Inequality.org

connecting the dots on a growing divide

Keeping the Rich Comfy: Your Job Future?

We’ve lost our manufacturing economy in the United States. Now we’re losing our service economy. We’re rapidly becoming, some observers fear, a ‘servant economy.’

By Sam Pizzigati

Fire fighter, basketball player, lion tamer, teacher, nurse: Ask little kids what they want to be when they grow up, and you’ll get all sorts of answers. But you’ll never hear this one. You’ll never hear youngsters say they want to devote their careers to serving rich people.

Today’s youth might want to reconsider. They’re facing an American economy where serving rich people increasingly seems to offer the best future with real opportunity. Or, as the economist Jeff Faux puts it, we’re well on the way to becoming a full-fledged “servant economy.”

We’ve had “servant economies” in the world before. At times, people even rushed toward servant status. In the early industrial age, jobs in mines and factories would be dirty and dangerous and pay next to nothing. Domestic work for rich families could seem, by comparison, a relatively safe haven.

But that calculus changed as workers organized and won the right to bargain collectively for a greater share of the wealth they were creating. Over the first half of the 20th century, America’s super rich lost their dominance, and fewer and fewer Americans worked as servants for them.

This state of affairs didn’t last long. Since the late 1970s we’ve witnessed an assault on the building blocks of greater equality — strong unions, steeply graduated progressive taxes, regulatory limits on business behavior — that has hollowed out the American middle class.

Good manufacturing jobs have largely disappeared, outsourced away. Most Americans no longer make things. They provide services.

A half-century ago, we did collect significant tax revenue from America’s wealthy. No longer.

We could, of course, have a robust “service” economy, if we built that economy on providing quality services to all Americans. But providing these quality services, in everything from education to health to transportation, would take a significant public investment — and significant tax revenue from America’s rich.

A half-century ago, we did collect significant tax revenue from America’s wealthy. No longer. Tax cuts have minimized that revenue and left public services chronically underfunded. That leaves young people today, as economist Jeff Faux points out in his new book The Servant Economy: Where America’s Elite is Sending the Middle Class, with a stark choice.

Young people can become engineers and programmers and spend their careers in “pitiless competition with people all over the world” just as smart and trained but “willing to work for much less.” Or they can join the servant economy and “service those few at the top who have successfully joined the global elite.”

In this new “servant economy,” we’re not talking just nannies and chauffeurs. We’re talking, as journalist Camilla Long notes, “pilots, publicists, art dealers, and bodyguards” — a “newer, brighter phalanx of personal helpers.”

The entire world has only about 3 million people worth at least $5 million.

Want to see the world? In the new servant economy, you can become a “jewelry curator” and voyage to foreign lands to pick up gems for wealthy clients.

Want to face daily challenges? You can become a concierge and hire an elephant for a wealthy patron’s wedding reception one day, get your patron a chess match with a grand master the next.

Or, if you lean toward the traditional, you can always shell out $12,000 for a month-long course that will certify you as a manservant in good standing with the Guild of Professional English Butlers.

A top butler can pull in well over $100,000 a year. But serving the rich can be far more lucrative than that. Interior decorator Michael Smith pulled in an $800,000 fee for his work on a Wall Street CEO’s office. New York attorney David Boies has a plutocrat-friendly law practice — and a reported $1,220 hourly fee.

John Blackburn, an architect in Washington, D.C., specializes in designing horse barns for wealthy equestrians. The barns run up to $3 million each. His fee, the Washington Post reports, ranges from 8 to 10 percent of each barn’s cost.

But we have a basic problem here. We have a limited pool of super rich who can afford to commission horse barns and ask for elephants.

Sign up for To MuchAs of this past summer, calculates the Credit Suisse Research Institute, only 38,000 Americans had fortunes worth at least $50 million. The entire world has only about 3 million people worth at least $5 million.

Even if those 3 million gave gainful “servant economy” employment, directly and indirectly, to an average 100 people each, we would still have another 4 billion or so people on the outside of the “servant economy” looking in.

The “servant economy,” as economist Jeff Faux makes clear, can only be a dead end. We need to change course.

  • JPSnoopington

    The U.S. is still the largest manufacturing nation in the world. Yes, China is getting close, but nowhere near as close on a per capita basis. I’m still working on accumulating my $5 million, but I don’t have to be anybody’s servant either. I could use a good cleaning lady, however. The one I had for over twenty years got a real job.

    • allen

      this is a bizarre statement… are you living in the same country ?? China getting close? have you been there? i have in 2005, every major us and japanese company has huge factories there the likes of which this country hasn’t seen in at least 50 years. The only manufacturing we have left in any significant amount is military based. And even there, if it doesn’t contain classified content, that too will be outsourced… how do i know, because i work for a company that does just that

      let us know when you get to that 5 million mark mfg whatever it is you make

      • JPSnoopington

        U.N. statistics: U.S. manufacturing output $1.83 trillion, China $1.79 trillion. By the way Japan is third at $1.05 trillion. U.S. Department of Labor will also say the U.S. remains in first place. Your expertise due to visiting China must have allowed you to observe there are a lot more people there. Therefore the per capita manufacturing output of the U.S. is still unmatched. I used to work for a manufacturer of electric generators, but am retired now. The plant is still there.

        I simply live off retirement savings now, but still end each year with more than I started. The $5 million hurdle will be difficult, but I’m chasing it and not sitting around whining about the people who have already arrived there.

        • allen

          whoa wait a second… I’m not whining, just pointing out the obvious! Good for u that u r retired, my parents we’re able to comfortably retire also and mom had just a high school degree and my dad a tech degree in graphic design…

          i’m not sure what the point of your statistic is. There are way more ppl in china, but not all work in mfg and the number drops further when u consider the number working for formerly US companies.

          If you are tying to dispute the fact that the 1% has essentially outsourced a significant portion of the MIDDLE CLASS then we have to agree to disagree.

          All the economic statistics and just looking around at the ppl u know in your own life will reveal that the middle class has gotten crushed by outsourcing during that past 30 some odd years. You don’t need any stinkin degree to see that.

          I follow this site because i see what they write about reflected in my own life and therefore have no reason to disagree with a word they write.

          - former republican engineer

          • JPSnoopington

            The 1%, middle class, etc. are all meaningless terms to me. I don’t care or worry about classifications or what others may have. I simply worry about advancing myself and have gone from poor 40 years ago to pretty comfortable now. Big deal. The vast majority if not all of my lifelong friends have done the same thing. It’s called work and savings.

            Here is a file for you to check out – particularly Table 5:

            http://www.bea.gov/newsreleases/industry/gdpindustry/2012/pdf/gdpind11_adv.pdf

            Then tell me where the line item(s) are that explain how the “servant economy” is taking over the U.S. economy. I simply don’t see them. This should be interesting since you don’t disagree with any word written on this site.

          • noname

            He doesnt see what they write about reflected in his life afterall he has a net egg of millions to retire off with while middle class america have being taken away

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  • SallyW

    “Serving the Rich” is insulting and seems a blatant attempt to stir up class warfare. In your article you insinuate that anyone performing a service for someone that makes more money than themselves is a “servant”. Does that make my mechanic a servant? Also, if a person is “rich”, they often have to perform some sort of occupation to get and or stay rich. If they are a CEO of a company any work 100+ hours a week, why shouldn’t they employ a house cleaner, laundry service, etc.? Is that not directly stimulating the economy? Is cleaning houses an ignoble profession now? In case you did not know, house cleaners charge $25+ per hour, which is pretty dang good for an occupation that requires no degree. It is an employer/employee relationship, not a “master/servant” relationship.

    You, sir, are what is wrong with America. You are planting a sense of entitlement in people that they have not earned. People should be encouraged to reach for their own goals through study and hard work instead of in someone else’s pocket.

    • allen

      Maybe you should re-read the article. The difference between a mechanic working on the car of his local dentist/doctor is quite different than being a butler for a multi-millionaire/billionaire.

      Don’t you see a vast degree of difference between those 2 scenarios? If not then get your head out of the sand.

      You SallyW are the problem with this country. Buying into the constant vitriol spewed by the likes of FOX news and the ultra right wing radio talking heads. The middle class did not start this class war. It has been perpetrated by the corporate interests that have sent millions of middle class jobs to communist china so that hedge fund managers on Wall street and CEO’s can buy a few extra mansions and hire a few more servants.

      • JPinkertonSnoopington

        SallyW is correct. Your Utopia awaits you in Cuba. Go for it.

        • allen

          this is my country and my guy just won the election… ’nuff said

          • JPinkertonSnoopington

            In chess terms, the election would be called a stalemate. No big deal. One might have to change investing strategies, but that is almost always the name of that game. I started the changes in August in anticipation of the outcome. The adjustments continue this week and next as usual. Simply a little tweaking so far. No need to ever take on that servant role you seem to dread so much.

          • Rick

            If its a stalemate then you must live in the FOX bubble, that the pundits talk about, the alternative universe where everything is ok

          • JPSnoopington

            I do not recall writing everything is ok. The president won re-election with ten million votes less than he got four years ago (and 50% of the vote), the senate is still subject to filibuster rules, and the house of representatives is still under control of the same leadership. I don’t need any particular news source to figure out those facts very quickly.

          • Rick

            And JPinkertonSnoopington,your guy won’t get off the stage,lol

      • Rick

        My father, a CEO during the 1980′s, cut his own lawn, let his wife cut his hair and helped us clean the table each night before joining us in front of the TV. Why can’t a plutocrat have a normal life and not need “helpers”,

        Is what they do that magnanimous that this other stuff is now beneath them

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