How valuable are wisdom and aging?
In the labor market, possibly not as much as they once were.
The plight of middle-class American workers, especially white middle-aged ones without college degrees, has been well-documented; their employment rate, mental health, physical health, addictions, and mortality rate are all trending in the wrong directions, often feeding off of each other and creating a literal death spiral on the micro and macro levels: for individuals, families, communities, states.
A fascinating recent paper hypothesizes that one unexplored, common denominator catalyst is the phenomenon of decline of “return on experience.”
The phrase “return on experience” is an ill-defined economic term that refers to the tangible benefits received for individual economic input–the product of years of work experience, age, and general wisdom and street smarts accrued from having been around awhile.
Even for routinized jobs where performance is not commonly expected to depend upon cognitive experience (and unlike judges, lawyers, doctors), task workers have in the past been assumed to become more efficient over time, and also to be rewarded for their loyalty to the profession or company.
What is notable here is the perception of what is earned and deserved, separate from its actual value.
Writes Benjamin Wallace-Wells: “Part of what Case and Deaton offer in their new paper is an emotional logic to an economic argument. If returns to experience are in decline, if wisdom no longer pays off, then that might help suggest why a group of mostly older people who are not, as a group, disadvantaged might become convinced that the country has taken a turn for the worse. It suggests why their grievances should so idealize the past, and why all the talk about coal miners and factories, jobs in which unions have codified returns to experience into the salary structure, might become such a fixation.”
Let us assume for argument’s sake that it is true unmet expectations send many middle-aged Americans into their death spirals.
So what now?
If it is well-preached that life is not fair, then it is time we take the next step and know that the labor market is unfair. Millennials have already had to grasp this: taking on oppressive loans for college degrees that are less like vocational training and more like labor market hazing. A test to see, “how badly do you want it?”
Robots will replace almost every physical task job, and many service jobs, leaving all but the most cognitively-demanding critical-thinking jobs. Whether one can or wants to take those remaining roles on is beside the point. The bifurcation of job types, and thus income distribution, means our hand is forced to individually choose between two stark lifestyles. Unfortunately, complacency and willful ignorance means that many Americans must make this choice later in life, after attachments to their past have been made. What millennials never had, baby boomers are currently having pried away. Who can say which is more painful. We do know that a fixation on what was, without grasping what is, is an error that never goes uncorrected.