A FAQ on tech, jobs, and wages
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Transcript of A FAQ on tech, jobs, and wages
What’s going on?
What’s going on? The polarization or “hollowing out” of the workforce
h6p://economics.mit.edu/files/11563
Autor, 2016
h6p://economics.mit.edu/files/11563
h6p://economics.mit.edu/files/11563
Autor, 2016
h6p://economics.mit.edu/files/11563
Autor, 2016
h6p://economics.mit.edu/files/11563
Autor, 2016
Is this a US-only phenomenon?
Is this a US-only phenomenon? No
Isn’t this mainly because of globalization / China?
Isn’t this mainly because of globalization / China? No
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US Manufacturing Value Added, 1955-‐2015
Manufacturing Value Added (old data series)
Manufacturing Value Added (new data series)
Source: Federal Reserve Bank of St. Louis, Bureau of Economic Analysis
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US Man
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US Manufacturing Employment vs. Value Added, 1955-‐2015
Manufacturing Value Added (old data series) Manufacturing Value Added (new data series)
US Manufacturing Employment (Thousands of Persons)
Source: Federal Reserve Bank of St. Louis, Bureau of Economic Analysis
So what is the cause?
So what is the cause? Automation of routine work
“The adopIon of computers subsItutes for… workers performing rouIne tasks—such as bookkeeping, clerical work, and repeIIve producIon and monitoring acIviIes—which are readily computerized because they follow precise, well-‐defined procedures.” -‐ Autor and Dorn, 2013
h6p://dspace.mit.edu/openaccess-‐disseminate/1721.1/82614
“We evaluate numerous alternaIve explanaIons for the pronounced differences in wage and employment polarizaWon… including deindustrializaIon, offshoring, … and growing low-‐skill immigraIon. None of these alternaIves appears central to our findings.” -‐ Autor and Dorn, 2013
h6p://dspace.mit.edu/openaccess-‐disseminate/1721.1/82614
Then why isn’t there mass unemployment?
Then why isn’t there mass unemployment? Economic growth + Labor force flexibility + + “downward mobility”
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US Real GDP per Capita and Employment, 1947-‐2015
Private Employment Index Real GDP per Capita Index
Sources: US Census Bureau, Bureau of Labor Sta@s@cs, Federal Reserve Bank of St. Louis.
h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
h6p://economics.mit.edu/files/11563
Autor, 2016
Employment moves from here…
… to here.
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US Real GDP per Capita, Employment and Median Family Income, 1947-‐2015
Private Employment Index
Median Family Income Index
Real GDP per Capita Index
Sources: US Census Bureau, Bureau of Labor Sta@s@cs, Federal Reserve Bank of St. Louis.
Then why isn’t there mass unemployment? Also, there is concentrated high unemployment
h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
What are the consequences?
What are the consequences? Hard to say, precisely. Here are a few other things that are going on… …
Mortality
h6p://www.hamiltonproject.org/blog/the_changing_landscape_of_american_life_expectancy
Mortality
h6p://www.hamiltonproject.org/blog/the_changing_landscape_of_american_life_expectancy
Social Decay
Charles Murray, Coming Apart
Social Decay
Charles Murray, Coming Apart
Social Decay
Charles Murray, Coming Apart
“The Politics of Resentment”
McAfee's caution: "If current trends continue, the people will rise up before the machines do."
“The Politics of Resentment”
Are things going to get better?
Are things going to get better? Two views here: 1) YES. We’re underestimating the power of capitalism. History will repeat itself. …
Are things going to get better? Two views here: 2) NO. We’re underestimating the power of modern technology. This time is different. …
What should we do?
What should we do? Depends on who you talk to.
Economists Technologists
PoliIcians Trade war
Income tax ↓
Minimum Wage ↑
Basic Income
EITC ↑
ImmigraWon↑
Ed. reform
Infrastructure↑
Reg. reform
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