2013 December 04 Wednesday
Europe: The Death Of The Social Compact And Periphery Gutting

While the New York Times bills the decline of wages of the lower classes in Europe as the Americanization of European labor policy it totally misses the deeper cause: open borders within Europe have enabled the high wage countries (especially Germany) to brain drain the lower wage and less skilled periphery. The brain drain is going to drive down the periphery much further.

A clever European leader would be someone who can figure out how to make their country the destination for brains. For example, if I was the Prime Minister of Spain I'd be looking at policies that pull in the smartest people in Latin America. Brain drain all the smart Spanish speakers. Portugal should try to do the same with Brazil.

Ireland probably has the best position from which to try this strategy. English language makes it a far more attractive destination for those who already know the international language of business and who do not want to learn German. The Irish should shape their tax and immigration policy to pull in companies that will brain drain the world for top software engineers who want to lower taxes. When I say top software engineers really I mean that. An ideal immigration policy aimed at brain draining should require scoring high on an IQ test (125 IQ at least) as a condition of entrance.

You might think the Irish will want Ireland to remain, well, Irish. Fair enough if that's what they want. But they need to worry about how to avoid getting more brain drained themselves. They need a critical mass of brain workers in order to provide their own native born brains with job prospects. Else their native smarties will go to Britain or the United States. Essential synergies comes from large concentrations of brains.

The country in southern Europe with the best weather (and which one is that anyway?) could try to make their country the best place for high tech workers and companies that do not need to be inside the German economy and who want to avoid the cold winters. But I doubt that any national government will pursue a strategy nakedly aimed at getting high IQ workers.

So if you are a national leader of an EU country how to keep out the migrating dumb workers who are already inside the EU? High minimum wage and no welfare benefits for non-natives. Also, aggressive policing against parasites. Also, tax incentives for low wage service industries to automate. Or just tax low wage service industries out of existence.

Angela Merkel is making a great move by introducing a minimum wage of of €8.50 an hour in 2015. This will reduce the lure of Germany as a destination for poor migrating low skilled workers. I think of €8.50 an hour doesn't go far enough. of €12.50 an hour would be great. Germany would be headed on course toward becoming an even stronger brain magnet. Plus, German industry would do much more innovating to automate low skilled service work.

Update: The migration out of countries like Spain is mostly of the more skilled people.

The current migration “is mostly the skilled part of the population,” said Massimiliano Mascherini, a research manager at Eurofound, a European Union research agency. “It is alarming for the countries that young people are leaving, and it should be a big source of concern for their governments.”

Germany, Britain, and the Nordic countries are sucking in the engineers and doctors.

The birth dearth is catching up the more technologically advanced northern European states with more engineers retiring than are entering the market. While young people in Europe face high double digit unemployment rates the numbers of engineering openings keep growing.

But EURES, the European jobs and mobility portal set up for job seekers in the European Union (EU), which provides job vacancy information in 31 European countries (the EU’s 27 member states and Iceland, Liechtenstein, Norway, and Switzerland), reports that the list of new vacancies for “high-skilled” labor increased significantly in 2012 compared to the previous year, from 18.6 to 24.3 percent.

Any unemployed young European who is smart enough to study engineering but failing to do so is making a big mistake.

Update II: Let me clarify one point: The so-called Americanization of European labor policy isn't really being driven by an influence by America. What's really happening at the bottom end: the demand for less skilled labor is in sharp decline in all industrialized countries. The Europeans can either let wages fall or let employment of less skilled labor decline faster than it already is. Between automation and competition from abroad the old social compact does not stand a chance for low skilled workers except in occupations that can't be moved abroad. At the same time, demand for workers with more valuable skills (notably engineering) is on the rise.

Share |      By Randall Parker at 2013 December 04 08:42 PM 


Comments
destructure said at December 5, 2013 2:48 AM:

Nice article. I've considered the minimum wage as a deterrent to low skill immigration. You can keep out the working classes while pretending to care about them. Isn't that the liberal way?

Also, American unions were similarly formed to shut out trade workers from poorer parts of the country. That's why unions are powerful in the north and midwest but not in the south. Of course, most people don't realize that's the reason. So, once again, liberals can stick it to someone else while pretending to care.

Economics often works without people realizing the underlying reasons. But the more sophisticated demographics realize it. Which is why corporations are doing everything they can to get more H1B's and an amnesty. It's bad for everyone else but as long as it's good for them they don't care.

**

Brain drain from countries on the periphery can be just as bad as low-skilled workers. In the latter case, you're importing mooches. In the former, you're importing people whose children will be the next generation of leaders. I'd rather my leaders were homegrown. It's much better to provide incentives for the smartest to have more children. I'm thinking a 20% annual tax break per child would be much more appealing to a family making $300K than one making $30k.

radical centrist blogger said at December 5, 2013 3:03 AM:

wrong!

The reason that europeans are losing out on wages is not because they are losing out on high iq software people.
They are losing wages because the rich people have gained more control of the governments of european nations and are using that increased control to 1) make the labor policies of those nations to give more power to employers and less power to workers and 2) to import more cheap foreign labor.

How did business gain more control of those governments?
1) by democracy by creating the EU. The European Union was created by the rich to take control away from the populace and give it to the rich. How? By enlarging political districts. Larger districts (the EU districts) have more factions among the populace. More factions == less unity== fewer common interests among the populace. Fewer common interests among voters of a district means they have less control over their elected representatives, which means the rich and the corporations have more control.

2) the rich have used the media and educational system to instill white race guilt in young white minds. That allows the rich and the corporations to manufacture consent for more nonwhite mass immigration, which also, over decades, creates more factions in the populace. More factions, less unity means more control for the rich.

The end result, decades later, is lower wages, lower worker benefits etc.

SOBL1 said at December 5, 2013 3:58 PM:

Got to agree with the 'radical centrist' and disagree with you Randall. The lower wage earners got crushed by Turks in Germany, African, West Indian, and Muslim immigrants in England and other North African immigration hurt the lower end of the labor supply as well as pushed up the invisible tax of avoiding those populations. EU to EU immigration hurt as well, like the Polish Plumber. Radical centrist laid out the blueprint for the 'left' in all Western nations, which is why Goldman Sachs led the way in '92 and other companies followed suit with funding the modern left.

I do like your strategy of IQ hurdles for immigration. Good to do for the future, better is to boot out anyone who came in after '86 and their kids.

Randall Parker said at December 5, 2013 9:18 PM:

radical, SOBL1,

I think you are missing my main point. So I'll hit it harder. See the links in my update. I just did some web searches and came up with a couple of applicable articles about Europe. Big shortages for skilled workers. Fewer engineering grads from universities. Rising demand for engineers. Extremely high unemployment rates for the less skilled. Granted immigration from outside of Europe plays a role. But really, the market is demanding more skilled workers.

It is hard work to study engineering or software development. The vast majority of people don't want to do it. But even without immigration the position of the less skilled would be declining.

Your emphasis on (admittedly nefarious) plottings of the elites misses my point: Deep trends in technology and trade are cutting demand for the less talented and increasing the concentration of the brains in fewer places. This is really gutting some countries out of brains. The lowered borders of the Schengen Accord have the effect of draining European countries which have lower average skills of their small numbers of brighties.

Europeans losing out on wages: Saying the capitalists are trying to crush their wages to get them more cheaply really misses the point. Industry doesn't have a use for the unemployed in many Euro countries. Spain's unemployment rate is 26.6%. Spain's unemployment rate for people in their 20s is more than double that. More than half do not work. Greece has a 27.6% unemployment rate. These are astoundingly high numbers, like America in the 1930s. Why can't companies find ways to employ these people profitably? What is going on?

I advise you to resist the temptation to blame every bad development on the elites and immigration of dummies. Other things matter too, notably:

  • The industrialization of Asia.
  • Depletion of natural resources.
  • The birth dearth among smarties.
  • Lowered barriers for migration of smarties.
  • The increased value of getting lots of smarties close together for work.
  • The automation of work that used to be done by lower IQ people.
  • The decline in the demand for middle management due to automated means to manage and monitor. We need fewer information collectors.

These are all many punches you've got to roll with and shift to avoid their impacts on you.

I'd like to see the IQ of the unemployed compared to the IQ of the employed. How many smart people in Europe can't get a job?

Ace said at December 5, 2013 9:39 PM:

Randall,

If what you say were true, we'd see all these companies investing in workers, training their workers, investing in hiring intelligent workers etc. We don't see this. We see decline in investment by businesses, we see businesses sitting on cash, we see businesses outsourcing to lower skilled people, etc.

destructure said at December 5, 2013 9:59 PM:

Some of you may disagree but I think you all make valid points. It's possible for all of you to be right. Several causes can combine to produce a result.

Randall Parker said at December 5, 2013 10:08 PM:

Ace,

Don't hold innumerate opinions. Have you looked at the numbers for what is going on? In manufacturing only hiring for advanced degrees is going up (see figure 4) and it really is going up. Employment of high school drop-outs in manufacturing is plunging. Since December 2007 look at the trends in employment by educational attainment. I've linked to that post by Catherine Rampell a few dozen times at least. I feel my readers are not clicking thru. Companies have hired lots of college grads. The prospects are brightest for engineers.

What we see is the smarter people getting more demand for their labor, especially if they have wealth-creation skills. Really is a great great time to be a Ph.D. in machine learning.

WJ said at December 5, 2013 10:12 PM:

"Brain drain from countries on the periphery can be just as bad as low-skilled workers. In the latter case, you're importing mooches. In the former, you're importing people whose children will be the next generation of leaders. I'd rather my leaders were homegrown. It's much better to provide incentives for the smartest to have more children."

This.

Take the small countries, like Norway, Switzerland, Finland, etc. What fraction of the "brains" from such countries actually emigrate? Less than 20%? Less than 10%? Less than 5%? Dirt poor Third World countries are more apt to lose their talent than are the rich European and East Asian countries.

The key is getting brains to breed. A culture that encourages the well-educated to breed would not be hard to create. It's hard to be swayed about the need to attract talent when the easiest way to get talent in your country - by breeding it - is being entirely ignored.

Randall Parker said at December 5, 2013 10:31 PM:

WJ,

Certainly the birth dearth among the high IQ is a major reason for the decline of the West. But it is hard to get that into mainstream public debate when the tabula rasa religious faithful control can be discussed in the MSM.

destructure,

The middle class can't be saved by putting a different elite in place (and not only because the elite is too powerful to dislodge). Immigration is partly to blame for the decline of the middle class. Immigration is certainly partly to blame for the decline of the lower classes. But so is the decline of marriage in Fishtown (see Charles Murray's Coming Apart) and so is automation and so is the industrialization of Asia and so are computers for that matter.

People who think nefarious plotters are the sole authors of their trouble aren't helping themselves any. Even if it is true it is not like the flaws in democracy are fixable.

A major theme of mine is that Americans who think American exceptionalism can be restored are fooling themselves and doing themselves a disservice. The forces arrayed against a restoration of the golden years of the middle class are growing in strength and impact. You need to focus on personal response rather than political response. Though I certainly do encourage support for rebels against the major party leaders. We shouldn't act like we respect what passes for the mainstream consensus.

Ace said at December 5, 2013 10:59 PM:

Randall,

I'm not holding innumerate opinions. You are. Manufacturing employment has declined, and this decline has not been driven by management's desire for greater intelligence or skill. Companies are sitting on cash and not investing. If companies really wanted high intelligence or skill, they'd be investing in workers, training their workers, investing in hiring intelligent workers etc. We don't see this at all. We see the exact opposite. Companies are rent-seeking and seeking to lower labor costs via insourcing and outsourcing.

Management is not even run by engineers. Management is dominated by MBAs and lawyers who don't even know what quality high intelligence or skilled engineering looks like.

You can't look at this objectively because you're so personally morally and emotionally invested in this work hard/acquire skills narrative.

Ace said at December 5, 2013 11:03 PM:

"Since December 2007 look at the trends in employment by educational attainment. I've linked to that post by Catherine Rampell a few dozen times at least. I feel my readers are not clicking thru. Companies have hired lots of college grads."

"Employment" is meaningless without context. The context here is high student debt, high real estate prices, especially in the major urban areas that college grads increasingly have to go to for this "employment."

radical centrist blogger said at December 6, 2013 12:55 AM:

software is a minor aspect of the modern economy. There are so many other aspects that IQ and all that is not that important.

What is important is who controls the government.

When the corporations and their rich investors gain more control they use that control to do all sorts of bad things, like import cheap labor and make it easier to outsource overseas and to put workers in a less powerful position.


The way that the people lose control is through factionalization.


When the people are united and share more common interests, it is easier for them to hold their politicians accountable.

Let us perform a little thought experiment to explain this idea.

Imagine a nation of clones of the same person. 1 million clones of Joe, the voter. Now every voter has exactly the same thoughts and needs.
The one million voters elect a politician to represent them.
How well will that politician represent the voters? Will the voters have control and how much? Will the corporations have control and how much?

These million voters now have a certain, quantifiable degree of control. Call that control C.

C is directly proportional to how many Shared Common Interests the voters have. Call that SCI. As SCI increases, the million voters are better able to control that politician.

That politician had better toe the line with these million clones. If the politician sells out to the corporations, he will be tossed out on his keister. Why? Because of the high degree of SCI, which means a united electorate.

Now we change the composition of the electorate. Instead of all being clones of one person, let us make the voters all whites. White people, all different, but the same race.

Now the SCI is lower. They still share a lot of common interests, but not as many as when they were all clones. So SCI is lower, and so the degree of Control, C, is lower. So now the corporations have more power and the people less power.

So what do the corporations do with that power? They use it to maximize profits. Gosh, who could have predicted that?!

How do they maximize profits? Well, there are all sorts of way to lower labor costs. Let me see...say, maybe they might increase immigration by making the politician make the immigration enforcement mechanisms ineffective. Gosh, what a wild, unbelievable scenario. That would never happen in the real world...

Now let us change the population again. Make the population several different races instead of being all white. Now the SCI, Shared Common Interest, is lower. Unity is lower. The people have even less control over that elected politician.

Now the corporations can do all sort of bad things via the government.


Do you see where I am going with this?

It's called increasing factionalization to divide the populace. This is how they have been controlling us for centuries. The USA was deliberately set up along these lines to increase factionalization over 200 years ago, and the same tactics were used in europe.

It is part of the divide et impera strategy. The elites divide the populace by creating factions within voting districts. Read the divide et impera letter from madison to jefferson. That was why the founding aristocrats discarded the articles of confederation and installed the constitution. Factionalization of the populace leads to an inability by the populace to unite and discover their shared common interests, thus crippling democracy and enabling the elites to gain control. That last sentence of mine is a summation of madison's writings on how and why he designed the constitution we now have. If only people were capable of reading and understanding what he wrote.

This is why the elites in europe created the EU. To increase voter district size, thereby increasing factionalization, thereby decreasing shared common interests and unity, thus allowing the elites to control the politicians because the politicians are less accountable to a factionalized electorate.

So, then the elites discovered that racial integration and affirmative action combined with mass immigration of third worlders leads to even more factionalization due to race and culture and nationality differences.

This sort of thing dwarfs issues of IQ and software development and such.

Anyway, no one seems to understand or care. They just keep mouthing whatever talking points the corporate media hands down to them....

radical centrist blogger said at December 6, 2013 1:49 AM:

randall parker wrote:
These are all many punches you've got to roll with and shift to avoid their impacts on you."
------------

TINA == There Is No Alternative.

Ah, the neoliberal mantra for decades now. You have been a good student....

randall parker wrote:
"Even if it is true it is not like the flaws in democracy are fixable."
------

Well, they certainly are not fixable if the populace does not understand the most fundamental aspects of politics: 1) diversity is strength...for the upper class, but weakness for the working class; and 2) propaganda is the tool of the upper class.

randall parker wrote:
"People who think nefarious plotters are the sole authors of their trouble aren't helping themselves any. "
-------

Here is what I think: people act in their own best interests. Corporations are people, too. So surprise surprise surprise, as gomer pyle would say, that corporations and the upper class are using their clout to control the govt. It's not a conspiracy, but an ecosystem.

And I am not saying that factionalization of the electorate leading to control of the gov't by the upper class is the ONLY source of the problem. But in order to do anything at all we have to understand the true principles of politics.
You know, like in order to build a car, you have to understand newtonian physics, chemistry, hydraulics, etc etc.

Likewise in order to improve your nation, you have to understand the fundamental principles of politics: unity of the electorate and the power of propaganda being prime factors. Not IQ. IQ may well be important, but there are likely many other characteristics of homo sapiens that are crucial as well. Aggressiveness for example. Testosterone levels. Many other things.


map said at December 6, 2013 10:21 AM:

radical cnetrist is actually correct. The availability of high IQ people to slot into high-paying jobs still exists within the context of corporations who control the marginal value of, say, engineering, by controlling the supply and demand for engineers. Simply put, companies do not want to pay a lot for engineering talent because the marginal productivity of the engineer is not high enough to justify those salaries. If a company can go a long tome with a slot unfilled at the prevailing wage rate, then isn't the value of that engineering slot pretty low?

Engineers are not evaluated by how smart they are at jumping though hoops in a hard discipline. They are evaluated by their ability to produce products that people will buy at a profit to the company. Demonstrating the intelligence to handle a difficult curriculum is about as useful to a company as demonstrating an ability to solve a Rubik's cube very quickly. A lot of companies are probably discovering that their engineering "talent" is just a bunch of guys pursuing their own personal Rubik's cubes and not a production facility creating things an organization can sell. Their only choice with such a useless, commodified product is to get it for as little as possible.

With the marginal productivity of engineering going down and with more engineers and scientists then there are jobs to fill, how is getting an engineering degree solution?

Michael L said at December 6, 2013 10:46 AM:

good engineers don't magically grow out of the high IQ cohort. They are trained on the job by working in companies willing to put up with training "entry level" professionals. So if companies are not willing to train recent grads or if, significantly, there are few companies involved in a particular area of engineering, then you wouldn't get any new skilled engineers from that area.

I think that Randall's viewpoint is heavily affected by the peculiarities of software industry where in fact there are lots of programmers all over the place, and some of them even happen to be autodidacts and were able to get jobs (at least back in the day). By contrast, suppose you are a German company who needs more mechanical engineers. Well, if over in Spain they don't have any mechanical engineering companies (either because they were never there or else they got wiped out by German competition long ago) then the number of skilled mechanical engineers you can poach from Spain will be zero. Then it's back to the traditional German principle of training your replacements from your own smart young people.

As for poaching extra doctors, sure, you can always do that. But just how many doctors do you need per capita anyway? IMHO they are like lawyers, once you get above a certain population threshold the marginal benefits become zero or negative. People like making work for themselves, and you don't want guys who order MRI scans, to say nothing of those who prescribe Prozac, to go about doing make-work to make ends meet.

Ace said at December 6, 2013 11:42 AM:

If what Randall said were true and these companies really wanted geniuses and the highly skilled, then they would be doing things like offering IQ tests to tons of people online to identify geniuses and then train them themselves. This would be a trivial cost for them, especially with the internet and the fact that the highly intelligent and geniuses are easier and faster to train. But this is the exact opposite of what these companies are doing. They sit on cash, and any significant investment in recruiting is largely political or legal investment to enable greater insourcing and outsourcing, where the entire objective is to try to have access to groups of people that meet the basic, minimal qualifications like degrees, not genius or highly skilled qualifications, and pocket the difference from lower labor costs.

If you really wanted geniuses and the highly skilled, why would get someone from India just because he has a particular degree, rather than IQ testing people and training them for a few weeks or months?

SOBL1 said at December 6, 2013 5:58 PM:

Randall, The NY Times also had an article about manufacturing firms and grey collar industries not wanting to train people. They want ready made workers to plug in, which throws out the old book of hire new guys to do grunt work and if they show reliability and some aptitude, train them for more. Don't leave out automation or the 1980s reclamation by capital to pull more earnings their way. Wall Street aided capital in the attack on management of those firms.

Do you know any manufacturing firms in America and how their operations research and/or pay is set up? I was working with a potential customer in a growing manufacturing area down south. They had a management/supervisory group where everyone made more than 50K and had management, supply chain logistics and other OR and knowledge based skills. They were maybe 25% of the group. The other 75% were the manufacturing guys making under 25K annually. Nothing is help the 75% stuck in the

Regardless of your ideas (admit it, it's proto-Elysium), it is not happening in the current political-economic system. The need for voting blocs dependent on the state is too much. They threw away golden California for cheap nannies, landscapers, agricultural workers, roofers and small contractor crews. You will need a new system, perferably a patchwork of smaller states with a variety of political set ups to experiment.

Randall Parker said at December 6, 2013 7:59 PM:

Ace,

Manufacturing employment has declined, and this decline has not been driven by management's desire for greater intelligence or skill.

Management's motivation to use less labor: it saves money. What enabled them to save money? automation and moving factories to other countries. The automation has been done by who exactly? Really smart engineers. The charts I pointed you to show the manufacturers are hiring more Ph.D.s. Did you look at them? Why are they hiring these Ph.D.s? The biggest reason is to automate. Why use lots of laborers when a machine learning model or image processing algorithms enable robots to do what only humans could do in the past? The Ph.D.s cost less than a far larger number of laborers. Look at the charts that shows flat production since 2000 but sharply declining employment, except for rising Ph.D. employment.

Companies are sitting on cash and not investing. If companies really wanted high intelligence or skill, they'd be investing in workers, training their workers, investing in hiring intelligent workers etc.

Hiring intelligent workers: They are certainly doing that. Ph.D. engineers are smarter than the average engineer (I say from extensive personal experience and from the research on educational attainment supports my assertion). Hiring is up sharply for Ph.D. engineers. Ditto for statisticians who have many of the mental skills needed for ML model building.

We don't see this at all. We see the exact opposite.

We see hiring of more skilled people. Look at starting salaries by degree. That's a signal. The value of technical degrees over other degrees has risen considerably. Do you deny this?

Management is not even run by engineers. Management is dominated by MBAs and lawyers who don't even know what quality high intelligence or skilled engineering looks like.

I've worked in companies which had lots of engineers in the layers above me. It depends on company and industry. Silicon Valley notably has technical people running some big firms.

You can't look at this objectively because you're so personally morally and emotionally invested in this work hard/acquire skills narrative.

Work hard: Anyone who has an IQ of say, 100 is screwed even if they work hard. You aren't hearing what I'm saying. Morally and emotionally invested? You really do not know me. I'm responding to an extensive amount of first hand experience and know lots of the kinds of people I'm talking about who are in much greater demand. I'm not an ML guy. I'm not a physicist. I'm seeing these people become much more valuable. I'm looking at pay rates and charts of hiring patterns.

We see a rise in Ph.D.s in manufacturing. Really, I pointed you to a chart that shows it. We are also seeing a rise in Ph.D.s doing software development. The Ph.D.s in data mining, ML, math, physics, and other quantitative skills are solving problems that are cutting the need for high school grads.

Companies investing: They invest when they see ROI.

Randall Parker said at December 6, 2013 8:23 PM:

radical,

Likewise in order to improve your nation, you have to understand the fundamental principles of politics: unity of the electorate and the power of propaganda being prime factors.

In order to improve your nation thru the ballot box you have to get people to understand clearly what is true. After decades of trying it has sunk in to me that it is not going to happen. The people are too lazy, dumb, ignorant, and distracted. They are so busy trying to boost their own status versus others (e.g. liberal whites obsessed with feeling superior to conservative whites) that they aren't going to look the best interests of the nation any time soon. They are also too busy watching TV, cruising the internet for porn, playing video games, or doing messaging sessions. You can dream about how radically better the world could be if people had more accurate assessments of what is happening. But the dream isn't going to come true.

I see so many things I would fix at so many levels if I was king. But no one is going to make me king and I'm not going to convince the electorate. So wrong trends as varied and assorted as the draining of the Ogallala aquifer, letting too much topsoil run off, lack of prep for Peak Oil, the stifling parasitism of patent trolls, EEOC persecution of totally fair businesses, hiring of incompetents into essential government functions under racial quotas, to the importation of a bigger lower class will continue.

I mean I could go on. Reality is off the table for many problems both because of political correctness and because of the stupidity, ignorance, and selfishness of most people.

Randall Parker said at December 6, 2013 8:36 PM:

Ace, You write as if you are unfamiliar with Griggs v. Duke Power Co.

If what Randall said were true and these companies really wanted geniuses and the highly skilled, then they would be doing things like offering IQ tests to tons of people online to identify geniuses and then train them themselves.

...

If you really wanted geniuses and the highly skilled, why would get someone from India just because he has a particular degree, rather than IQ testing people and training them for a few weeks or months?

Corps would increase their efficiency of identifying the best people if they were allowed. Have you read Steve Sailer's recent Why job testing went out of fashion? Or his "They're Watching You at Work"? How about his Holder after another liberal city fire department? How about his Every single AP Test fails EEOC's Four-Fifths Regulation? Essential reading if you want to understand what has been going wrong in America for decades.

If you want to understand corps you need to understand the legal environment they operate in. Given a more rational legal environment gradually the companies that did the most efficient testing for hiring would wipe out the companies that didn't. You know the reason why the EEOC and Supreme Court block this and that reason is going to grow in power as the electorate shifts toward dominance by the NAM voters.

Randall Parker said at December 6, 2013 8:47 PM:

Guys,

Engineers make good money:

Here are the median salaries for engineers per degree:

B.S. in engineering - $85,900

M.S. in engineering - $95,576

D.Sc. in engineering - $116,000

But hot shots in the right regions make much more. I know lots of hot shots. If you have the right skills and are willing to move you can make more money. Granted, some of the high salaries are in areas with high costs of living.

Randall Parker said at December 6, 2013 8:57 PM:

SOBL,

Proto-Elysium: It is how I see the world going. We are going to see migrations of the the most talented to smaller numbers of areas. What Charles Murray calls superzips (see the maps). America is changing:

In 1970, 65 percent of families lived in middle-income neighborhoods; four decades later, 42 percent did.

Meanwhile, the share of families living in affluent neighborhoods doubled, from 7 percent to 15 percent, as did families living in poor neighborhoods, from 8 percent to 18 percent.

When I tell you that you've got to go up or you will go down, well, this is the sort of data that makes me say this.

You can download Murray's Excel file on superzips, high income zip codes if you have a desire to number crunch.

I think Europe is at an earlier stage of forming superzips. The the most skilled and the wealthy are going to concentrate into fewer places in Europe just as they have in America. The middle will shrink.

If you have the intellectual ability and are not tied down by family commitments get more skilled and live where your labor will be most highly value. If you have less freedom to restructure your life at least use what range of choices you've got to your best advantage.

Ace said at December 6, 2013 10:49 PM:

Randall,

I never said that management doesn't want to use less labor and save money. I said that companies aren't behaving as if they really wanted geniuses and the highly skilled. Companies are run by MBAs and lawyers seeking to maximize short term stock prices, not ROI.

Ace said at December 6, 2013 10:51 PM:

Randall,

I'm familiar with Griggs v. Duke Power Co. We were initially talking about European companies, no?

But even in the American context, this supports my point. The legal environment does not facilitate companies to seek geniuses and the highly skilled. And companies don't even care, since they're not interested in seeking geniuses and the highly skilled. They're interested in acquiring the lowest labor cost that meets a minimum skill requirement. If they were really interested in seeking geniuses and the highly skilled, they'd be lobbying the government to allow things like testing and getting rid of their diversity departments and their female, Indian, and other minority employees. But they're not doing that. All their lobbying is directed towards facilitating more insourcing and outsourcing.

Ace said at December 6, 2013 10:52 PM:

Randall,

Engineers do not make good money nor do they have stability or longevity. Engineering is a dead end position and you have to transition into a bureaucratic management or administrative role by the time you're 35 to 40 if you want to continue to have any sort of career.

radical centrist blogger said at December 7, 2013 4:59 AM:

Randall Parker said at December 6, 2013 8:23 PM:

radical,

Likewise in order to improve your nation, you have to understand the fundamental principles of politics: unity of the electorate and the power of propaganda being prime factors.

In order to improve your nation thru the ballot box you have to get people to understand clearly what is true. After decades of trying it has sunk in to me that it is not going to happen. The people are too lazy, dumb, ignorant, and distracted. They are so busy trying to boost their own status versus others (e.g. liberal whites obsessed with feeling superior to conservative whites) that they aren't going to look the best interests of the nation any time soon. They are also too busy watching TV, cruising the internet for porn, playing video games, or doing messaging sessions. You can dream about how radically better the world could be if people had more accurate assessments of what is happening. But the dream isn't going to come true

end quote=================


First off, I didn't say radically better. Stop creating a strawman. Stop trying to depict me as an unworldly young utopian. I am an old man with multiple degrees who has worked in power tower offices, up on telephone poles, in courtrooms, in nuclear power plants, and as a teacher. I have a wealth of worldly experience.

Second, I am going to say what I see as the truth regardless of what the effects are or whether others will believe me.


Let us examine the evidence and see if we can induce some principles or at least uncover some interesting questions.

In other nations they have a much better sense of what government and politics is really about. I was waiting on a docket call in court in galveston texas a few years ago, and I was discussing various issues with the court interpreter, a lady from argentina. Politics came up. And then she casually mentioned that the USA is too big for the people to govern. This was also my conclusion, but that conclusion cost me years of research to obtain. And this lady was no political scientist. She was just a ordinary person, but she was from another nation. But she understood this simple fact! And let tell you that it did not take her years of research.

Likewise, in a similar vein, after the breakup of the soviet union, the eastern european nations were discussing what form of govt to take. The American contingent went over there and tried to convince these nations to adopt the american federalist model of govt--a president, upper house with showstopper powers, a judiciary, strong checks and balances and separation of powers. None of these nations would have any of it. Every single one of them adopted the parliamentarian style of govt that is used by every single other white nation.

Yet this fact was not discussed at all in american media. And since the american media did not discuss it, you do not know anything about it. Everything you know and discuss is from the mouths of our thought leaders.

Me, I turn away from whatever our thought leaders focus upon. I focus in on like a laser whatever they ignore or demonize.

Now, why was the argentinian translator able to see the simple truth that as nation size increases, the people are less able to control the nation?

And why did the populace of eastern europe nations soundly reject the american structure of governance?

The answer may lie in the effects of edu-propaganda on young minds.

Here in america we are taught in youth that the separation of powers, the checks and balances and above all the constitution, that most holy of holies, are the best things in life.

But if you actually read the seminal documents of the USA, most notably the federalist papers written by madison, madison's notes on the constitutional convention, and his divide et impera letter to jefferson, it becomes clear, if one reads with an open mind, that the federal governmental structure as imposed by the constitution, is anti-democracy device. Further, the idea is subtly pushed on us in school, that there are ravening masses out there that most be controlled by the government, who must be kept from the levers of power. We are also inculcated as youth into the idea that we are the elite and that somewhere out there are these riotous mobs of the majority and that it is right and proper to control this oh so dangerous majority.

That idea is the subtext of the civic religion that is pounded into our heads before our worldview is fully set at about age 21.

The fruit don't fall too far from the tree. What we are taught as youth becomes our worldview.

People in other nations are not subjected to this particular rand of edu-propaganda. Thus they can clearly see the truth.


You are discounting the power of propaganda and the effects of anti-white demonization on the white majority.


The truth about politics is hidden from americans because their young minds are crammed full of propaganda that does not allow them to rationally examine real politics.

Randall Parker said at December 7, 2013 9:49 AM:

Ace,

I said that companies aren't behaving as if they really wanted geniuses and the highly skilled.

You keep saying that. But how about facts? I've already linked to an article that has a chart showing that manufacturing employment of advanced degree holders is up 44% from 1992 thru 2009. Meanwhile manufacturing employment of high school drop-outs is down 47.3% over the same period. Between 1973 and 2008 science, engineering, and health doctorate employment in industry rose an average of 4.6% per year. That's a faster rate than in academia or government.

Companies can't use IQ tests. So what do they do as substitutes?

  • Recruit heavily from elite schools which use SATs as proxies for IQ.
  • Hire more Ph.D.s (for skills and IQ).
  • Use more interns in order to do more in depth evaluations.
  • Technically difficult interviews.
  • Use recommendations from their best employees.

Why do you think companies would think they'd have a chance of rolling back the blank slate religion?

If they were really interested in seeking geniuses and the highly skilled, they'd be lobbying the government to allow things like testing and getting rid of their diversity departments and their female, Indian, and other minority employees. But they're not doing that.

If they tried all that they'd get labeled as racist and sexist by the Left in a huge intense chorus in Slate, Salon, New York Times, HuffPo, ABC, NBC, MSNBC, CBS, and the like. EEOC would come down on them hard. Sonia Sotomayor would join her fellow liberal justices in slapping them most painfully.

Europe versus America: I can get better data on America. So I've provided more data on America. But speaking as someone who used to work for a German manufacturing company: they have lots of Ph.D.s. The same trends are going on with European companies as are happening in American companies. They want to use techniques of machine learning and data mining because the ROI is high. So they are hiring the same kinds of people as American companies are hiring.

Engineers and salaries: I can say that for software development all my friends who are full time make over $100k and some of them make over $200k and higher. These people live in coastal areas where salaries are high. Salaries for brains are higher where the concentrations of brains are higher.

radical centrist blogger said at December 7, 2013 12:13 PM:

but what percent of any nation's economy consists of engineering and or software?

And there is only so much of this work to go around.

Read the writing of eammon fingleton: software jobs are inferior to high end manufacturing jobs.

ALso, having to spend years studying is not a plus, but a minus.

radical centrist blogger said at December 7, 2013 12:46 PM:

randall is suffering from a 'turtles all the way down' logical fallacy.

Suppose these nations you refer to did adopt a campaign to have their youth embark on studying for engineering degrees from a young age. Suppose 100 percent of youth did this. All gonna be engineers. Great.

But then the elite will simply import cheaper foreign labor from whatever 3rd nation can supply cheaper labor.

The fact is that Capital will always be able to thwart any move of Labor unless Labor has control of the nation.

In fact all those years studying are wasted unless Labor has a decent degree of control over the Nation.

There has to be something those turtles stand upon at bottom. It cannot be turtles all the way down.

Democracy grants control of the nation to Labor. If there is no democracy for those turtles to stand upon, the living standard will be constantly degraded, and workers will have to work harder and harder for less and less. It's called a Race to the Bottom. Look around you--it is happening all around you. The more nonwhite faces you see every day, the worse the race to the bottom is getting.

Now, however, there is the fact that as technology increases over time, as science improves, this will have the effect of increasing standards of living, at least to some degree. Technology's race to the top to some degree counteracts the effects of the race to the bottom. In fact those counteracting effects are the reason american elites are not hanging from street lamps right now. Video games, high tech and engineering boosting of agricultural output, improved, cheaper consumer products, etc etc. All these things to some degree have negated the effect of the loss of democracy and the consequent race to the bottom.

radical centrist blogger said at December 7, 2013 12:54 PM:

the median worker income in america is about 27K annually, and yet somehow CorpGovMedia is always pushing these inflated stats for jobs that require a college degree. I don't believe those stats. For one, they only relate to grads who got jobs in those fields. Lots of grads get tech degrees and yet cannot land tech jobs. Or they land them and then can only hang onto the tech jobs for a few years. And then of course CorpGovMedia is no longer interesting in counting their income.
Fact is that americans are controlled by a skein of manipulated, massaged statistics. The stats you cite are part of that skein. Do not believe them.

Randall Parker said at December 7, 2013 7:30 PM:

radical centrist blogger,

I have never said that most people can become engineers. I know that anyone below 120 IQ can't do serious engineering. But someone around 115 IQ and perhaps even 5 points lower could be a computer admin. My message is repeatedly that you'd better learn skills valued by the market up to the level of your ability because the market has less and less use for lower skilled people./

Some things I think are happening in the labor market:

  • It is easier on average to develop computers and robots to take over the work of low to medium IQ people than of high IQ people.
  • Computers enhance the power of very smart minds so that the ratio of productivity of smart to dumb people has risen. Computers boost the productivity of smarties while cutting the demand for the less bright.
  • Smart people are more able to create new jobs for themselves than dumb people.
  • Labor will not act politically as a single entity because different kinds of laborers have diverging interests. A united front of labor against capital is not in the cards.
  • The value of putting smart people near other smart people has gone up. I suspect the use of smart people to supervise less bright people has gone down and smart people generate more value interacting with each other.
  • Capital is becoming less tied to physical locations. Lots of factories can be managed remotely.

Are the upper classes scheming to get more cheap imported labor? Sure. Am I opposed to the glut of low skilled labor? Sure. Been writing against it for years. But Humpty Dumpty can't be put back together again by ending immigration. Other forces are at work, forces you really ought to pay attention to when thinking about your own career.

MellowBob said at December 9, 2013 6:15 PM:

Ace,

Manufacturing jobs decrease but manufacturing output has increased. Training and education high IQ kids in a STEM field that the employer would want is too expensive. The gamble of a half million plus (primary and secondary schooling, room & board, oversight, testing) is a waste if the kid burns out, is too screwed up by upbringing, or loose interest in the field. Those that get the Phd on their own screens out most of the undesirables with little risk of time and money for the employer.

A high tech company wasted no money and no time on my brother-in-law. He was raised in the rough spots of Chicago surrounded by drugs and joined the Army just to get kicked out for smoking pot. He was tested in high school to see if his indifference to learning was a disability and was offered a full scholarship to MIT, but got a GED instead. While in the Army, he scored a a near perfect SAT (I forget the number) and there was something about going to MIT again. Now he is former Chinese food delivery boy. A high tech company wasted no money on my cousin from the good side of Chicago. Near perfect GPA in high school, an above 1500 on the SAT and a Phd in genetics from John Hopkins. He's back in Chicago doing research for a pharma company.

0 cost to any company, but a company reaped the reward of a experienced, high achieving researcher (And without a clue about economics). He was a professor for a decade, before not getting tenure, so he's used to lower pay. Clear win for the companies for zero cost.

This also ties into Randall's brain drain. One of my EE professors at UNH is a nuclear engineer from MIT and a M.S. in CS who got out of Iran pre revolution also at no cost to any American company. Wonder if they would have the bomb by now if he and others stayed. BTW, after serving 4 years in the Navy with a college money signing bonus and the Chapter 33 G.I. Bill means that Uncle Sam will pay about 140K for my EE degree by 2014. I've got former military class mates that already work in the EE field as lab techs for 50-60K while part time at school. A good variation of the votech career that Randall and others suggest.

Randall Parker said at December 9, 2013 11:33 PM:

MellowBob,

Good to hear you and some of your Navy friends are doing wise stuff with your training for good paying jobs. It is a source of continual amazement to me just how many people go to college to learn worthless (though easy) crap.

The unmotivated and incurios: I have encountered so many slackers in my career at different jobs. I've been put in the position of having to try to get the slackers to do useful work. These experiences helped me develop a very unromantic view of humanity. I also know slackers from knowing an extended family and who all they married. What are they thinking?

I look at the economy and just how much more skills are worth and just plain marvel at people who refuse to get the message. Getting the message would require action. Can't have that.

map said at December 12, 2013 10:21 AM:

Randall,

The unemployment rate for electrical engineers is roughly 7.0%. See http://www.computerworld.com/s/article/9238266/Unemployment_rate_for_electrical_engineers_soars. That is a very high number for a difficult, value-creating profession like EE.

In general, the salary surveys you quote indicating very high engineering salaries are largely bogus due to poor sampling. The people reporting those salaries are the ones who are employed, not the ones who are unemployed.

In addition:

1) Those stats fail to tease out number of years of experience. Does a BS in engineering starting at $85,000 indicate that this is a newly-minted engineering grad or is it someone who has a BS but also 10 years of experience?

2) Those stats fail to account for whether the holder of the degree is an actual, practicing engineer. I knew a ChemE grad who went straight into consulting at a big name firm after getting her degree. None of her work involved chemical engineering. The salary she reports will have no bearing on what practicing chemical engineers make. Firms that use engineering as a signaling tool for intelligence have other options, like using school status as a signaling tool. This means engineers are competing with Harvard English majors for jobs.

3) Basic statistics tells us that there is more than one way to interpret a result. If engineering Ph,D's are being hired in droves, then this could reflect the value of the Ph.D. Or, it could mean that there is such a glut of engineering grads that a Ph.D can be had for the cost of an MS or a BS, so, why not?

The point is that the data cannot be taken at face value because all of the parties involved have a vested interest in lying. Universities want to lie about the job prospects of their students because they want continued enrollment. Companies lie about the job prospects because they want an over-supply of labor. Government lies because they want to appear to be more capable managers than they really are. Meanwhile, the value of these degrees are front-loaded in the tuition and the "high salaries" exist in high cost areas that make it impossible to afford a family.

Finally, I don't get your anecdote about you knowing software guys who make 100k-200k a year. I know lawyers who make 300k a year and one lawyer who make 4 million a year. By that reasoning, I should recommend law school.


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