Why the future will be unfair

An economist argues that the US needs to start looking at inequality (as, indeed, do other developed economies) in a more dispassionate and analytical way.

Of all the many changes to American society since the 1960s, one of the most unexpected is also one of the most overlooked. Between 1969 and 2009 the median income for men in the US fell somewhere between 9 and 28 per cent, depending who you talk to. This is the departure point for Tyler Cowen’s new book, Average Is Over.

Having chronicled the US’s economic vulnerability in The Great Stagnation, Cowen, an economist at George Mason University in Virginia, says we have entered the age of “hypermeritocracy”, in which the top 10 to 15 per cent of Americans are “extremely wealthy” and lead “fantastically comfortable lives” and the rest work in “stupid and frustrating” jobs for falling or stagnant wages.

These trends are clearly evident in the US today. He writes that 60 per cent of the jobs lost during the recession were mid-wage jobs, while 73 per cent of the jobs created were for workers on $13.52 (£8.36) an hour or less. In the longer term, intelligent computers will further dampen demand for mid-wage jobs and only those with the ability to work with intelligent machines, or whose skills are irreplaceable, will benefit.

Free online education – something that Cowen is already pioneering with his online economics courses at the Marginal Revolution University – will offer opportunities to those from deprived backgrounds to join the new elite, and so the future will be both “more meritocratic and more unfair”.

Cowen says that many will struggle to reconcile this tension between meritocracy and fairness. “This juxtaposition is a kind of deliberate confusion,” he says to me when we speak over the telephone. “The point is that this world will be confusing and it will be disorientating . . . The final picture is one with both utopian and dystopian elements.”

He says he doesn’t want to tell his readers what to think, but argues that the US needs to start looking at inequality (as, indeed, do other developed economies) in a more dispassionate and analytical way. “There are many books on inequality but quite quickly they tend to run on the left to preaching some message; and on the right, maybe a kind of denialism or moralising about people who aren’t doing as well,” he says. “I tried to avoid both directions to see if we can get our understanding a bit further.”

Cowen was New Jersey’s youngest-ever chess champion, aged 15 when he won in 1977, and he devotes a whole chapter to the intrigues and wider implications of freestyle chess, in which players are allowed to use computer programs to improve their game. In the future, the “wisest” of us will entrust computers to make decisions for us, not only on chess moves but for affairs of the heart, he believes.

For Cowen, algorithms can hold the key to a happy marriage. He met his wife through the online dating site in 2003. She is a liberal but he describes himself as a “libertarian” and “conservative”, and admits that his wife might have been less keen on a first meeting if she had known his political leanings. The medium of online dating forced her to abandon her usual intuitions – to their mutual benefit.

“I have quite a few friends who are single and I find a lot of them have quite arbitrary standards,” he says. “Over time, programs are going to nudge us out of that. The people who are willing to be nudged will on average marry better and they will make a lot of better choices.” If average is over, so is romance.

Russian chess world champion Vladimir Kramnik plays his sixth and last chess match against chess computer 'Deep Fritz'. Image: Getty

Sophie McBain is a freelance writer based in Cairo. She was previously an assistant editor at the New Statesman.

This article first appeared in the 07 October 2013 issue of the New Statesman, The last days of Nelson Mandela

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Can’t afford to die: the rise of funeral poverty

The cost to councils of public health funerals has risen by 30 per cent in the past four years. 

Dying, as you'll know if you've ever planned a funeral, is an expensive business. If your relatives plan a service with a funeral director, they should expect to pay around £3,500*. Burial alone will cost you around £1,750 (making cremation, at £660, seem like a positive steal). And that's before they've even bought a box to put you in. So it is unsurprising that, according to insurance company Sun Life Research, one in seven families struggles to pay funeral costs. 

Families who can't pay are left with two options. First, there's the Social Fund, a centrally-managed pot of money which can offer a one-off payment to help with funeral costs (it also covers things like maternity grants and the winter fuel allowance). Councils themselves also offer "public health funerals" for either people who die with no next of kin, or whose next of kin can't afford to bury them.

Public health funerals are, it seems, on the rise - partly because of the rising costs of burial and the limited nature of the Social Fund, but also thanks to austerity measures which mean that luxuries (like burying your loved ones) are no longer within reach for the poorest families in Britain. 

Coffin up

A Freedom of Information request by BBC Local Radio found that, according to responses from 300 councils of the 409 who offer public health burials, the costs to councils of these public health services was up an average of 30 per cent from four years ago. Part of this rise is due to the skyrocketing costs of funerals, but part was down to the fact that the number of public health funerals had increased by 11 per cent.  

The assistant director of bereavement at Cardiff City Council told the BBC that when he started his job 20 years ago, the service was mostly used by "vagrants or alcoholics". However, the pool of those accessing council funds for burial has widened dramatically: 

"Over the years it has increased, and sometimes there are families but they are estranged or divorced, or there are families where they claim there's an inability to pay."

Another factor is that applying to the Social Fund, as opposed to your council, is complex and confusing, so many who are eligible for it don't get the money they're entitled to. Even if they do, they're only given £700; an amount that hasn't increased over the past decade despite the rising cost of funeral services. 

Grave policies 

Social policy academics from the University of Bath, led by Katherine Woodthorpe, recently investigated the role of bereavement in public policy. In their paper, they note that "little attention has been paid towards benefits associated with bereavement". The researchers conclude that the system needs to be simplified so families don't have to pay the costs up front, then apply to complicated systems of funding afterwards:

The most constructive change to the current system would be to re-organise the claim process so that individuals could be informed of their eligibility and (potentially) what they might receive from the state before committing to funeral costs. The current practice of submitting a claim after committing to funeral costs is counterproductive, leads to confusion and is the creator of unnecessary stress and financial difficulty for newly bereaved individuals.

When Woodthorpe's paper came out last year, the Telegraph reported its findings under the headline "Paupers’ funerals making comeback as families exploit loophole to save funeral costs", based on the fact that some families who couldn't afford services were going to councils for funeral funding rather than applying to the Social Fund. It included reports of council workers' "anger" at seeing people "who claimed they could not pay then turning up to the laden with expensive bouquets and other embellishments". 

It’s more than possible that these funds are occasionally misallocated and exploited, but we also need to remember that respectful disposal of the dead, while something we take for granted, is deeply ingrained in our culture – which is why there is a dedicated public health budget to ensure that this process isn't restricted to those with thousands of pounds in the bank.It's also worth noting that even the price of the most "expensive" bouquet wouldn't make much of a dent in modern funeral costs. 

It’s perhaps a sign of the times that a respectful burial, which is a deeply symbolic and emotionally significant ritual in all cultures, is now seen as a luxury, increasingly beyond the reach of the poorest families - and one which we bedgrudge those who are too poor to access it without help. 

*Costs are estimates from Money Saving Expert. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.