Wednesday, August 6, 2014

What a disappearing middle class doesn't look like

An interesting post the other day at KPC.  From the article, about engineering services in India:
Outsourcing is good for business and for society. Offshoring is…even better. . . .
My first exposure to Indian business and technical talent came in business school, where it was the Indian students who ruined the curve for the rest of us. But they were among the very few who had the family resources or the sheer audacity to get themselves to the US to compete in our market. For every one of them, there were…thousands just as sharp, coming out of the Indian engineering programs and remaining in India.. . . .
When a major project is won by one of the big Indian engineering firms, they may hire 5,000 software engineers to help on it. The firm will show up at a campus and hire – everyone. Literally make an offer for 1,000 people all at once; “All E.E. and Computer Science majors, report tomorrow.” Try to do that in America. 

The capitalist revolution is expanding, and it's a wonderful thing.  Material aspirations are real for many first generations around the world.

This reminds me of one of the facts about American life that undermines the widely held belief in the death of the American middle class.  That picture of India is the picture of a place where people aren't middle class but aspire to be.  People who are struggling, work.

Even if you could go hire 1,000 engineers in American universities, you'd still end up with 700 Asian engineers.

College is widely attended in America.  If the middle class is dying, it's not for lack of education.  And, once you're there, you can choose among hundreds of areas of study.  They all basically cost the same and take the same amount of time.  But, some require more work.  And the harder subjects generally pay more - engineering, sciences, computer & technology.  The main difference is - how hard do you want to work for the next 4 to 6 years in order to increase your lifetime earnings?  Now, wouldn't you think latest "first generation that will be worse off than their parents" would be clawing and fighting to get the spots in those subjects?  Yet, how many American universities would literally be closing down those departments if they didn't have immigrant students to fill up the classes with?

So, economically bipolar America is characterized by a bidding war on homes and mass enrollment in higher education, where students pay higher and higher fees to acquire the lowest paying, least challenging degrees, while Chinese and Indian students fill in the empty seats in difficult applied math and science programs?

It's pointless to be arguing about the legitimacy of 2 point shifts in the Gini coefficient.  That story is so wrong, it shouldn't even be an option on the multiple choice quiz - even the kind where "D" is always just a bad joke the teacher made up.

If you are becoming middle class, you become an engineer.  If you are middle class and know you're staying there, you study sociology, where you read neo-Marxist textbooks about the end of the middle class.


  1. Well...the problem is successful law student grads and business student grads still make more money than engineering grads. I think this is because of the ability to import engineering labor and students. Silicon Valley often says they need more technical talent, but that begs the question why does not Silicon Valley open up a technical vocational school with a two-year degree?


  2. Two words: student loans. Changes in policy mean that college degrees, even in engineering, don't necessarily pay back at all, and they're very risky.

  3. ...note that foreigners can't really be pursued for American student loans if they go back to their home countries...