The future of work, and those new service sector jobs

Via Angus, here is a new report on those new service sector jobs:

As AI and globalization chew up good jobs for the non-elites, there is a bright spot on the career horizon. The market for household staff is booming.

According to the WSJ, “A good housekeeper earns $60,000 to $90,000 a year. A lady’s maid can make $75,000 a year. A butler may start at $80,000 a year and can earn as much as $200,000.”

And, there are openings, “Demand for the well-staffed home is on the rise, according to agencies and house managers alike. Clients are calling for live-in couples, live-out housekeepers, flight attendants for private jets, stewards for the yachts and chefs for the summer house. In San Francisco, Town and Country Resources, a staffing agency for domestic help, has seen demand for estate managers and trained housekeepers grow so fast the agency is going to offer its own training programs in subjects like laundry, ironing and spring cleaning starting in 2014. Claudia Kahn, founder of The Help Company, a staffing agency based in Los Angeles, says she used to get one call a month for a butler but has gotten three in the past week alone.”

If your skill set is more exotic, don’t despair:

“She will also be bringing with her the two animal trainers who come seven days a week to care for Prince Mikey, a white-faced capuchin monkey. Prince Mikey’s trainers work with him five to six hours a day during the week and three hours a day on weekends.  The annual cost is in the six figures”

Here is a related blog post from Annie Lowrey.  I leave it as an exercise for the reader to deduce the implications for the finances of higher education in this country.


Ironic that Roddenberry's end of scarcity would have really resulted in a strict hierarchical status game.

Woo-hoo! I'm looking forward to sending my kids off to go $100K apiece in debt for the Masters of Household Service degree that will be necessary to get those servant jobs. (At least until they're replaced by robots, but that probably won't happen till they're in their 40s. And since they'll never have enough money to get married or have kids, at least they won't have dependents to take with them when they end up sleeping in our basement or a cardboard box, whichever is roomier and more comfortable.)

This is prosperity?! You can keep it.

Ive long claimed we were turning into an "upstairs-downstairs" economy.

So what else is going to make us look like the UK in 1890?

You mean the peak of British global preeminence? Well for America it probably involves getting a navy that rules the waves.

The U.S. already has that, since the end of WWII.

Though in the age of one nuke equals one carrier battle group, I'm not sure that such a navy is as valuable these days.

I leave it as an exercise for the reader to deduce the implications for the finances of higher education in this country.

I think the possible social and political implications are far more important and interesting.

As AI and globalization chew up good jobs for the non-elites, there is a bright spot on the career horizon. The market for household staff is booming.

Careful. You’re falling into an abyss that has opened up in just the last generation:

The Iron Law of Wages is predicated on the fact that wages will not fall below subsistence. When you introduce birth control and feminism (the State as alpha male), the game changes in a fundamental way so that wages can fall below the cost of reproduction.

Indeed they have.

This is why many people are in danger of being called “kulaks” by their own constituents and a replay of the French Revolution is in the offing.

You have been warned.

Remember Tolstoy’s warning to the Czar:

>>...and a replay of the French Revolution is in the offing.<<

Less that than the masses gradually voting in Scandinavian-level social democracy. Cowen's 15% techie ubermenschen will either be paying out a hefty chunk of their income in taxes, or they'll be doing their jobs in Bangalore.


>Cowen's 15% techie ubermenschen will either be paying out a hefty chunk of their income in taxes

We already are.

Tolstoy had his virtues but was a self-centered, violent, and cruel child of a slave-owning society, who likely spread or caused, in his self indulgent youthful lust, venereal disease to dozens or hundreds of unsuspecting daughters of poor peasants. He was unkind to his wife and children and he politically supported, with great self-righteous passion, young people who, in their elder years, long after the lad Leo had spent his last ruble, fornicated with his last peasant, and written his last self-righteous view of his own cherished closeness to the soil, murdered millions of sons and daughters of poor people, millions of whom were better in every way except for literary style better humans than Leo. The czar had his virtues, including accepting a martyrdom that was beyond anything Tolstoy could have borne, but was a bigot and a spoiled and foolish child of luxury who did not listen to the advice of people with a greater love of the Lord and the Lord's people than his mediocre feelings of love could understand, and who is recorded as having been cruel to the point of unreasonable hatred to many of his subjects, Russian, Ukrainian, Pole, Jew, and Finn alike. So, sad to say, quoting Tolstoy against the Tsar has all the credibility of quoting one stooge against another.

Whether one agrees or disagrees with Tyler Cowen, it hardly seems fair to suggest he has anything to learn from cruel losers like Tolstoy or the Czar, at least on questions of compassion regarding employment issues.

Tolstoy may have been a cruel loser, but his warning turned out to be prescient. Tolstoy himself is beside the point. In any sort of replay of the French Revolution, I suspect most of the revolutionaries won't care about what Tolstoy was like or what he said.

I've already seen Downton Abbey.

But Carson doesn't hold a doctorate in Butling Science.

How is that the Future of Work? It's just a couple hundred rich people looking for a few thousand people for domestic service needs. Demand for those types of services has always existed.

Lowry's more on the money, with growth in "hospitality services" like restaurants and hotels (which are location-sensitive and also good candidates for higher minimum wages).

I can't see how that's not right.

I know there are a lot of executive assistants in D.C., etc. that make $70 to $150 a year, but there are an awful lot more in the country at large that make $30 or less (and would be called secretaries except that it doesn't cost anything to label them executive assistants or office administrators, etc.).

I know pretty poor people who hire in someone twice a month at $50 a pop to clean house because their MS, age, COPD, etc. makes it hard for them to clean thoroughly. I used to live in a neighborhood where the moms recommended around a woman who didn't speak much English but would clean your bathrooms for cash when you were either working your job all hours or so tired out from staying home with toddlers all day that you couldn't get around to doing it yourself. I have worked cleaning houses for seniors with medical problems through a community program -- not, believe me, a $80 a year gig.

If the future is full of servants, they are going to look like that -- hired out on contract or through a service, and making good wages for poor people, a decent second income, that sort of thing.

It seems like the prevalence of household servants among the middle class is far less now than before, say, 1960. (Think of the movie The Help.) That would be paradoxical given the supposed widening of the distribution of income. A Chilean friend told me that Americans live hard lives because they cannot afford servants. Neighbors who had previously lived in Hong Kong also lamented the unafforability of servants. Back there they had a maid, a cook, and a driver. If our income disparity is so great, why don't I have a maid?

Because the pool of slaves that are available to upper class Chileans or Hong Kongers doesnt exist in America

Pretty much - the US doesn't have labor that cheap or without alternative options, not even with legal and illegal immigration. It's also usually seen as somewhat degrading, and that's been true for a long time (back in the 19th century, women working as domestic servants in the US usually got out of it as soon as something better came along, if they were white).

I don't mind that situation, either. Live-in servants from abroad are usually quite vulnerable to abuse and mistreatment by the families they work for.

Then I wonder whether racism skewed the results compared to the actions of a non-racist Homo economicus. Does this mean that black household servant enjoyed an irrational market advantage? Do they owe descendants low-income whites monetary compensation?

It almost certainly did. Black women serving as domestic staff did not have as many options as white women if they left domestic service.

A co-worker and I were in Dubai for work. We had dinner with an Emirati. She was trying to arrange for her driver to pick her up. We started talking about drivers and maids. (Her maid was live in full time.) When my co-worker and I said, "We don't have maids - that's something for rich people," she asked in horror, "But who cleans your houses?" Co-worker and I laughed and said, "We do!"

Ha ha ha! Those wacky Wahabbists!

I really do wonder why Tyler doesn't post about the Arab emirates. They're building vertical cities, they've got loads of immigrants, staunch globalists, governance by a technocratic elite, bankrolling democratic uprisings (well, everywhere except the Arab emirates).

What's not to love? They seem ahead of the curve.

Depends on how you define "servants." I grew up in the Northwest where nobody in the middle class had family employees. Women did the cooking and cleaning, children had chores, men mowed the lawns and teenagers babysat on the weekends. Now most middle-class families seem to have home cleaners and lawn services, and many have nannies. A goodly proportion of these new servants are undocumented, and my impression is that most of the rest are paid under the table. Pretty crummy deal for the hired help.

Maybe it's good that the uber-rich now are providing actual well-paid jobs (presumably with taxes withheld, health insurance and 401Ks) for family retainers. Myself, I would rather see young people acquire the sort of education they need to compete in the world economy rather than aspire to be servants to the 0.1 percent. Unfortunately, we don't seem to be offering that kind of education these days.

Most of the Filipino immigrants I've known in California grew up in families that had several live-in servants.

Were the servants California or the Philippines?

Arggghhh!!! This outrages me so much! How dare those rich fat cats offer willing workers good paying jobs?!

You know, I kind of liked growing up in the middle-middle class San Fernando Valley in the 1960s and 1970s, where practically everybody had a single family house with a yard, and maybe even a pool, but almost nobody had a live-in servant. (The Hollywood Hills were different, of course.)

I'm having a hard time seeing how that was so much worse than the Utopia of the Economists that we're headed toward. (And please, no references to how the awesomosity of Twitter makes up for all that. Use the concept of "ceteris paribus" in your answers.)

Now I quite dislike Twitter. But I it would like you to explain how Twitter *so bad* that getting rid of if would be worth relegating all those Hispanic immigrants back to Mexican peasantry.

Idyllic, but only sustainable when the vast majority of the world's population lives in abject poverty. Unskilled sub-100 IQ workers could earn middle class wages circa 1965 because they had no global competition. Want to make some reasonably complex product? Dearborn is pretty much you're only option, which means even crappy workers in Dearborn earn a lot. Even Europe was still recovering from the total destruction of World War II. Today, you can do Dearborn, but you can also do Seoul, Taipei, Shenzen, Mumbai or Bratislava. At current trends in a decade or so you'll probably also be able to do Lagos, Ascension, or Port Moresby.

So the defense is that sub-100 IQ American workers might have to grovel a little bit more, and get by with crappy health insurance. But for every one case of that, there's two dozen East Asian peasants who are no longer nutritionally deficient. For a citizenist like yourself, that may not be compelling. But even if you wanted to turn the clock back you couldn't. Asia is already rich and developed, and short of a massive bombing campaign nothing will change that.

Even trade barriers won't revive middle class prosperity. The 1960s wasn't just about American firms having to hire American workers, it was also about America having a virtual global monopoly on most of the high margin industries. Strong dollar purchasing power meant that the things the US has to import were dirt cheap by modern standards. Look at the price of gasoline, beef or copper from 1965 compared to today. Even if we force Apple to open factories in San Fernando, we won't be able to force Saudi Arabia to sell us cheap oil. Trade barriers won't make these goods cheap again, in fact they'll make them a lot more expensive on a dollar basis. Autarky will drive unskilled wages up, but the cure's probably worse than the disease as food, fuel, clothing and other basic goods that heavily make up the lower-income consumption baskets get very expensive.

Tyler gets a lot of flak for "just accepting how things are." But that world is dead, there's no going back. Tyler seems to be the only person who's accepted reality and is trying to make the best of it.

The world getting richer is supposed to make them want more stuff from workers.

True about the price of gasoline, beef, and copper. LVT was supposed to take care of that, back in the day where everyone was socialist enough to nominally approve of land reform.

There is currently a “comparative advantage” theocracy which defines security in terms of trade route stability rather than independence from trade. To this theocracy it is heresy to suggest that “national security” be founded on national self-sufficiency because the first and foremost objective must be to avoid war in any form, including “trade war” (we don’t need to even mention individual warfare such as “duels” nowadays, do we?). A nation that attempts to retain indigenous capabilities for the purpose of security is the moral equivalent of a family living far from any urban areas that educates their own children and “stockpiles” food, ie: “a clear and present danger”.

From this perspective the deindustrialization of America (deagriculturalization would be more difficult) was akin to confiscating a rural family’s tools, or imposing regulations on local trade (ie: FDA laws against local trade in food production) so they have to specialize. This is real meaning of the authoritative injunction “Get a job.” At an international level it is a demand that a nation become dependent on trade. Independence is hate.

Any value stream has a net present value which means it can be treated as capital. Conversely, any capital value has a time value, frequently called rent. You can rent a backhoe but when a plumber comes out to fix your plumbing, you are renting him as a piece of capital equipment. Even the operational costs, such as fuel and maintenance for the backhoe, can be treated either as rent or as capital. Take for example diesel fuel for the backhoe. It can be viewed as renting the petroleum infrastructure, including deposits, for a certain amount of time.

In this “economic” sense (excluding of course, “political” economy), humans are just pieces of capital equipment. Like all capital equipment, they have a lifecycle and associated rental costs. “In place” rental cost simply includes the rental of the relocation infrastructure.

It is no accident that the field of political economy is dead and has been dead during the 20th century (except, of course, for Marx which by treating all value as labor essentially negates political economy by going to the opposite extreme). When your culture is slave-based, the very idea of political economy is nonsense. So “global labor arbitrage” is simply “global arbitrage” whether viewed as capital or as rent.

Here we see the dogma of the globalist theocracy in action. They don’t really care about economics in terms of risk adjusted net present value. If they did, they’d realize that investing in trade route stability is sometimes less profitable than investing in independence. Their goal is to enslave humanity because it feels right to them and all of their economic theories are window dressing for what is essentially a theocracy whose only real god is their truly “supremacist” predilection. Economics be damned if they can’t have slaves to boss around.

Port Moresby? Surely you jest! It is only Australia, who doesn't want a flood of refugees, that keeps the lid on.

I'm under no illusion that Port Moresby is a nightmarish backwards hellhole. But Papua New Guinea GDP has per capita has more than tripled since 2000. The economy is on a development tear. By 2030 I don't expect it to be a nice place to live, but I certainly expect at the current pace that it will look less like the Congo and more like Mexico.

One of the biggest unsung stories of the past decade is just how how much the most hellish places on Earth have become less hellish. Probably more so than any other time since de-colonization. The flip side of that story is that as places like Cambodia transform from black holes of human despair to quasi-functional members of the globalized economy it drags down the wages of low-skilled labor in the developed world.

You mean since colonization? Colonization was the bringing of civilization to people who lived in the state of nature, like animals. De-colonization was the reversal of that.

Why is civilization better than the state of nature?

Not only these people, but the rest of the animal kingdom lived and lives like animals. If civilization is so great, why not make all animals live in cities rather than in the state of nature?

>>Tyler gets a lot of flak for “just accepting how things are.” But that world is dead, there’s no going back. Tyler seems to be the only person who’s accepted reality and is trying to make the best of it.<<

...which comes across a lot like "bend over."

The mass cramdown Tyler describes runs contrary to the American dream as advertised and, as a result, is going to be unacceptable to the masses. There may not be much they can do about it economically, so they'll use the political leverage of their numbers to try and minimize the loss of their standard of living. Hence, we'll end up with social democracy.

All the libertarian schadenfreude in the world can't stop that.

Tyler's "Average is Over" vision is essentially a Huxleyan one. It's a less heightened version of Brave New World. In the real world, thought, that's not a product that's going to sell to most Americans.

Gee Steve, I remember growing up with my four siblings in a single-family NW suburban Chicago community in the 1970s. My folks still live in that house, and I live 10 minutes away.

During the idyllic, pre-Great Stagnation 1970s, my old man was out of work for months. I only found out recently that my stay-at-home mom took a job cleaning neighborhood houses to help make ends meet.

So I guess I'm saying "rose colored glasses, great stagnation my ass."

This blog has gradually turned me into a socialist.

LOL. +1.

Let them eat beans!


Race Against the Machine and The Light in the Tunnel turned me into a Socialist.

Why distinguish between people who will be replaced by robots/software in 5 years and those who will be replaced in 50 years? Let's all eat beans together!

I wouldn't say socialst. More of a nationalist, albeit with "social" results. If you have a cultural inclination towards the old English/American concepts of equality (channeling Chesterton's Distributism), but there's also a pulls towards socialism due to global competition, then one needs to decide if you want extreme wealth disparity within or without the nation. One can have open borders and free trade and the future will be more of the same, or one can become a closed shop. Restrict imports with a high general tariff, restrict immigration and force up domestic wages.

Interesting read re: increasing radicalism - with a shout out to Brooklyn:

"Every time I’ve come home to the US from my home abroad over the past four years, I notice a trend among people of my demographic: they have become increasingly politicised – and increasingly radical."

"It’s impossible to pin down a single explanation for this revival but a few things make sense: capitalism offering few opportunities to young people, a formal political structure that is paralysed and seems to ignore the concerns of most people, the internet providing new opportunities for intellectuals to find each other. Where it is going, what it means in terms of formal politics, the future of social movements in the US, or the overall intellectual climate are hard to predict."

"What accounts for this? An answer that sounds straight from Marx’s mouth might be the most obvious one: capitalism is in crisis. People in their late 20s and early 30s graduated university and entered the workforce in the worst economy since the Great Depression. GDP growth has stagnated since the financial crisis began in 2008 even under the “recovery”. Long-term prospects don’t look great, either, with some economists even suggesting that the era of growth might be ending in the US. Young people have been especially hard-hit by the downturn. Unemployment rates for people aged 18 to 29 are around 11.8 per cent compared to 7.3 per cent for the economy overall. And many economists warn that the prolonged unemployment will have lasting effects, permanently reducing incomes for this cohort."

"If that’s not enough to convince you of a turning tide, then consider that inequality in the United States has reached astounding levels. In the current recovery, 95 per cent of the gains have gone to 1 per cent of the people. It isn’t surprising that people are asking more systemic questions and attempting to imagine alternate futures, even futures that don’t include capitalism."

"At the moment there is intellectual ferment but only vague flickering of action. And there remains tremendous ideological and intellectual diversity, even if the publishing and thinking world is the most visible manifestation of the current moment. But it was the anti-Stalinist left, much of it based in New York, much of it centered around magazines, that helped to lay the groundwork for the New Left of the 1960s. What happens next remains entirely unclear."

This is why I feel TC's premonitions may not come to pass - the hyper-meritocracy will be derailed by politics. When more young people wake up and realize an idevice is not a good trade-off for a full-time job with benefits there will be political push back.

The good news is the increase in the labor force and the higher unemployment rate makes primature (before we have a rip-roring boom going) Fed "tapering" even less likely.

How many clients do these agencies have anyway and how many of those agencies are there? It's difficult for me to see what the demand is for household staff. From Wikipedia I learn that only the top 0.1% households have an income well in excess of a million dollars, 1.6 in fact, and that there are 115 million households in the US. So there would be approximately 115,000 households who could afford at least one servant at those salaries. This does not seem to be a very large market therefore. On the other hand, if there are 115,000 servants earning around $80,000 a year... that means that at every high school in the country there will be probably one parent who does that sort of work.

I don't see any reason not to be relativist about this. Economies and cultures change in concert with each other. Taking umbrage with this is like our ancestors taking umbrage with fertility treatments or mixing ethnicities or house-dads or birth control. We will do the future a favor if we don't burden it with our judgments. The 21st century will differ from the 20th century. There will be inevitable transitional frictions through the process. We shouldn't be adding to them.

If anybody disagrees with me, then you should make sure to review your weekly schedules and make sure they are kosher with your great-grandparents' notion of how to run your lives. I'm sure they would have been as offended at our lives as we will be about the things our grandchildren will consider normal.

The 20th century was a time when economic success was generally based on mass production. We will probably never have as much intra-national consumption equality as we have over the past century. So what. The future shouldn't be shackled by 20th century technological norms.

What do you mean: so what?

The "so what" here is that these developments have implications for people's welfare.

For some reason, this blog seems to attract people who enjoy crowing over other people's unhappiness.

Sometimes I get the sense that Tyler shares this character trait.

It's unclear to me why he's followed up the Great Stagnation with a book praising this brave new dystopian world.

Because nobody's going to pay you speaking fees to hear you tell them they're greedy, corrupt, treasonous scum.

I think we undestimate how much our moral intuitions are influenced by technological/cultural context. So, we mistake the aesthetic discomfort we have with household servants with an absolute moral position, much as our ancestors might have done with something like gay marriage.

"underestimate" and "for an absolute..."

Kebco, "Greatest good for the greatest number" seems like a reasonable moral precept and policy guide. So having the vast majority of citizens as servants to a tiny hereditary elite seems to fail that moral test.
But the bottom line, as so many commenters repeat is that no functioning democracy will permit a return to Downton Abbey levels of inequality, no matter what pink unicorn dreams of meritocracy libertarians spout. In the "Average Is Over" future, redistribution of the wealth created by automated production is the only reasonable choice for the great majority of the public, so either democracy is disabled, or social democracy of some kind is inevitable, no matter how many Mercatus Centers the Koch brothers choose to fund.
The issue is not the moral choice, but the political reality of democracy. There are many functioning successful examples of social democratic states (including Denmark officially the happiest nation), and exactly zero functioning examples of successful libertarian societies. Convincing people to vote for what has never been, and likely will never be, will fail when successful examples like Canada, Australia, Scandanavia are right next door.
The political conflict will be about the details of the public/private sector boundaries, but the libertarian "withering away of the state" is just a much an idle dream as was the Marxist worker's utopia.

I don't understand why being a servant for a rich man is any different to, say being staff in a restaurant that serves richer people, or making cars for richer people or even writing books or journalism for richer people. Its all about providing services. Perhaps the real beef here is that some people are richer than others. Certainly that is annoying for those who want to make their self worth reliant on their wealth. But actually that is a mugs games, unless you are really lucky, there is always some cohort better off than you.

Well, that is easy to answer. Being a personal servant very often precludes you from having a life on your own (been there done that). Even the sometimes generous salary does not necessarily compensate for the fact that it's very difficult to e.g. have children on your own. The demands on your time and your flexibility are much greater than in an ordinary job. It's a big difference providing services for many (where you're not dependant on the whims of any individual) as compared to providing services for one person.

Pete - what could be more unsociable than working in a restaurant, or a car factory night shift, or in the merchant marine? Or even farm laboring in the middle of no-where, with a very restrictive potential set of friends/potential mates.

In actual fact my maid works 8 to 2pm most days, much less than me. And she has more children than me.

It would be interesting to see the numbers. As I said I assume (based on my personal experience) that more often than not demand on time and for flexibility is much greater when working for one person instead of working for a company. (I also used to work on merchant ships and it felt very different than working on the yacht of someone rich and famous.) I reaaly would like to see some statistics about what those new jobs are like. Currently however, I don't really view them as a substitute for all the industrial jobs lost.

No need to worry about the high cost of Domestic Staff due to the lack of qualified applicants. Congress will simply extend the H-1B Visa program to include domestic servants. Problem solved and labour cost reduced!

+1 on this blog turning me into a socialist.

Or the rest of us could engage in "political negotiation" to capture some of the gains to AI, etc., which are being monopolized by those at the tip of the most recent innovations.

In todays New York Times, on the front page, is a story about human suffering - real, pain and agony - due to the failure of people to get healthcare.
And when I read something like this, I have just one question for ACA haters: what would you do , today, to help people ?
Do you not care ?
maybe ACA sucks; but people are getting help (although the point of hte story is that the refusal to accept medicaid expansion, which, contra the lies of GOP govenors, is not going to cost that much [ go ahead, google it - the nonfed part is about 5% on top of the projected expenditures])
and what would you people do, TODAY
that is TODAY
to help people who are sufferning ?????

and please, don't give me anything about gov't regs stifling the market, or how unleashing free enterprise will do something..people need help TODAY

and if you can't answer that, I think you don't deserve a place in the healthcare debate

This is the same species of idiocy as all those "if it would save one life..." gun control proposals. Suffering, like violence, is the natural human condition. It is amazing how much we have reduced it over the past 2000 years, but it will always be there. All the trillions spent on Medicare and Medicaid haven't abolished suffering, so why should we expect another trillion dollar a year government program to fix it? You think there aren't equivalent sob stories in Canada and the UK?

But why am I bothering attempting to reason with someone who declares any information he doesn't like "lies" and thinks that anyone who does not agree with his proposals doesn't "deserve a place in the debate." Hitleresque, IMO.

This place is called "marginal revolution." The question isn't whether anything negative is abolished completely. The marginal effects are what's important.

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