Social class is fossilized wealth. There are three economic classes in the USA.

  • If you do physical work then you belong to the the "working class", "lower class", "blue collar" or simply "labor".
  • If you do nonphysical work then you belong to the "middle class" or "white collar".
  • If other people work for you then you belong to the "upper class" or "bourgeoisie".

Labor

The working class lives in the physical world. Blue collar problems are physical problems like injury, health, violence and broken machines. At the bottom of the working class you find mindless labor like agricultural labor, food service, cashiers and—increasingly—warehouses. (Petty crime is underclass.)

College used to be a ticket out of the lower class. This path is increasingly difficult due to price increases, credential inflation and opaque acceptance criteria designed to keep the lower class in its place. The military does still function in its traditional role as a ticket into the middle class, but only if you get into the right specialties.

In the middle of the working class are the skilled trades. All the traditional handyman job live here: plumber, roofer, electrician, drywall repair. Among women you can find lots of nursing. Retail sales belongs here too as do police officers. Rare occupations include jugglers, clowns, close-up magicians and other small-scale entertainers. (Media-based entertainers belong to the middle class.) Psychics and priests serve the working class but are themselves middle class.

Attempting to break into the middle class can be risky due to the sticker price of college plus the lost wages. If you go into the military there's no guarantee they'll teach you anything useful. A more prudent goal may be to break into the skilled trades. Blue collar work doesn't require credentials the way white collar work does. If you can do something then employers will generally allow to do it. If you aren't allowed to do it then it's because there's a union rule or government regulation getting in you way. Your productivity is fundamentally limited by physical reality. No matter how good of a janitor you are, there is a physical limit to the number of rooms you can clean in a day.

The working class might go to trade school for a year or two but most of what you know you learned from friends, absorbed from family, taught yourself or—most likely—learned on the job. It's straightforward to learn things by doing them because the things you work with are physical and therefore intuitive. If you break into the skilled trades then you can expect to do the same thing for a long time.

Professional athletes are the pinnacle of the working class, but professional athletes are rare. Far more common are the petty bourgeoisie. The petty bourgeoisie consists of small business owner who work alongside their employees. Small business owners tend to be humble, wise and down-to-earth. If you can fully automate your business then you jump over the middle class all the way into the bourgeoisie.

White Collar

The middle class does intellectual labor. The problem with intellectual labor is it's hard to tell whether someone is doing it right. If there were clear criteria for success then the job would have been automated away by now. Moreover, if you knew what the right thing to do was then you wouldn't need to hire someone else to do it.

If it were possible to measure individual white collar workers' output then the middle class would resemble the working class. It even does in a handful of fields where individual performance can be measured: sales, contracting and startup entrepreneurship. These ruthlessly meritocratic fields tend to be dominated by confident people who speak clearly.

Alas, most of the middle class works for large corporations. When white collar workers collaborate in teams it is impossible to how how much each individual employee is worth. Middle class posturetalk is a byproduct of the constraint that it's hard to measure the productivity of individual white collar workers.

We have a phrase to describe what happens when rankings have to be created without any meaningful criteria. We say that the situation degenerates into a popularity contest.

Why Nerds are Unpopular by Paul Graham

Welcome to Dilbertland.

Generally-speaking, corporations cannot measure individual productivity. The result is a Market for Lemons where everyone is promoted to their level of incompetence. Corporations have a few methods of fighting back, all of them crude and imprecise:

  • Hiring based on IQ. Hiring directly based on IQ is illegal. However, your ability to solve abstract questions about computer algorithms depends on your IQ. If is legal to ask questions about computer algorithms if you are a hiring an engineer (even if that engineer never uses them on the job). [see comment]
  • Credentialing. It's hard to measure if someone is a good electrical engineer but it's easy to measure if someone has a degree in electrical engineering or used to work for Facebook. This also skews the IQ distribution in your favor.
  • Firing awful people.

Putting all of this together, you get a population of incompetent employees obsessed with credentials. They cannot be rewarded for exceptional productivity but they are punished for being unpopular. The result is painstakingly conformist population quick to signal allegiance to the winning side of every conflict, especially if it means punishing the outgroup (which reduces competition). When advantage shifts they jump ship. The middle class's opinions are painstakingly crafted to win a Keynesian beauty contest.

The Upper Class

It is a common middle class myth that you can work your way up the corporate ladder to the top. This is a deliberately-crafted illusion. No matter how long you work for Microsoft you will never save enough money to buy Microsoft. You don't get to the top of the class pyramid by working. You are rich when other people work for you.

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Hiring directly based on IQ is illegal.

This is not correct, in the U.S. states where I've practiced employment law.  Are you talking about a particular state?

If this is your interpretation of the US Supreme Court's decision in Griggs v. Duke Power Company, I would disagree.  

Nothing in the Act precludes the use of testing or measuring procedures; obviously they are useful. What Congress has forbidden is giving these devices and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance.

401 U.S. 424, 436 (1971).  What had happened was, Duke Power enjoyed its explicitly racially segregated work force and wanted to keep it, but the newish Title VII of the Civil Rights Act of 1964 said that was illegal, so Duke imposed an intelligence test on certain jobs it wanted to keep white but which didn't really require high intelligence-as-tested.  This had the effect of disproportionately excluding Black applicants, who apparently didn't do as well on the test for reasons that are not germane to the holding.  

Held: If a facially neutral job requirement has the effect of discriminating based on a protected category, the employer has to show that the requirement is "a reasonable measure of job performance"--with a strong undertone of "How stupid did you think we were?" from Chief Justice Burger, writing for a unanimous court.

I was not talking about a particular state. I was just wrong. Thank you for the correction. I have added a note to the original post.

I have often wondered why use of IQ in hiring isn't more common, so I just sorta believed it when you said it's illegal, even though I probably looked into it and figured out it wasn't on a previous occasion.

OTOH, businesses might be afraid of getting sued anyway, based on the supreme court case.

businesses might be afraid of getting sued anyway

This is the correct explanation of why nobody does this.  

Here is what I hope is a gears-y rundown from a lawyer.  I would appreciate feedback as I've been pondering a post or sequence in this vein (probably a different topic).

If a company client came to me and said, "I want to hire based on IQ; to hell with Duke Power," I would say, 

"We can make this happen in a legally defensible way.  It will slightly increase the likelihood that a plaintiff-side employment lawyer will take the case of a person who doesn't get hired, because of Duke Power and because IQ tests are so unusual in the hiring context.  That, in turn, increases the likelihood that we end up in front of a jury, which might as well be an RNG for our purposes. [Plaintiffs without lawyers almost never make it to a jury, and they are terrible when they do.]  You're raising your annual risk of a big jury verdict by maybe half a percent per year.

"First, I need you to pretend I never went to college, then explain to me (1) why IQ is a good hiring measure for this job.  Then, (2) why some other measure isn't better than IQ (a college degree in your field, for example; remember, I am an average American, I like to think that college degrees mean something).  Then, (3) how you arrived at the IQ cutoff you plan to use for this job.  

"Next, we need to hire a psychometrician who will write a report endorsing your views on items 1 through 3.  The report will also state that whatever discrimination is baked into IQ test results based on {race, gender, religion, ethnicity, national origin, age, disability status*, military service} won't have a disparate impact on people in those categories. This needs to be a real psychometrician, maybe somebody who works for schools or is a tenured professor, not somebody we found on Expert Witness Search dot com. The report will go in my file and yours.  It should be updated every year.  If you can't get this report, I advise you not to include IQ in your hiring rubric.

"Now.  Are you sure about your answer to number 2?

I would be looking for an explanation like, "We're basically DARPA, but with harder problems, for [say] rocketry.  Three-quarters of the postdocs we hire with Ph.Ds in actual rocketry wash out because our rocketry is so complex.  They stare at the differential equations for five minutes, then vomit.  But we did Career Day with a Mensa club and ended up hiring several middle schoolers, who tripled our effectiveness.  I cry myself to sleep every night thinking about how even a Ph.D in rocketry is not a good enough cutoff for our hiring decisions.  I have tried everything else and still can't get good people.  I dream of rockets, and all I want is to--to rocket them.  There's just something about rocketeering that requires a high IQ."

Is this more than "demonstrably a reasonable measure"? Maybe. But it's good to have some safety margin built in, with employment law as with boxing an Oracle AI.

Interesting(and funny!). I would appreciate more posts on this topic or other "gears-y rundown from a lawyer" type posts.

I have an impression that in the US, talking about IQ is coded politically Right. If a firm like Google tried to measure or proxy IQ in applicants, there would be a social backlash.

There are better-predicting measures available to the larger and more organized employers, which also happen to be more defensible because they're more directly job-related.  Many tests, online assessments, portfolio presentations, and interview results are correlated with IQ, but it's wrong to think they're a proxy for IQ.  IQ could be (in an alternate social acceptability world) a proxy for what employers really want.

Employers are looking for mental flexibility, reasoning power, and the like, but also conscientiousness and ability to actually do useful work rather than JUST being smart.  IQ is correlated with success for many things, but that doesn't make it the best measurement for most of them.

IIRC studies have found IQ is more strongly correlated with job performance than most other things people use. BUT there is one exception--tests that mirror the actual work. Which of course is more legally defensible, in addition to being a genuinely better measure. If I were hiring people, I would probably do interviews just to not seem weird to applicants, but all the real selection would be based on performance testing. 

mindless labor like farming

Consider being more specific, since produce-picking is arguably mindless labor but "farming" isn't necessarily. Farmers do things like deciding what to plant, knowing timings / how weather affects them, diagnosing and fixing problems, doing marketing and sales, and hiring and managing other people if the farm is big enough. In your hierarchy, I would put most farmers (as-in owner-operators of farms) somewhere between skilled labor and petit bourgeoisie.

Attempting to break into the middle class can be risky due to the sticker price of college plus the lost wages.

My experience has been that the myth of expensive college is a bigger problem than the actual cost of college. The difference between my yearly pre-college income and post-college income was enough to pay off my entire student loan the first year. Of course that depends on treating college like an investment (get the training and credentials you need at the lowest price) instead of following the bad "self-fulfillment" advice, but I think that's a different problem.

The problem with intellectual labor is it's hard to tell whether someone is doing it right. If there were clear criteria for success then the job would have been automated away by now.

This isn't necessarily true. You mention sales later, and I think that's a great example. I can trivially write a program that looks at your sales data and determines if the trend is positive, but I can't write a program that calls customers and convinces them to buy my product. The actual process and verification are frequently completely different processes.

Even with something much harder to verify like management, this still holds. It's true that it's hard for me to tell if someone is a good manager, but it's still much easier to check results (what does their team's turnover look like?) than to know exactly what steps they should follow to make that metric better.

Moreover, if you knew what the right thing to do was then you wouldn't need to hire someone else to do it.

I don't think this is true. It's common to know exactly what you want done but not have time to do it. For example, Sergei Brin knows how to program, but he still needed to hire thousands of additional software engineers.

When white collar workers collaborate in teams it is impossible to how how much each individual employee is worth.

It depends on how big the gap is, but I'd say this is difficult but not impossible.

Credentialing. It's hard to measure if someone is a good electrical engineer but it's easy to measure if someone has a degree in electrical engineering or used to work for Facebook.

For what it's worth, this is sort-of changing in the software field. It turns out credentials aren't good enough and it's more effective to directly measure how good someone is at writing software (either with tests or by looking at code samples). Unfortunately, most places seem to do this as a two-step gate (you need credentials and to pass the "can you do the job" test), but I think that's more of a path-dependence thing than direct usefulness (path dependent because historically the most competant people got software engineering degrees, so if you don't get one now it implies that you can't, even if in a world without that history, not having a software engineering degree wouldn't mean anything).

mindless labor like farming

Thanks for pointing out this error. I have replaced "farming" with "agricultural labor".

Great post! Love the point that "it is common middle class myth that you can work your way up the corporate ladder to the top". Seems it is a mindset problem with middle class there. It would be interesting to elaborate on the ways to change the mindset and jump out of the middle class trap.    

Ultimately, the only way out is to get rich. But there do exist books that can help point you in this direction. If you only had time to read one book I would recommend:

  • The 4-Hour Workweek by Tim Ferris

To stare deeper into the void you can add:

  • Heart of Darkness by Joseph Conrad
  • Nineteen Eighty-Four by George Orwell
  • anything written by Chuck Palahniuk

To assemble an entrepreneur mindset out of what's left of your mind you can read:

  • How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life by Scott Adams
  • Built, Not Born: A Self-Made Billionaire's No-Nonsense Guide for Entrepreneurs by Tom Golisano and Mike Wicks
  • Paul Graham's writings

Of course, it's not enough just to read books. Reading books and talking about books—without doing things—is a middle class behavior.

No one can tell you what the Matrix is. You have to see it for yourself.

Thanks Isusr for the book recommendations! Look like a great list, I've only seen Paul Graham's essays.  

I am have a pretty comfortable job and decent savings don't have to worry about living in a few years. I am thinking about creating my own business instead of working for other people, but haven't make the jump. I have a family and child, part of me worried they won't be taken good care of if I risk leaving my job and what if I didn't do well. I think this is the feeling for most middle class.

When middle class have some extra money like get promoted in the job, they tends to improve our life style, better car, bigger house etc. This turns back to increase the cost of living and more reliance on the job, and decrease the willingness to take risks. I am trying to be aware of this and not stretch the life style too much to have more savings and investments. Looking forward to find more insights from those books!

I would also add Naval Ravikant's tweetstorm on how to get rich as required reading for anyone aspiring towards the upper class.

What are the middle class? the 50%? 60%? In the first place, middle class is not well defined. Perhaps Orwellian middle class is neither middle nor classy. It just define middle class as the 18% of outer party, between 80% of Proletarian and the 2% of outer party. 

 

In term of wealth, guess which group is growing faster? The top 20% earners, defined by having more than $200,000 income. The middle class, in this case earning anything between $40,000 and $200,000, is shrinking fastest. If so, the definition will change "middle" class as the fastest growing demographic group.

 

The whole article perhaps has a fatalistic outlook, it is a we versus them analogy. Had not those entrepreneurs, working 60-70 hours per week, longer than most average person, is considered a working class as well?

 

And Microsoft did own by the public. The fact that Bill Gates doesn't own Microsoft, is a testimony of a Public Market. It is not called "Public Limited Company" for no reason. It is now majority owned by the public, whose face unknown and many.

Yeah, I believe the army checks IQ, and the whole IQ problem, where people with low intelligence can't perform certain jobs, it's sad.  That's probably why I'm stuck running my company Drywall Repair Columbia.  It's just too bad that IQ can't really be improved per se, maybe we'll find a way to fix that in the future, who knows.