Three Failures or One Failure?

From New York Magazine via MSN Eric Levitz proposes that three policy failures are “killing the American Dream”:

The United States has never been richer. In 2018, American households boasted a collective net worth of over $98 trillion. If that wealth were divided evenly across the U.S. population, every human being in our country would have roughly $298,000 to their name — and every family of four would be millionaires.

Few Americans feel entitled to full communism. But many do have trouble reconciling their nation’s unprecedented wealth with the increasing insecurity of middle-class life. In the 1960s, economists worried that 21st-century Americans would struggle to find purpose once economic progress turned full-time employment into an archaic chore practiced solely by the eccentric, like churning butter or collecting CDs. And yet, in 2019, middle-class Americans are working harder than ever. We were promised flying cars. Instead, we got 60-hour workweeks.

So, what went wrong? How did we miss the exit for fully automated comfort-plus capitalism?

The three failures he cites are:

1. We let the wages fall too damn low.
2. We let the costs of housing, health care, and higher education rise too damn high.
3. We let our social welfare institutions (such as they are) grow too damn outdated.

and concludes:

The American Dream isn’t dying of natural causes. We know what must be done to revive it. The problem is simply that a lot of powerful people would rather pull the plug than pay for the cure.

Let’s assume arguendo that he has identified our three biggest policy failures. Are they not actually one big policy failure? Is not immigration of low-skill workers, particularly illegal immigration, a major contributing factor in all three. A reliable, predictable, unending supply of workers places employers in control of wages. Further, when the workers are unskilled jobs are tailored so they can be done by people with minimal skills.

The cost of housing, health care, and education are all affected by immigration as well. In New York City 40.6% of public school students are Hispanic, in Los Angeles Unified 64.9% are Hispanic, and in Chicago 47% are Hispanic. Most of these kids are either immigrants themselves or the children of immigrants and have low comprehension of English. The cost of education for each child are $17.5, $11K, and $15K respectively. A little basic arithmetic tells you that immigration brings high costs and immigration of people who will receive low wages means a high net cost.

As to his third “policy failure”, I know of cases in the LAUSD in which primary school classes of ten students have six different first languages. What sort of institutions would be required to deal with that situation? In Chicago the voting instructions are the size of a small phonebook because of the multiple language in which the instructions are printed. I don’t believe any institution is capable of dealing gracefully with such a situation.

It isn’t merely housing, health care, and education that are too expensive. We pay more per mile of road constructed, more per mile of pipe laid, more for our military, and more for just about every service for which government at any level pays than any other OECD country. Spending more because we have more people than we otherwise might is one thing but it doesn’t explain why everything that government pays for costs so much more here. I think it is a more general lack of social cohesion which is exacerbated by our present very high percentage of immigrants but which has deep societal roots. That limits the range of issues that government is capable of addressing and not merely for lack of funds.

I’m open to other explanations but those seem to make the most sense.