Transcript: Michael Lind
My interview with the Hell to Pay author
“What do falling fertility in the United States, a plague of loneliness and lack of friendship, bitter conflicts over racial and gender identity, and a politics of culture wars and moral panics have to do with one another?” The answer to that question, according to a compelling new book, is too many bad, low-wage jobs.
Michael Lind is a bestselling author, a columnist at Tablet Magazine, and a co-founder and fellow at the New America think tank. His latest book is Hell to Pay: How the Suppression of Wages Is Destroying America.
This is an edited transcript for paid subscribers. You can listen to the episode for free here.
TH: Michael, welcome to Lean Out.
ML: Thanks for having me.
TH: It's really nice to have you on today. We spoke for your last book, The New Class War, which had a huge impact on my thinking, so I'm really pleased to get to speak today about Hell to Pay. In this book, you argue that an economic crisis of too many bad low-wage jobs in America is implicated in a series of other cascading American crises: a demographic crisis, a social crisis, an identity crisis, and a political crisis. This book grew out of a Tablet piece you published right after January 6. When did you know that you had a book here?
ML: There was a lot of response to my Tablet piece, and this was a logical successor to my 2020 book The New Class War. Although it's more narrowly focused on the U.S., simply because a lot of labour laws are specifically national rather than shared, I think people in other countries will find a lot that's relevant to their own societies.
TH: Absolutely. Let's start today by talking about what the life of a low-wage worker in the United States looks like right now. Paint the picture for us.
ML: Most low-wage workers are concentrated in a few sectors. Retail is one, hospitality, leisure is another, fast food. We've seen Amazon warehouse workers are among the low-wage workers. People working at Starbucks, for example. In the United States, Walmart was notorious for its low wages. Now, under pressure, Amazon and Walmart have raised their wages somewhat, but a lot of small firms in those industries have not.
The really horrifying thing about these industries is that the wages they pay are so low that a full-time worker cannot earn enough to support himself or herself, much less a family. The low wages, the poverty wages, really need to be topped up by public assistance of some sort, welfare as we call it in the U.S. — meaning means-tested public assistance, as opposed to universal entitlement programs like Social Security or Medicare.
Some of this takes the form of direct cash transfers to these low-wage workers, like the Earned Income Tax Credit, a wage subsidy that is collected at the end of the year from the Internal Revenue Service. Others are things like food stamps and housing vouchers. The result is that for these workers, as I argue in my book Hell to Pay, we have a low-wage/high welfare system. It's not a high-welfare system in the sense that it's generous welfare; the U.S. is very miserly compared to other English-speaking countries, and certainly to European countries, when it comes to welfare benefits. But the benefits are high as part of the overall income of the worker. I pointed out a case in New York state in the last decade — this is from New York State government statistics — wherein a low-wage worker would get maybe half of that worker's income from government transfers topping up this low wage.
It creates, really, an underclass of workers who are different from other workers. Most workers in the U.S. are not in this category. Somewhere between a quarter and a fifth belong to this working poor category. For those who are trapped in these low-wage jobs, there's this dilemma. They can't access welfare benefits without taking a low-wage job, but because the wages are so low, they can't earn enough money to escape from dependency on welfare.
TH: In the book you go through, as I mentioned, these crises that are all implicated in this. I want to go through one-by-one, because I think it's really interesting how the low-wage jobs contribute to them. Let's start with the demographic crisis — something I've covered a fair bit on the podcast, given that Canada's birth rate is at 1.4. So, well below replacement. Tell us where America is at with its fertility crisis, and the role that low-wage jobs are playing here.
ML: The U.S. used to brag about its demographic exceptionalism — having high birth rates compared to other Western countries. The fertility rate in the U.S. now is down below 1.5. You need 2.1 in order to have a stable population. Even immigrant groups, which were supposed to be the salvation with their high birth rates, turn out, after a generation, to assimilate to this low birth rate norm. Which suggests there's something in the environment that's causing it. That it is not primarily cultural.
I argue that what is causing the low birth rates, not just in the U.S. but in other industrial democracies, is the fear of falling into this trap of the low-wage workforce. Or The Precariat, as it is sometimes called. Even though most people are not in it, they're worried about sinking down into it. The way you avoid sinking down is by credentials.
Now, in the old days when we had collective bargaining, unions made sure that there were no working poor. If you worked full-time, you weren't poor thanks to the union, if that industry was unionized. In the absence of that, people want any advantage they can to get a decent wage job. They have been told, correctly to some extent, that you need a bachelor's degree, or in some cases, you need an occupational license.
We see two credential arms races going on. One is things that didn't used to be licensed, like florists; flower arrangers now have all of these licensing requirements. That makes economic sense, because it creates a cartel among florists that keeps out the competition, and therefore it bids up the fees they can charge.
A similar cartel, if you think about it, is created by college diplomas. The problem with the college diploma is the value is in the scarcity. As more and more people get four-year diplomas — it's now about 40% in Europe and it's creeping up in the U.S. — then it becomes devalued. It becomes like a high school graduation diploma.
What does this have to do with the demographic crisis? It means that young people, instead of graduating from high school, or the equivalent in various countries, can't go to work at a living wage job, or even an apprenticeship, that leads to a living wage job and start a family and buy a starter home. They just can't do that. They have to spend more and more of their 20s, and sometimes 30s and 40s, obtaining what are very, in some cases, expensive credentials. Sometimes they're subsidized. [But] in many cases, in the United States, you have to take out student loans. Repaying the loans makes you defer family formation, home ownership, because it's a huge cost every month for these graduates.
What you find — I talk about this in my book. This is not original, but I'm bringing the data together. You see this class divide. Some people call it “the diploma divide in marriage,” where college-educated people — who are still a minority in the U.S., although it's about a third and growing — they are much more likely to be married and to have stable marriages. But they marry late. Often both partners have, not just a BA, but maybe a Master's, or an MBA, or a professional degree of some kind. They postpone marriage, but they do have traditional 1950s families within what, in my book The New Class War, I call the college-educated overclass.
The working class is in much worse shape, in terms of family formation. They, too, defer marriage until they feel financially secure, but many of them will never be financially secure. A lot of them go and have children, thinking that they will get married in the future when their economic prospects are better. You have this growing rate of births out of wedlock with working-class people of all races. It's not a racial or ethnic thing in particular. It's a class thing.
Would a living wage for everybody ameliorate this? There are cultural factors, of course. There are religious factors, things like that. When you ask people why they didn't get married, the number one answer is they felt financially insecure. The same thing goes to the number of children they have. Most American women say they want two or more children, but if that were the case, our fertility rate would be above two. It's a fraction of that, and it's unsustainable. It’s declining. There, it's both financial security, but also it's time. You might not have time to have kids by deferring family formation so long.
TH: Yes. It's so interesting, all of the trends that you're talking about I recognize in my peers and in our lives. You also write about a social crisis that is happening throughout America, this epidemic of loneliness and isolation and deaths of despair, which is also very prominent in Canada. We've covered that on the podcast. We recently had Brendan Case on, talking about his piece for Compact, in which he cites your work. How do bad jobs influence that crisis?
ML: You may remember Robert Putnam's work in Bowling Alone. If you look at social life of the working class in the middle of the 20th century, in the U.S. and in similar countries, a lot of it revolved around trade unions, among unionized workers, among organized religious communities, which were much more influential. Back then, far more people belonged to churches. Then, even in politics, we still had mass membership parties. The parties were not just labels that billionaires bought, with teams of spin doctors.
All of these mass membership organizations have crumbled, partly because of a lack of time and regular schedules. One of the results of this has been something that the great French sociologist Émile Durkheim diagnosed in the 19th century. He coined a word for it from Greek, anomie, which means normlessness, or isolation, or alienation. He was seeing this in Britain and France in the early industrial era, when these villagers came to the big industrial city. They had no contacts; they didn't have family in the city. It led to, in that case, waves of suicide that he studied.
Now, interestingly enough, his proposed solution — which is not well known, because his essays on this were not translated into English — were guild-like, union-like organizations. You spend most of your time, most people do, at work. Particularly for big organizations, in the United States, a majority of private sector workers work for a company that has more than 500 employees. It's not a mom-and-pop economy anymore. Hasn't been for generations. It's a big company economy. You don't have any union to represent you, or to socialize with. Or you're afraid of socializing because HR is telling you that you might say something wrong and offend somebody.
Having said that, professionals in the United States and elsewhere have pretty decent professional lives. They have professional associations. They can go to extended training seminars; they can go to conferences and hotels. They're on various mailing lists. So, professionals have a fairly good social life.
It's the working class in particular. And the worst off are those without steady schedules. Gig economy workers, for example. Or retail workers. You don't know what your hours are going to be next week, so how can you plan to go on a picnic with your cousins, or to do something with your friends? What if it's a couple and the partners, their schedules change randomly? They don't even know when they're going to be together. This is incredibly stressful. And I think the centre-left has neglected this in the last generation, because they only look at money. How much money are people making?
If you have one person who is making money because of a living wage and you work 30 hours a week, and then the rest of the time is free time, and you have a regular schedule, you have a much happier life than someone who's making the same amount of money as an Uber driver or a Lyft driver. Maybe there will be a convention in town one week and you'll make lots of money, and then you won't make any money the next week. We need to get back to thinking about schedules.
Just to wrap this point up, polls show that young Americans, and this is true across the Western world, have fewer friends than anybody in recorded history, starting with their Baby Boomer parents and older relatives. It's just a collapse of friendship, of dating in many cases, of marriage. If something like this is happening simultaneously in English-speaking countries, in continental European countries, in East Asian countries like South Korea and Japan, it suggests that it can't be some unique cultural factor. It has to have something to do with the nature of work and the nature of wages and the nature of credentialing.
TH: It's so interesting. When you talk about those young, unmarried, childless, socially-isolated 20- and 30-somethings, you made this great point in the Tablet piece that that's exactly who can be easily mobilized by both the left and the right for partisan conflicts. I do want to talk about the identity crisis. You write in Hell to Pay that identity politics are best understood as "status competition within the college-educated overclass." Talk to me a little bit about your thinking on the identity crisis.
ML: The identity crisis, identity politics, as you say, it preys on people who … Instead of being part of communal networks which define them — I'm a member of this town, this state, this religious congregation, this particular trade union, this party that's a real party federation, where I actually know people who work in the political party — if instead you have people who are completely isolated and they have few friends, their identity is kind of up for grabs. This is particularly true of the upper-middle class, college-educated people who are heavily online. Working-class people are not spending lots of time on Twitter.
By the way, just as an aside, this is why the whole Russia conspiracy theory about Trump's election through Putin manipulating memes didn't make any sense. Because Trump won with a lot of white working-class people in industrial states voting for him, and then they voted against him, in some cases in 2020, and he lost. They're driving trucks. They're delivering oxygen tanks to old people in their homes. Right? They're standing up at grocery stores.
It's really the professional class, the “laptop class,” as some people call them, who have a lot of time and they're surfing online. Some of them are lonely and isolated, and they look for communities online.
The term community, I think, has been abused in the age of identity politics to mean category. For example, “male” and “female” are not communities. Those are categories. It's like left-handed and right-handed is not a community. We have these abstract communities and races … They are social facts to a certain extent, but also a lot of the categories are just fabricated.
For example, the United States census made up this category of “Asian and Pacific Islander” in the 1980s and '90s. There's no such thing as an Asian and Pacific Islander. There's no community of interest, or of descent, or culture, that unites Filipinos and Indians and Chinese and Japanese. This is just a completely arbitrary category. But it takes on a life of its own when it is backed by the government, by the universities, by affirmative action policies, but also by the Internet.
You see this with the proliferation of identity flags. Originally, there was the Kente cloth. This was Black nationalist. That itself was a category because Americans of partial African descent, or the descendants of slaves in the South, really have very little in common with people in Kenya or people in Barbados or whatever, apart from some genes. Even Black nationalism was always a category movement. As was white nationalism. It's kind of ridiculous to say white Americans have some mystic affinity to Italians and to Norwegians, and to Czechs. This is all fantasy.
This might be harmless fantasy if people belong to these imaginary communities — that exist largely online that don't have any historic basis — if they weren't being weaponized in competition among individuals. This is part of the problem with race-based affirmative action and gender-based affirmative action.
Now, you can make a case that breaking down the all-white male buddy networks, that existed after the end of segregation and the women's rights revolution, makes sense. But if you get systems of quotas, where you're demanding that every office, every sports team, every theatre play cast exactly corresponds to the U.S. census as of the last census in 2020 — of course, it changes every 10 years — then you have a motive for people to play games with their own identities. We have more and more of, in the United States, they're called “pretendians.” These are so-called "non-Hispanic white” people. I say that because that's a bogus category too. They try to pass themselves off as Native Americans, because there's money and jobs involved.
A lot of the “woke” language is similarly weaponized. One week you say person of colour and anyone who did not get the memo, who says coloured person, is then denounced as a bigot and a racist. Then, if your boss at your bureaucracy hasn't gotten the latest memo on the right ways to talk about things, and sensitivity, then you can denounce your boss and drive the boss out, and something opens up.
We're seeing this particularly in journalism in the United States, where an entire generation of editors and of writers have been purged. Now, maybe it's good for them to be purged, and have some turnover for new talent. But they were purged for angering the young 20-somethings and 30-somethings, who successfully used their micro-aggression supposedly, or their lack of — not gross things like sexual harassment, but not having exactly the right positions on particular issues. It creates a really illiberal environment. It does remind you of the Soviet Union, or of a totalitarian state, in which you make one false statement, you make one reckless remark, and you're ratted out. And not to the secret police, but to the HR department.
TH: Certainly in journalism in Canada, we're dealing with the same dynamic and it is quite chilling. Before we move on to some other points, I do want to touch on the political crisis aspect of this as well, which you argue is driven by culture wars on the right, and moral panics on the left — we've just been talking about that — and a political class that is not aligned with voters' concerns and often acts instead in the interest of its donor class. What role do low-wage jobs play in that?
ML: The essential change in U.S. politics, and this is true in other countries as well, was the disappearance of private sector trade unions as political actors. Because the unions, they were lobbies for working people and they could pressure politicians. They could lobby for working people between elections. Not just at election time, but between elections. Like other lobbies. Their essential extinction in the United States … Private sector union membership has gone from about a third in the '50s to 6% in falling. Now it's almost extinct. It's lower than it was under Herbert Hoover, before the New Deal in the 1930s.
When you combine this with the primary system in the U.S., in which the parties — which really don't even exist in the U.S. at this point, they're just labels — the parties don't choose their own members the way they do in countries with parliamentary democracies, like Canada and Britain and Australia. They're chosen in elections open to the public. The primary election selects the candidate, and then the winner of the primary election goes on to the general election.
We know from the data, which I put forth in my book Hell to Pay, primary voters are much more educated and much more affluent and well-to-do than the general electorate is at large. They're also more ideologically extreme. And this cuts against one of the cliches of the establishment, which is that we have this sensible centrist establishment, and we have these crazy far right and far left lunatics in the working class. It's actually the opposite. If you look at the Democratic working class — disproportionately Black and Hispanic — and the white working-class voters, many of them Republicans now, and you ask them what their priorities are, it's very quotidian things. It's jobs and wages and inflation and neighbourhood safety and good schools, and so on.
If you look at the Democratic and Republican primary voters, on the left, it's abortion, gay rights, trans rights, climate change. All non-negotiable issues. They may be valid, but you can't compromise on them, unlike economic issues.
On the right, it's just a series of things. Outlawing abortion. They've lost on gay marriage, but focus now on trans rights. This just consumes the politics of the elite left and the elite right. They're both heavily on Twitter and on social media, and this is what they want to talk about.
There's 10,000 tweets of left and right on some trans issue, or on books in kindergarten about gay rights or something like that, for every one tweet — if there's one tweet at all — about raising the minimum wage, or about community policing to lower the crime wave that's going through the U.S. right now, in the aftermath of COVID, and protests against policing following George Floyd's death.
Really, you have “the selectorate,” if you want to call them that, the people who select the politicians. They have more in common with each other socially, in the Democratic and Republican party; they're both much more likely to be college-educated, affluent. Their material needs are taken care of, and so they can just war about these issues. Which are not unimportant issues. But they're not the issues of the working-class constituents of their own parties.
TH: I want to talk about how we got to this point. You write in Hell to Pay, "Today the United States is unique among developed nations when it comes to the thoroughness with which the economic overclass has decimated the bargaining power of the multiracial working-class majority." This situation has been achieved by employers crushing worker bargaining power through a number of different strategies. Offshoring and de-unionization are probably the most famous, but contract work has also gotten a fair bit of attention. But there are a number of strategies that you explore in the book that I had never thought of before, including salary bands. Walk us through how that particular strategy works.
ML: The myth is that your salary is set by the magic of the labour market, where somehow there's some formula for how much you contribute to the profitability of your firm, if it's a private sector firm. Somehow this is mystically communicated to the employer who knows exactly how much to pay. This is all ideological nonsense. As I argue in Hell to Pay, wages are based on the relative bargaining power of the employer and the worker. This is not some radical left-wing idea. That was the view of Adam Smith, and of J.S. Mill, and of Alfred Marshall, the founder of modern neoclassical economics. It's bargaining power.
Because compensation is the largest cost of most private sector employers, there's a lot of money to be had in minimizing wages. The best way to minimize wages is to minimize bargaining power. If you can get rid of organized labour and collective bargaining, that's the most important one. If you can keep lowering bargaining power — even where you don't have unions and never had unions, for example, with professionals — you can do it through outsourcing.
Now, we tend to use outsourcing for offshoring, that is, moving things to other countries. But, technically, outsourcing means taking a job that used to be done in-house, within the company, and then outsourcing it to a contractor. In the U.S. labour laws, when you turn the former in-house worker into an outsourced worker who's a contractor now, then you can pay them less and you don't have to pay them benefits. They're basically exempt from all these labour protections.
As you say, there are salary bands, which is something I discovered working for a large organization, a nonprofit in my case. If you ever wonder how in a big bureaucratic company or nonprofit, or even a government agency — how do they decide how much to pay a receptionist? How much do you pay a department head? How much do you pay an executive vice president?
Well, the answer is they look at what everybody else is paying. Which makes no sense if you believe the economist's theory. Because your company may actually need a really good receptionist for $100,000 right that moment, if it were based on the company's need. How is it that they can compare costs which each other? It's illegal in the United States under the Sherman Anti-Trust Act for companies to do this, but they use consultants to get around it.
What are called salary bands are, basically, a hiring cartel where the employers in a particular industry agree indirectly among each other, using these consultants as intermediaries, that we're going to have floors and ceilings for particular occupational categories. The receptionist — the floor of salary is this, the ceiling is that. None of us in this field will pay our receptionists more than the ceiling, and we won't pay our department heads more than the ceiling.
This is a way of reducing the bargaining power of the worker. Let's say you are really a brilliant receptionist, or you are really a brilliant department head, and you want a raise. If you read the business management literature — and I've read it — they say, “Well, you can't give them a raise above the ceiling. The whole system will crumble. You have to change their category to another category.” This is a wage cartel.
Wage cartels — illegal as they are, and anti-worker as they are — they're created by other methods as well. One of those methods is no-poach agreements, which are completely illegal violations of anti-trust law in the U.S. As I point out, Google, Apple, Disney, many other companies conspired to do this with their tech workers for a decade early in this century. They finally got caught and had to pay fines, but it's a slap on the wrist. They have so much money.
The way no-poach agreement works is the companies get together and they say, "Okay, if you don't hire away our workers, we won't hire away your workers." But they do this in secret. The purpose of this is to prevent a really talented worker from going to the boss at Apple and saying, "Well, if you don't give me a raise, I'm going to go work for Google." Then Apple, in this case, Steve Jobs — who orchestrated this no-poach conspiracy in the early 2000s — is laughing. Because he knows Google won't hire you. They don't even tell the workers this. There's this invisible blacklist among the employers. And this is filtered down even to fast food chains. Burger joints won't hire people who quit another burger joint because if that happened, then workers could start playing the burger joints against each other to bid their wages up.
A formal version of this, which is legal — and the Biden administration, thankfully, is looking into this — consists of non-compete agreements. That's where — among the 80 pages that you sign in the United States when you have a jobs contract, all this fine print, they say "Initial here. Initial there" — it says things like, "You will not work for a rival of this firm for 10 years after you quit." In the case of one non-compete agreement of a friend of mine: "You will not work for any firm in this business within 2,000 miles of New Jersey. Ever."
Then you've signed your name to this, and you're contractually-obligated to give up all of these opportunities.
Sad to say, there are lobbyists and lawyers who make a great deal of money figuring out how to weaken the bargaining power of workers, even through contract law and through practices like a salary bands, that most people are completely unaware of.
TH: You also write about mass immigration. As you point out, this is a huge taboo in our era. Mainstream thinking, as I understand it, is captured by a quote in your book by the economist Giovanni Peri, “There is no evidence that the inflow of immigrants, over the period of 1960 to 2004, worsened the employment opportunities of natives with similar education and experience.” You write in the book that this statement is demonstrably false and that people of goodwill can disagree about particular categories and quantities of immigration. I encourage everyone to read that section; there's a lot of data. But what I wanted to draw from that is, as you point out in the book, this is something that is very new, in terms of the left. The left used to look at lower immigration based on labour economics, and used to be opposed to globalization in general. The WTO protests in Seattle were just in 1999. What happened?