consumption while the family got more and more screwed. I bet a 1970s house on a 1970s lot in an area which didn't have major population growth and 1970s health care have gone down in price.
The income stagnation and the taxation issues are huge issues. Scarcity in the face of larger population and technology/expectations changes are also major. She doesn't seem to appreciate latter two.
6: Well, I thought her point about perceived difference was pretty dead-on. A family just starting out could easily find a sizable apartment to rent or buy in the Prospect Park area within their means, but they'd be sending their kids to a public school with 5% less successful test scores than they would in my neighborhood, where the family-sized apartments are ruinously expensive. Sure, there are some truly shitty schools in Brooklyn, but the ones that get so often passed up are not bad at all; they're just not The Best.
And the difference is pretty understandable, and one she didn't address. If you have two parents who work, you can't be in the kids' classrooms helping out and involving yourself in the day-to-day, so you have to make sure they're getting plenty of support from the get-go. If you send your kids to a slightly-less-good school, you're going to be anxious about not being able to devote time and energy to helping out in and out of the classroom.
8:
You're being very delicate, and Warren is also indirect, but people don't want to send their kids to schools where their kids will be in the minority. Imagine a city with 10 school districts. If the city is 90% white or homogenous, then you probably have at least 9 school districts to pick from. If the city is 50% white, you might have two or three districts to pick from. And the home prices in those districts are going to get bid up.
Um, bjk, do you want to clarify? Because the way your 11 is reading to me, it sounds like people = white people. I don't think that's what you meant, right?
You could insert the sentence "Now suppose that you're white." between the first and second sentences of 11.
We pulled our kid out of the local public school here in Pork Smith, Arkansas, because she was the only Jewish kid in a class full of Fundamentalist (rapture-type) Christians -- had nothing to do with race, though the Montessori school we moved her to does have more racial diversity, and we do like that. And yes, we absolutely can't afford the $400 a month tuition and it is driving us to poverty, but it beats having my kid coming home every day asking me if it's true she's going to burn in hell forever unless she accepts Jesus into her heart.
I wonder what happened before the period she studied. 1970 was pretty much the highest point achieved by the postwar American supremacy bubble. I would think that her data show the air coming out of the middle class bubble that was built on this. And we can expect the same for the retirement bubble in the coming generation.
I guess I'm wondering just how big the middle class was prewar. I could very well be full of shit, but I keep thinking of company stores and labor violence.
Warren is also indirect
She says that her example from the Boston suburbs controls for racial composition. That's not to say that there isn't such a thing as white flight, but if Warren is correct (and I bet she is!), then your insinuation that the variance in housing prices is entirely explained by racial attitudes is wrong.
Heebie, he's in a French prison and allowed brief intenet access every day, but may only post the same text in any one day. But posting this 3 times, he's giving us the signal that we should break him out at 3 a.m. Or else he's still yammering about that damn TV ad.
This was at Thoma's a while back. I skipped it because I guessed it was too long, too depressing, not really news even in a theoretical sense, because those who did watch it commented like AWB above, and because I have no obvious solution cept revolution.
here's an older article via Thoma by Robert Frank on relative inequality and positional goods.
He's trying to tell us that football sucks.
Wow, that was a really engaging lecture. A substantial portion of the material was new to me, too, which is always exciting.
Things to wonder about:
- IIRC, non-white families generally had two spouses working even in 1970. So it seems a little oversimplifying to suggest that that was the "norm" without admitting that was the norm for white folks (admittedly, the majority of the citizens by a pretty substantial amount back then).
- The point about who new houses are being built for is really important. Builders aren't building rowhomes or semi-detatched/twins any more. They're building McMansions, or fancy condos. New housing stock is not starter homes.
- Flexibility is really remarkable too. In 1970 you can respond to a loss of income by buying cheaper food or fewer appliances. By 2005 you're spending so much less money on those categories that if you suffer a loss of income you're still stuck with the mortgage and the health insurance, which are emphatically not flexible.
- The labor-shifting on the part of hospitals is interesting. So sick people go home earlier, and their family members are expected to provide nursing care/rehab. I'm not invested in returning to a halcyon time when everyone got to spend 10 days in the hospital after having a c-section, but the point stands in that it's not like there is a visiting nurse or home-care provider who comes along and checks on you. Discharged from the hospital, it's sink or swim.
never get married and have children, or your life is fucked
Uh oh.
The labor-shifting on the part of hospitals is interesting.
Yeah, that was really shocking and upsetting. I already knew about shorter hospital times, and all that, but I hadn't thought about how much they're assuming your family will be there to be your nursing staff. If the hospital sent me home prematurely, I don't have a family who could, even if they wanted to, take off work to care for my tubes and injections while I convalesce on pain meds. That's pretty scary.
22,23, and 25 made me laugh. In that order.
11: people don't want to send their kids to schools where their kids will be in the minority.
Americans cannot really be this pussified, surely; people go places where they're minorities all the damned time if they have sufficient motivation. I suspect what's truer is that white Americans do not want to send their kids to mostly-nonwhite schools because they have reason to believe those schools will be crap, right? A sort of de facto educational system apartheid.
I think a big takeaway is that families are choosing to invest a heck of a lot more in their children than in the past. There are no excellent measures of education output, but anecdotally, talking to people to went to school in the 1970s and my and my friends experience, a "good" high school today provides a far more rigorous education than they did in the 1970s (AP classes, higher level math and science instruction, use of technology). As far as people are now far more concerned about things like getting into a "good" college, they pump money into a higher quality education (and linked things like housing in a "good" school district) for their children.
Further to 31: Warren in the lecture says that in 1970, 12 years of education used to be considered sufficient to get into the middle class. Now it's 18 years -- two years added on (paid for by the family) pre-K, and four years for college (ditto).
I was trying to say that I was posting from a cell phone for the first time, and that it might get garbled in a way that you would all make fun of.
32: Right, but I'm unsure to what extent this is blameable on external factors and in some sense "fixable." I think this might be a pure shift in investment decisions that at some point ended up snowballing due to the positional nature of much of the education system.
34: Well, that's a good question. I submit that if we had a floor under which no school district would sink, that would be an external (to an individual family) factor that is in some sense "fixable."
We'd still have some people moving from district to district to get the best position, but my vague sense from European countries is that at least some of that goes away if people are not desperate to flee the really, really bad schools.
I dunno, though. I'm willing to be told I'm totally wrong.
30: Eh, being the minority is a big issue for at least some white people. My kids are, and my parents worry about it. (They're not the overwhelming minority -- if you switched the number of white kids in the school with the number of latino+black kids, the school would still look pretty integrated, but white kids are a minority) And my parents are reliably Democratic voters, and are capable of shame on this issue, so they know not to say anything too aggressive about it. But they keep on coming back to it.
people go places where they're minorities all the damned time if they have sufficient motivation
IME this is sort-of true and sort-of not true. It is quite possible to be a white person in virtually every area of the US I've ever been in (rural Alaska being a notable exception) and never, ever be a minority. On the day-to-day level it's really easy, because you just buy a house in a segregated neighborhood and get a (probably professional, but not necessarily) job in a mostly-white office. For the rest of it, you just have to avoid public transportation, only go to concerts/sporting events that appeal to a primarily white demographic, etc.
"Sufficient motivation" for some people is "really quite a lot of motivation". I have friends who won't come to films in the city because they're uncomfortable with the crowd. And these are artsy independent films with studenty/professional-class crowds.
I'm reminded of an NYPD Blue episode where the (black) lieutenant takes the (white) detective to a rib joint where he is the only white customer. Somewhat heavy-handed, but a kind of remarkable illustration of the fact that you can live in New York City and still structure it so you are never in the minority, let alone the only one of your race in the room.
(Sorry, "you" in that last paragraph being Sipowicz, the white cop.)
Here's something else that bothers me about these discussions: surely in the 1970s there were crappy schools as well? Especially because a lot of people only finished high school, not college, was there any difference in income based on high-school education quality? Was the quality overall lower but more homogeneous, or what, and why?
Unfogged needs an economist on staff to answer things like this.
36, 37: Well, being in the minority is to some extent a big deal to everyone who experiences it. But, to put it another way, would the mere fact of being in the minority actually stop most people from sending their kids to a well-reputed school where there were, say, more Asians than whites? Isn't the fear of nonwhite majorities more to do with the fact that black/Hispanic signifies, to the middle class Caucasoid mind, poverty and violence and the kind of schools where you only send double-tough people like Michelle Pfeiffer?
35
"Well, that's a good question. I submit that if we had a floor under which no school district would sink, that would be an external (to an individual family) factor that is in some sense "fixable.""
Since for the most part when people say a school is "bad" they mean it has too many black students (as opposed to say too little money per student) I don't see how you are going to implement a floor.
40: I don't know, DS, it's hard to untangle. Certainly the poverty/violence stuff is part of it, but there's plenty of plain old racism too.
I was one of a handful of white people in a class in college, and the fact that everyone else was Chinese or Korean did not seem to make other white people more comfortable with the class. And that was college. People are much more protective of elementary-school age kids.
I think it was in American Apartheid that Doug Massey published his research on what people considered a "desirable" racial mix in their neighborhoods. As I remember the data, the tipping point at which white people got uncomfortable was always much, much earlier than the mix that various non-white groups were comfortable with.
Ok, so I watched the Elizabeth Warren lecture, and I am sad to see the thread devolve into a discussion of race. But I will continue along those lines with a personal and anecdotal story.
I live in a "bedroom" city, in a 30-yr-old house valued around 100k. We like it just fine. Ther neighborhood is probably majority Latino now.
I walk my dogs around city parks tho, and the neighborhoods I visit are usually a step above that. Say 150 to 250k. At least from my perspective those look like most excellent neighborhoods with good schools, nice cars, well landscaped lawns, observable toys, well-dressed and prosperous citizens.
And as far as I can tell, they are majority black.
This has to do with some demographics and geography/history of the Dallas area, and maybe for people in the 250-500k house range they aren't "great" neighborhoods...but I think they mark a huge leap for black families in the last few decades.
Somehow, after watching Elizabeth Warren, those are the families I want to protect. Not the real poor or recent immigrants, but the 2nd and 3rd quintiles, maybe some of the 4th. Warren shows how at least politically besides economically, you need a secure & prosperous middle-class to have any hope of helping the poor
It's always much cooler to brag, yeah, I went to a bad high school. Lots of gangs. That sort of thing.
The bottom line, and I've been saying this for fifteen years, is that the inflation figures everybody works with are utterly, hopelessly phony. One needs a roof over one's head, after all. In terms of what a median family actually spends their paychecks on, they took a fifty percent pay cut between 1965 and 1990. By disguising these massive pay cuts as general inflation, the middle class actually remained unaware of them! Which is kind of astonishing; I can understand Joe Briefcase, selfish, dull and incurious as he is, being ignorant of exotic foreign affairs, but you'd think he'd notice his own paycheck being chopped!
I had a couple of minor objections to what Professor Warren said. First, I think she's misled by being in the Ivy League. She claims that sending one's children to an academic pre-school (at the middle-class parents's expense, rather than out of the general tax fund) is a necessary precondition for their admittance to the middle class. I'm ignorant about life up in her stratosphere but I certainly don't think that academic pre-school is necessary or even significant for applicants to colleges outside the Ivy League. But a minor cavil, of course.
Second, I also watched another YouTube piece by Professor Warren where she claimed that the main driving force behind the vast increase in the cost of health care is the proliferation of new, cutting-edge, expensive therapies. But why then does it cost six times in "inflation-adjusted" dollars as much to get a broken arm treated as it did in 1970? Is there some expensive, superior new technology in bone setting that has been introduced since then? No, that's simple class war.
I should watch this, but ugh, I'd much rather read for an hour than spend an hour watching video. I do like Warren generally, and I wrote up a bunch of reactions to The Two-Income Trap here a couple of years ago.
The point in 15 about 1970 being a high point is good, too. I do think that any analysis of the current state and future direction of the American middle class has to start with the idea that the 1945-1970 period was exceptional, not normal, and will (probably? hopefully?) never be achieved again.
1. Is there a transcript somewhere?
2. Warren and Tyagi's Boston Review piece "What's Hurting the Middle Class" is quite good, as are the responses, in particular by Gruber's, Mannng's, and Crockett's.
Okay, I watched it. It's about as depressing as I expected, and it covers essentially the same ground as the book but with more current data.
The big questions, for me: What about non-homeowners? Are they too insignificant in this income class to count? Are they, by definition, not middle class? Have they experienced the same drain on their housing dollars?
What fraction of the middle class has to be involved in these status- or achievement-related bidding wars for "good" schools for this effect to take place, since some people are otherwise constrained; 100% of the middle class is not playing the pay-[in housing costs]-for-the-best-schools game.