The Double Income Family Amplifier

 There is a general concern about the widening gap in income between the wealthy and the average worker.  In the analysis of how that gap has developed I have never seen anyone mention what I see as a very fundamental cause:  the growth of two incomes in a single family and their often amplifying effect.

In the 50’s, the era we nostalgically view as a high point in middle class opportunity and standard of living, most families had a single income, which was typically the father’s.  Then, in the 70’s and onward, two major trends led to major changes.  The first was the feminist movement, which launched women into careers in great numbers.  The second was the decrease in real wages.  In order to compensate for this decrease and still be able to meet the rising expectations of the American dream, many middle and lower economic scale families chose to have both adults work.

The increased opportunities for women are indisputably a positive thing and long overdue.  However, an interesting dynamic occurs that exacerbates the income gap.  In general, a woman who is well educated and pursues a lucrative career path will end up marrying a man who is also well paid.  Doctors will marry doctors, lawyers may marry lawyers, engineers will marry engineers and so on, with all the possible permutations.  This may not always be true, but I am guessing that it is true well over 70% of the time.

Then, a simple arithmetic fact becomes apparent with this example:  if you have single wage earners with salaries of $30k and $100k, the difference is $70k.  If their spouses are in similar professions at a similar level of salary, then the combined salaries are $60k and $200k respectively, which give a differential of $140k.  This is a very large income difference that produces a dramatic lifestyle disparity.  Even if we assume that the $60k family can live reasonably well on their income, which, when one considers that childcare, healthcare, transportation and a host of other expenses chip away insidiously at one’s available income, is certainly not a given, the unrelenting reminders of such a large difference in lifestyle must certainly be dispiriting for those near the bottom of the income ladder. 

And of course $100k is not even a very high salary.  Two doctors who are married will easily pull in a combined $500-$800k, or even more.

There is no easy ‘solution’ to this acceleration of the income gap.  The genie is out of the bottle and no one wants to return to a world where women stayed at home with no career opportunities.  And it is also unlikely that we will evolve to a world where doctors marry fast food servers.  If anything, the situation will become even more complex and fractured as more middle class jobs are eliminated by automation.  Thus, we seem to be destined to become a more skewed society of haves and have nots, which cannot be a healthy situation even if the have nots are not starving or destitute.

It's A Wonderful Life

Well, it is Christmas again - and time for another tearful/joyful viewing of Frank Capra's 'It's a Wonderful Life'.  Perhaps you've seen it recently too?  Jimmy Stewart is George Bailey, the hero whose dreams of exotic adventure, business success and travel never materialize because he is always giving himself to others, but whose generous and principled existence is nonetheless a beautiful portrait of life lived to its fullest.

Once again I find myself weeping at this poignant reminder of where the true value in life lies.  Isn't it funny that I've seen this picture a hundred times, yet have come no further in incorporating its message in my life?  We all love George Bailey, but almost none of us chooses to follow his path. 

It's not that we are actively evil, like Mr. Potter (the conniving banker who is hated by the entire town).  But as much as we appreciate the simple treasure of George's life as a romantic  ideal, our real life passions are not so easily redirected.  We humans are somehow bound to chase after wealth of a more conventional nature - the very booty that George spent his whole life desiring and never achieving.  We are really more likely to aspire to be Sam Wainwrights (George's opportunistic boyhood friend who seems to have little depth, but becomes wealthy and worldly) than George Baileys.

Even George really does not seek the noble life that he lives.  He tries on numerous occasions to escape from his humdrum existence only to be foiled by various catastrophes that require him to sacrifice his own dreams to rescue others from dire circumstances. 

The film ends rather abruptly after a Dickensian dream sequence demonstrating to George the impact of his life by showing the sad state of affairs that would have resulted had he not been around.  George sprints home with joy in his heart and discovers that his years of sacrifice will not go unrewarded. His friends and neighbors rally around him.  Surrounded by friends and family singing Auld Lang Syne, George seems to understand that his is the essence of a fulfilled life.

But one is left with the question of how George would have felt with the passage of time.  Would the epiphany he experienced with Clarence the Angel have given him a lasting conviction about the value of his life, or would the longing for more exotic experiences and worldly recognition have eventually crept back into his psyche?

Why is it so difficult for us to embrace and act upon the simple truth of this story?  Perhaps it is partly because the truth is not quite so simple.  There are many natural contradictions in life that cannot easily be resolved.  In a sentimental moment we may extol the virtues of the simple life and the primary importance of friends, family and love, but we are easily seduced away from these ideals by the sirens of wealth, adventure and power.

The human spirit seems to quickly lose patience with a placid, humble existence.  Consider the many movies and books that celebrate the passionate young soul who breaks free from a stifling, small town environment and achieves wealth and fame in the big city.  It seems we are doomed to vacillate between the poles of frenzied ambition and sedate acceptance.  We are a restless people who find it difficult to be content with our lot in life.

If one speaks from the perspective of true intentions, one might describe George Bailey as an accidental saint.  But on the other hand, when the difficult decisions had to be made, George always took the high road, the one that clearly was going to dash his hopes and dreams but allow others’ to flourish.  Most of us are subject to George Bailey’s dreams of wealth and fame, but few of us are so selfless and willing to sacrifice them for the sake of others.  This, in the end, is the moral lesson of It’s A Wonderful Life.

Politics - why are we so divided?

A while ago I wrote this to try to understand why people who love and respect each other and have the best intentions can differ so markedly in their political views:

For years I have been astounded by the fact that people I love and respect can have such profoundly different political views than I have.  How can this be?  Discarding the tempting conclusion that I am simply a lot smarter and perceptive than they are, I have come to believe that the true differences between conservatives and liberals are more subtle and less dramatic than one would expect.  Somewhere in the process of taking concrete, basic values and abstracting them to larger political, social and economic concepts, we sprint off on very different paths.

Most of the people I know have similar core values.  They believe in hard work, a high moral and ethical standard, honesty and compassion.  On a micro level, the stereotypes for liberals and conservatives don’t really apply.  Many of the conservatives I know are involved in humanitarian projects and are, by all indications, compassionate, caring individuals.  Likewise, the liberals I know are hard-working, motivated people who value the marketplace and recognize the joy of accomplishment and success.

The divergence in beliefs comes when we consider the imperfection of human nature and its consequences, and it becomes more pronounced in the type of idealized societal scenario we are inclined to believe is possible.  In essence, whether you are a conservative or a liberal comes down to which human frailty you consider the most dangerous or pernicious! 

Conservatives focus on the slothful nature of mankind, the fact that humans will avoid work and take advantage of the work of others if given the opportunity.  They believe the biggest threat to society is indolence, and that the energetic and motivated must drive the progress of civilization, or stagnation and paralysis will result.

Liberals interpret the fallibility of human nature with a different slant.  They fear the basic human qualities of greed and avarice, and are convinced that the corrupting nature of wealth and power must be offset in some fashion to avoid gross inequities and the polarization of society.

Clearly both of these criticisms of human nature are valid.  It is not unreasonable to view the whole progress of the economic, social and political aspects of civilization as a balancing act between these two sets of human weaknesses.

For what is capitalism but the recognition that human progress is best fueled by competition among men and women?  Even the most ardent conservative and capitalist will have to concede that competition, with its propensity for dividing the world into winners and losers, and its potential for inflicting great tragedy and disappointment on those losers, is a means to an end that has manifold flaws.  But what liberal can argue that there is a more effective economic system than capitalism? 

An interesting corollary to the cynicism of these views is the passion we all have for idealistic, utopian models for society.  These models tend to portray the world in very black and white terms, causing reverential and passionate allegiance on one side and eye-rolling dismissal on the other.  The writings and envisioned utopias of Ayn Rand and Karl Marx come to mind.  What liberal does not smirk in contempt at the “Who is John Galt” bumper sticker, and the Pavlovian response of the conservative to the word “socialism” has almost become quaint.

The world is no perfect place, nor will it ever become one.  Anyone trying to create the perfect balance of income distribution and economic regulation with free market dynamism is faced with two sobering realities at the margins:  the greed and powerful manipulations of some of the rich and privileged, and the sloth and opportunism of some at the lower end of the scale of human activity.

How can one create an effective safety net for those upon whom misfortune has truly fallen and not also create an opportunity for the lazy to avoid hard work or responsibility?  How can one minimize the regulations and restrictions for business and still avoid the cronyism, insider trading, market manipulation and outright corruption that tempt even the most ethical?

Perhaps if we started out recognizing the basic contradictions and irreconcilable attributes of human nature that condemn any socioeconomic system to at best a discouraging compromise, then we could discover a more tolerant approach to grappling with policy issues.

Stepford University!

After one of my recent visits to my alma mater, I somewhat mischievously penned this critique of its current superstar status.  It reflects my concerns about the hyper-competitive and materialistic trends of our society, though it is perhaps a bit harsh and undoubtedly exaggerated in its depiction.

I had a dream last night. 

It was about my alma mater, Stanford University.  I flew back for a visit and found that it had changed its name to Stepford University.  When I drove up to the campus I was amazed to find out that all of the students were perfect.  Every one of them was a successful entrepreneur by the time he or she graduated.  Most of them were also playing varsity sports on teams that won championships every year.  They were all incredibly good looking with perfect bodies and bright smiles that radiated energy and confidence.  They were so diverse – White, East Asian, South Asian, African-American, Hispanic  – yet somehow they all looked and acted pretty much alike.

Every student already had a resume that seemed superhuman.  But these resumes were only the first step to the dizzying heights of accomplishment that they expected to ascend.

As I wandered the campus I looked for students who were pondering the basic questions of existence and who were confused about their place in the world.  I listened for conversations about Camus or Keats, but instead heard talk of Google internships, McKinsey bonuses and first year Wall Street salaries. I suppose that there must have been some students who were searching for meaning and grappling with self-doubt, but I couldn’t find them. 

I tried to find the university I had once attended -  the one where the students were pretty much normal kids, maybe a little brighter than average but humbled by their lack of experience and knowledge; the one where the sports teams had occasional success, but played for the sheer joy of it, more often than not in obscurity; the one where no one was angling to be a billionaire a few years after graduating, but rather was more concerned with being a college student and seeking knowledge and understanding; the school with the open fields and spaces all over campus instead of the dense mass of buildings and dedicated fields named after rich alumni or corporations. I tried to find that school, but then I realized it no longer existed.  Stanford had become Stepford.

I had a dream last night.  I’m sure glad it was only a dream.

Thoughts on the Panic Over Engineering and Science Education

Don’t Panic!  U.S. Still the Land of Engineers and Scientists

In recent months it has been popular to lament the sad state of our educational system and propose various ways to encourage more vigorous study of math and science. The fear that our weakened economy will soon fall victim to legions of Chinese and Indian engineers and scientists has caused much distress to politicians and corporate executives. 

It is true that we have built a system of tantalizing incentives that appear to lure the so-called ‘best and brightest’ away from the ascetic land of the sciences and toward the money-soaked, hedonistic shores of finance, consulting and corporate law.  An engineering or science graduate of a top university (e.g. MIT, Cal Tech, Georgia Tech, etc.) can expect to earn a small fraction of the treasure offered to graduates from top MBA or law programs, or to those heading off to Wall Street or consulting firms.  In a society where wealth and conspicuous consumption are worshipped more fervently than any deity (despite protestations and rationalizations to the contrary!), it seems natural to assume that our brightest youth must surely be hearkening to this siren call of great wealth and rejecting the more difficult and less lucrative path of engineering or scientific endeavor.

But do not despair!  The love of knowledge and truth, and the inclination to create and build, are more powerful elixirs even than the inebriating brew of huge salaries and bonuses.  Our schools are still filled with extremely bright students that choose science and technology because they want their lifework to have meaning and to be fulfilling.  The U.S. has the best engineers and scientists in the world and is the Mecca for promising technical talent from every country.  We can be proud of the fact that we not only fill our companies and labs with incredibly clever and well-educated graduates, but also seed the rest of the world with talent.  

These students will toil in the relative obscurity of cubicles in thousands of companies across the land.  They did not choose the road less travelled to get rich quick.  A few will achieve wealth through entrepreneurship or by being in the right company at the right time.  The rest will simply do the heavy lifting of our industrial world – creating the next energy technology, designing a new transportation paradigm, applying robotics to a thousand uses, engineering new biological and chemical solutions to medical or environmental problems and so on.  Most of these engineers and scientists will not be rewarded richly for their labor in any material sense.  But they will love their work and live good lives.  I would not be surprised if they are on the whole much happier than the billionaire hedge fund managers and their ilk.

It has been said that the consultants, the bankers, the traders and the corporate lawyers are the ‘smartest guys in the room’.  But I believe the smartest guys are not ‘in the room’ at all, they are back in their cubicles moving the state of the art relentlessly forward.  We didn’t lose the best and brightest to the glamour of Wall Street, only the greediest.  The best and brightest are, thank God, still on the job and tinkering about to make a better world.

On Starting a blog

At the risk of seeming narcissistic, I thought I would blog some of my thoughts and ideas to keep track of them, and maybe to see if they resonate with anyone else's.  I have written short essays and intermittent journals for years, but not very consistently and they are spread over a variety of computers, digital media, scraps of paper, notebooks and letters.  So I shall see how this goes.