2014 January 01 Wednesday
Will Boeing Union Vote For Faster Gentrification?

Will the International Association of Machinists union local in Seattle vote down a last offer from Boeing to keep the next 777 design in the Seattle area? They want to remain in the 11% of American workers who still get defined benefit pensions. They also want to remain employed. Good luck with that.

What is at stake nationally? At the national level a slightly slower or faster speed of decline of industrial unions in America. If the union votes down the latest Boeing offer then Boeing will move 777X production to a non-union state. That is less consequential than the local impacts.

What is at stake locally? This is the amusing part: The speed of gentrification of Seattle and the Puget Sound region. Take away work for blue collar workers and their numbers will decline around Seattle. This will open up neighborhoods to be gentrified by knowledge workers. If the attempt by socialist Seattle city council member Kshama Sawant to raise city minimum wage to $15 per hour also succeeds that will even more firmly plant Seattle on the road toward greater gentrification.

The state-level impact: downgrade of Washington State's credit rating. But in the long run I expect decline of Boeing production in Washington State will boost the state's credit rating as blue collar workers move out of the state and get replaced by engineers and software developers.

Some parts of the United States are going to become top 15% zones while others become bottom 85% zones. Seattle seems a likely candidate become one of the top 15% zones, amazingly in spite of all the rain.

Many factors are coming together to enable much greater separation of society into regions of different levels of cognitive function: factory automation, high minimum wages, online buying, automated ordering systems in restaurants, online banking, ATMs, electronic books lower maintenance frequencies on cars, robot vacuum cleaners, cheap fiber optic communications and much more. Anything that reduces the demand for less skilled labor in the towns where the knowledge workers live and work enables the splitting of America (and very likely England and Europe) into separate zones for the highly compensated and the marginally existing.

Anything that reduces the need for someone living in a house to interact with local merchants, local repair shops, local banks, local bookstores, post offices, local restaurant workers, and local clerks cuts the need for less skilled laborers near high skilled laborers. Restaurants are an obvious next candidate for automation with automated order taking with tablets on dining tables and smart phone apps for ordering.

While I think Tyler Cowen's Average Is Over 15%/85% zones make a lot of sense in terms of inevitability I think the 85% deserves a lot more thinking about. Neighborhoods full of 105-115 IQ people can't do rocket science or build machine learning models. But they certainly can control robots to build houses, farm, fell timber and lots of other activities. They can create value at least for themselves and friends. They can maintain clean orderly communities and force their local governments to be competent and uncorrupt. Allowed to separate from the lower classes they'd have few criminals in their ranks as well. They shouldn't have to slip down to the level of slums and shanty towns.

What's going to be critical to the fate of the 50th thru 85th percentiles: How much political power can they get to separate themselves from the segments of society that have very high social pathology? For example, will the elites keep insisting on section 8 housing in their neighborhoods? Classes with a mix of ADHD and well-behaved kids? Can the middle escape elite rule?

What would really help the next generation of the middle: embryo selection using already known genetic markers for intelligence.

Share |      By Randall Parker at 2014 January 01 01:52 PM 

WCN said at January 3, 2014 10:41 AM:

For the 50th-85th%, it will all depends on how many taboos they are willing to break to separate themselves from the high social pathology. The elite can afford to privately believe one thing and live by it while preaching something else. The middle to bottom can not. At least not now.

I can however foresee populists (even on the right) start to demand higher taxes on the rich as unemployment continues to rise. There will also be more demand to see a stop to the corporatism in DC. Many left-wing elites already see it in their interests to redistribute wealth because a) it ultimately ends up back in their hands anyway and b) they see it as the price of an orderly society. I heard Chris Matthews say as much just the other day on his TV show.

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