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I think if we want to understand the recent surge of populist movements in western countries, this study gives one good reason for it. Regardless of wether stat

I think if we want to understand the recent surge of populist movements in western countries, this study gives one good reason for it. Regardless of wether statements/positions of those groups are correct or outrageous. “In Sweden, for example, where the government intervened to preserve jobs, market incomes fell or were flat for only 20%, while disposable income advanced for almost everyone. In the United States, government taxes and transfers turned a decline in market incomes for 81% of income segments into an increase in disposable income for nearly all households.” So, protectionism works? At least it seems consequential to me, that for western workers came with globalization an increase in wage-competition from workers in emerging markets. That most western workers can afford much more from their flattened or fallen income than they could 10 years ago is the other part of the story that neither this data-point tells nor the populist movements.

HillaryBriss 10y ago
> ... most western workers can afford much more from their flattened or fallen income than they could 10 years ago ... Afford much more of what? It's probably easy to find evidence that computing power in a smartphone is more affordable. But, can people now afford more quality in their children's education or their family's health care? And what about food? Maybe the price per calorie has actually decreased in real terms, but what about the quality of those calories? Is a calorie of corn equivalent to a calorie of fresh fruits and vegetables? And housing? Is a condominium equivalent to a house with a yard? etc. It seems like a mixed picture. Some things are more affordable, but some other important things appear to be more expensive.
- justin66 10y ago
  > Afford much more of what? Junk you can buy in a store. Education, health care and real estate are a totally different matter.
  - LesZedCB 10y ago
    > Education, health care and real estate are a totally different matter Yes, and totally inaccessible to the people that the folks in this thread are saying allegedly have a better quality of life because they can afford useless commodities.
  - woodpanel 10y ago
    I hate to sound aggressive or confronting, but will say this: you do have heard of a thing called "the internet"? ;-) we have lots of knowledge for free now. Degrees however are a different story. Here, the same competition Western workers face from abroad due to globalization, the same competition now students face as emerging market's rich dads prefer to send their offspring to western universities.
ZoF 10y ago
That they can afford more, I would assume, is because things are cheaper. clarified below To me it feels like quality of living per dollar has risen tremendously over the past generation, but income per household hasn't. So while quality of living overall has improved, it doesn't 'feel' like it with regards to individual wealth. That is to say, an upper-middle class person 15 years ago might feel lower-middle class today even with a better QoL overall. I would definitely agree that this kind of stagnating income in the middle class is a large part of what is pushing these nationalist/populist movements. It's definitely not a popular sentiment on HN at the moment(nationalism), but I can definitely see the allure; especially for the lower-middle class who have lived through the past ~15 years and aren't seeing the same increase in wages/authority that the previous generation did. Personally I have yet to see a real cogent argument for why globalism would help here at all with regards to the growing income inequality in developing nations. From my perspective a single centralized government(e.g.: the EU) can only really benefit the multinational corporation and almost by definition be of detriment to the individual nation-states. It's hard to really grok the reality of the situation from unemployment/income statistics because they don't really tell the whole tale and of course because I'm neither an economist nor a statistician. Lastly, I don't think it can really be ignored that this is the fastest changing world our species has ever had to adapt to. I love technology, of course, but I don't think it's impact has been _only_ good. Looking at pictures of previous generations you can't help but notice the upright postures and healthy bodies that are so often missing from today's populace. Not trying to be a luddite here, and you can of course so, Edit: to clarify 'because things are cheaper', I'm speaking of disposable items and food, as was stated by another commenter "stuff you can buy in a store" In fact, I think an important aspect of this discontent is the increasing cost of housing/healthcare relative to income.
- hx87 10y ago
  > From my perspective a single centralized government(e.g.: the EU) can only really benefit the multinational corporation From my perspective it's the other way around since it's much easier to regulatorily capture smaller governments than larger ones. A large French company can easily capture the French government, especially when the competition is German or Spanish, by leveraging local power and appealing to nationalist sentiment, whereas that wouldn't fly in Brussels.
Jacqued 10y ago
Or maybe they _could_ afford much more if basic necessities such as housing did not swallow up any gain otherwise expected. (Not to mention children, education, healthcare depending on countries). When 35-50% of your income is taken up by rent, you don't care that much that home appliances cost less than they used to.
- woodpanel 10y ago
  Do you think the income stagnation is due to housing costs rather than globalization? You're right that with increasing utbanization the costs of housing was rising dramatically (as currently people prefer the dense urban areas of a city to its cheaper suburbia). But that would mean that 70% of western workers now live in the dense city parts, which can't be established I think.
  - bufordsharkley 10y ago
    Even those not living in city centers are affected by this. 1) It implies a lack of mobility from job-poor places to job-rich places 2) Suburbs outside of job-rich cities are similarly seeing land values rise: marginal land is expanding outward to exurbs Ideally, we'd see people be able to chase well-paying jobs by moving to denser, job-rich areas if they wished to, but that's become an impossibility. As far as solutions go, I think it basically boils down to: 1) People can live in exurbs and ex-exurbs, and work through VR 2) We can lower land costs with a land value tax. I prefer the latter to the former.
  - Joof 10y ago
    Housing isnt that much of a problem in most of America. Maybe you have to live farther from the city center, but it's quite affordable. I find HN is a bit focused on San Francisco and New York problems, which are important, but not universally.
    - collyw 10y ago
      I hear similar thinks in the UK, that housing is affordable in such and such a small town. Thats great, but there are never any "good" jobs in these places.
sp332 10y ago
Protectionism kinda works, yeah. Globalization increases the profits of the companies that can take advantage of it, but it also has major downsides for all the local people who can't compete. On average, the "economy" might go up even when lots of individual people are being put out of work or taking much lower-paying jobs. You can either tax the increased profits and distribute them to the under-employed workers so they maintain a decent income, or limit globalization so they can keep their old jobs.
- wyager 10y ago
  This is an overly simplistic (to the point of being absolutely incorrect) explanation. There are four parties involved; {consumers, producers} in {country A, country B}. https://en.m.wikipedia.org/wiki/Economic_surplus https://en.m.wikipedia.org/wiki/Economic_surplus
  - sp332 10y ago
    Well of course it only works for the specific people you're "protecting" and kinda screws over everyone else. My point was, if you're only looking at the median OF the richest countries, of course it's going to move down. Maybe a lot. Even as the mean of that country goes up and the real median (of everyone involved) should go up too. And long-term, the cheaper workers overseas should move a bit higher into the middle class, which makes them more expensive and also increases their demand for services and manufacturing. At that point the original workers could get better jobs to fulfill the new demand. But that could take a long time!
Klockan 10y ago
> So, protectionism works? They aren't talking about protectionism, Sweden "protected" Swedish jobs during this time period by aggressively cutting taxes for the middle/upper class. http://www.spectator.co.uk/2012/04/swedens-secret-recipe/ http://www.spectator.co.uk/2012/04/swedens-secret-recipe/

HillaryBriss 10y ago

> ... most western workers can afford much more from their flattened or fallen income than they could 10 years ago ... Afford much more of what? It's probably easy to find evidence that computing power in a smartphone is more affordable. But, can people now afford more quality in their children's education or their family's health care? And what about food? Maybe the price per calorie has actually decreased in real terms, but what about the quality of those calories? Is a calorie of corn equivalent to a calorie of fresh fruits and vegetables? And housing? Is a condominium equivalent to a house with a yard? etc. It seems like a mixed picture. Some things are more affordable, but some other important things appear to be more expensive.

justin66 10y ago
> Afford much more of what? Junk you can buy in a store. Education, health care and real estate are a totally different matter.
- LesZedCB 10y ago
  > Education, health care and real estate are a totally different matter Yes, and totally inaccessible to the people that the folks in this thread are saying allegedly have a better quality of life because they can afford useless commodities.
- woodpanel 10y ago
  I hate to sound aggressive or confronting, but will say this: you do have heard of a thing called "the internet"? ;-) we have lots of knowledge for free now. Degrees however are a different story. Here, the same competition Western workers face from abroad due to globalization, the same competition now students face as emerging market's rich dads prefer to send their offspring to western universities.

ZoF 10y ago

That they can afford more, I would assume, is because things are cheaper. clarified below To me it feels like quality of living per dollar has risen tremendously over the past generation, but income per household hasn't. So while quality of living overall has improved, it doesn't 'feel' like it with regards to individual wealth. That is to say, an upper-middle class person 15 years ago might feel lower-middle class today even with a better QoL overall. I would definitely agree that this kind of stagnating income in the middle class is a large part of what is pushing these nationalist/populist movements. It's definitely not a popular sentiment on HN at the moment(nationalism), but I can definitely see the allure; especially for the lower-middle class who have lived through the past ~15 years and aren't seeing the same increase in wages/authority that the previous generation did. Personally I have yet to see a real cogent argument for why globalism would help here at all with regards to the growing income inequality in developing nations. From my perspective a single centralized government(e.g.: the EU) can only really benefit the multinational corporation and almost by definition be of detriment to the individual nation-states. It's hard to really grok the reality of the situation from unemployment/income statistics because they don't really tell the whole tale and of course because I'm neither an economist nor a statistician. Lastly, I don't think it can really be ignored that this is the fastest changing world our species has ever had to adapt to. I love technology, of course, but I don't think it's impact has been _only_ good. Looking at pictures of previous generations you can't help but notice the upright postures and healthy bodies that are so often missing from today's populace. Not trying to be a luddite here, and you can of course so, Edit: to clarify 'because things are cheaper', I'm speaking of disposable items and food, as was stated by another commenter "stuff you can buy in a store" In fact, I think an important aspect of this discontent is the increasing cost of housing/healthcare relative to income.

hx87 10y ago
> From my perspective a single centralized government(e.g.: the EU) can only really benefit the multinational corporation From my perspective it's the other way around since it's much easier to regulatorily capture smaller governments than larger ones. A large French company can easily capture the French government, especially when the competition is German or Spanish, by leveraging local power and appealing to nationalist sentiment, whereas that wouldn't fly in Brussels.

Jacqued 10y ago

Or maybe they _could_ afford much more if basic necessities such as housing did not swallow up any gain otherwise expected. (Not to mention children, education, healthcare depending on countries). When 35-50% of your income is taken up by rent, you don't care that much that home appliances cost less than they used to.

woodpanel 10y ago
Do you think the income stagnation is due to housing costs rather than globalization? You're right that with increasing utbanization the costs of housing was rising dramatically (as currently people prefer the dense urban areas of a city to its cheaper suburbia). But that would mean that 70% of western workers now live in the dense city parts, which can't be established I think.
- bufordsharkley 10y ago
  Even those not living in city centers are affected by this. 1) It implies a lack of mobility from job-poor places to job-rich places 2) Suburbs outside of job-rich cities are similarly seeing land values rise: marginal land is expanding outward to exurbs Ideally, we'd see people be able to chase well-paying jobs by moving to denser, job-rich areas if they wished to, but that's become an impossibility. As far as solutions go, I think it basically boils down to: 1) People can live in exurbs and ex-exurbs, and work through VR 2) We can lower land costs with a land value tax. I prefer the latter to the former.
- Joof 10y ago
  Housing isnt that much of a problem in most of America. Maybe you have to live farther from the city center, but it's quite affordable. I find HN is a bit focused on San Francisco and New York problems, which are important, but not universally.
  - collyw 10y ago
    I hear similar thinks in the UK, that housing is affordable in such and such a small town. Thats great, but there are never any "good" jobs in these places.

sp332 10y ago

Protectionism kinda works, yeah. Globalization increases the profits of the companies that can take advantage of it, but it also has major downsides for all the local people who can't compete. On average, the "economy" might go up even when lots of individual people are being put out of work or taking much lower-paying jobs. You can either tax the increased profits and distribute them to the under-employed workers so they maintain a decent income, or limit globalization so they can keep their old jobs.

wyager 10y ago
This is an overly simplistic (to the point of being absolutely incorrect) explanation. There are four parties involved; {consumers, producers} in {country A, country B}. https://en.m.wikipedia.org/wiki/Economic_surplus https://en.m.wikipedia.org/wiki/Economic_surplus
- sp332 10y ago
  Well of course it only works for the specific people you're "protecting" and kinda screws over everyone else. My point was, if you're only looking at the median OF the richest countries, of course it's going to move down. Maybe a lot. Even as the mean of that country goes up and the real median (of everyone involved) should go up too. And long-term, the cheaper workers overseas should move a bit higher into the middle class, which makes them more expensive and also increases their demand for services and manufacturing. At that point the original workers could get better jobs to fulfill the new demand. But that could take a long time!

Klockan 10y ago

> So, protectionism works? They aren't talking about protectionism, Sweden "protected" Swedish jobs during this time period by aggressively cutting taxes for the middle/upper class. http://www.spectator.co.uk/2012/04/swedens-secret-recipe/ http://www.spectator.co.uk/2012/04/swedens-secret-recipe/