Economics

‘Atlanta’ Shows Why the Black Working Class Is in Trouble

Brains and talent are no match for the demise of factory work, and racism makes it worse. 

Old story in the New South.

Photographer: Marcus Ingram/WireImage/Getty Images

In my opinion, the best TV show so far in 2018 is “Atlanta.” Created by multimedia star Donald Glover, who also acts as the show’s protagonist, “Atlanta” defies genre categorization, seamlessly blending comedy, drama, social commentary and even horror. The directing, acting and writing are all as good as any show I’ve ever seen.

But if you’re an economics nerd, there’s another reason to watch “Atlanta,” because the show is all about economics. The plot centers around Earn, a young college dropout trying to manage the budding rap career of his cousin Alfred. In almost every episode, Earn, Alfred and their friends are confronted with the economic challenges facing poor black Americans.

As a city, Atlanta is a thriving, growing metropolis, with a flourishing black middle class and a relatively high concentration of talent and capital. But the characters of “Atlanta,” despite being smart and talented, are not part of that middle class. It’s an illustration of the broken pipeline of the American economy, where talent is too often overlooked and squandered by the system.

Earn himself is an example -- though he briefly went to Princeton, he’s now homeless, sleeping on friends’ couches or with his girlfriend as he uses all his earnings to support his young daughter’s education. But it’s Alfred who most vividly illustrates the tragedy of deindustrialization. Alfred is a blue-collar, working-class everyman -- the type of guy who in an earlier era, if he had been lucky enough to avoid racial discrimination, would have made a good living as a worker at an auto plant or a steel mill. But in the modern American economy, those jobs are rapidly becoming a thing of the past:

The Factory Floor Gets Smaller

Total manufacturing jobs

Source: Federal Reserve Bank of St. Louis

Alfred makes his money as a drug dealer and aspires to become a famous rapper. But he doesn’t do this out of greed or driving ambition -- his main desire is to sit on the couch, live a middle class life and remain a member of the community. He operates on the margin because there really isn’t any other reliable route to middle-class security, and he tries his luck in the winner-take-all music business because there are no other clear options for upward mobility.

Too many Americans are stuck in Alfred’s situation. Many live in sprawling suburbs with poor public transportation, far from the service jobs that have replaced manufacturing. Because of housing development restrictions in city centers and high transit construction costs, it’s very hard for many working-class people to get to where the jobs are. For black Americans, who suffer from widespread racial segregation and job discrimination, the problem is often much worse.

With inefficient suburban sprawl stranding a working class hit hard by deindustrialization, it’s little surprise that the country’s labor force participation has fallen. For a long time, black Americans were doing worse in this regard, but other Americans’ participation has fallen so much that the averages have almost converged:

Many of the people left behind by the structure of the modern American economy will naturally turn to the crime and the informal labor force -- drug sales, prostitution and housework. Of course, that market brings its own risks and costs.

Poverty and economic insecurity bring a host of other economic problems. A major one is transaction costs. When Earn tries to pay for things with $100 bills (being, as he is, one of the unbanked), he is denied, and is forced to pay a 20 percent fee to get smaller change. Homelessness requires him to spend lots of time just finding a place to sleep. The legal system adds plenty of transaction costs -- Earn is on parole for a marijuana-possession conviction, and Alfred is temporarily under house arrest for unspecified reasons. Additionally, with little money to pay for lawyers, and without legal enforcement in the gray market, Earn and his friends must often rely on informal arrangements that economists call implicit contracts. Enforcement of implicit contracts -- for example when Alfred is forced to punch an event promoter who tries to cheat him -- carries its own costs and risks.

In addition to transaction costs, Earn has to deal with liquidity constraints. Living constantly on the edge of bankruptcy, he has little ability to borrow in case of a run of bad luck. This is especially bad because Earn and his friends deal with lots of risks that wealthier and/or white Americans often avoid such as muggings and police persecution. That risk causes stress, which the characters -- like a significant percentage of Americans -- deal with by smoking marijuana. But that creates new risks -- Earn is arrested for possession, and his girlfriend Vanessa loses her job after failing a drug test.

In other words, “Atlanta is a microcosm of all the problems of poverty and instability in America that writers like Barbara Ehrenreich, economists like Sendhil Mullainathan, and sociologists like Sudhir Venkatesh have been sounding the alarm about for many years. A toxic combination of deindustrialization, poor urban planning, racial segregation, discrimination and the insanity of the war on drugs wastes the talent and potential of much of the country’s working class -- especially the black working class. Even as cities like Atlanta grab headlines for their wealth, exciting nightlife and ample job opportunities for educated workers, millions of Americans are being left behind. They’re trying hard, and doing the best they can, but the system is failing them.

“Atlanta” is more about painting a picture of a world, rather than dishing out policy prescriptions. But it’s not hard to imagine some concrete steps that would relieve some of the pressure on real-life Americans who face similar challenges. Legalization of marijuana, a stronger social safety net, greater urban density and better transit, and stepped-up efforts to fight racial segregation should be at the top of the list.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Noah Smith at nsmith150@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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