A Better Way

This book has explored the nature and causes of the ‘underclass syndrome’ – the state of affairs where, in the midst of affluence, a significant percentage of the population are likely to experience poverty; where another significant proportion feel a risk of poverty and where there has been a general spreading out of the income distribution both between and within economic groups. We suggested that the trouble was the result of a developing ‘SM’ (severe meritocracy) caused in turn by inadequate economic growth (of output, capacity and the demand for labour), interacting with and exacerbated by the five additional factors of ‘technology’, ‘trade’, ‘services’ ‘women’ and ‘public policy’. In the chapters which followed we explored this causal nexus in more detail. The main findings are summarized at the beginnings of the chapters. From these, some specific discoveries stand out: (1) On both sides of the Atlantic, but much more so in Europe than in the US, there has been since 1970 a growing gap between total employment and the ‘effective’ labour supply (Chapter 1, Figures 1.4 and 1.5 and text). (2) The smaller employment gap in the US is offset by the fact that real wages of lower paid Americans have fallen well below the corresponding figures in Europe (Chapter 2, Figure 2.8). (3) On both sides of the Atlantic, since 1970, there has been a massive reduction in the proportion of the population who received only a ‘basicy education (‘Low-Eds’; see Chapter 2, Figures 2.1 to 2.4). (4) But among those who were left out of this education revolution, especially young males, not only in Europe, but also in the US, ‘nonemployment’ has also become widespread (Figures 2.5 and 2.6).