Good heavens! I thought I was going to be shocked by a HuffPo writer, but, they rarely fail to disappoint. I was intrigued by the headline……
I mean, sure, they’re right, Krugman is wrong, but they don’t know why. It starts with Krugman’s post…..
His title was appropriate. You can read his opening. I won’t rehash the history of the Luddites. But, Krugman states this…..
But this, the story went, was because modern technology was raising the demand for highly educated workers while reducing the demand for less educated workers. And the solution was more education. ……
Today, however, a much darker picture of the effects of technology on labor is emerging. In this picture, highly educated workers are as likely as less educated workers to find themselves displaced and devalued, and pushing for more education may create as many problems as it solves.
I’ve noted before that the nature of rising inequality in America changed around 2000. Until then, it was all about worker versus worker; the distribution of income between labor and capital — between wages and profits, if you like — had been stable for decades. Since then, however, labor’s share of the pie has fallen sharply.
Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).
So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.
I can already hear conservatives shouting about the evils of “redistribution.” But what, exactly, would they propose instead?
Glad you asked Paul, I’ll get to that in a minute.
Of course, some of what Krugman is saying is anathema to progressives. What? Education isn’t the answer? So, some decided to respond to Krugman, which you can read in the first link I posted……
It seemed one of our premier economic thinkers was throwing in the towel on the U.S. economy.
Krugman blamed technology for exacerbating inequality before dismissing the commonly espoused remedy — more education — as a false god.
So, the author seeks out other economist to argue Krugman’s thoughts…..
“Is education an individually sound investment? Yes, absolutely,” said David Autor of the Massachusetts Institute of Technology, via e-mail. “Would getting more Americans through college decrease inequality? Certainly. Is education an omnibus solution to U.S. inequality? Definitely not. But that’s not an argument against education!”
Conversely, here’s another response he got…….
Jeff Madrick, a senior fellow at the Roosevelt Institute, isn’t so sure. Increased supply inevitably devalues a college education, he said. “You know what would happen if we had more college grads,” he said, “they’d be making less.” But Madrick also touts a laundry list of other policies to battle inequality — a minimum-wage hike, unionization, aggressive fiscal policy and revisiting trade policies that he thinks have stranded too many workers.
And, of course, the author finishes with this……
Yet even if you agree with such prescriptions, politics has rendered them moot; Republicans oppose them all. …..blah, blah, blah……
Fascinating. They all see a problem, and almost get some of it correct. Is there a declining middle class? Yes, this is unarguable, and tragic. Krugman is also correct in so far as the solution isn’t education. I’ve argued this many times. Yes, we do need an educated public. But, no, we don’t need to spend a fortune and train someone with a masters degree to flip burgers or push a broom. Not everyone needs a degree, nor is it achievable without degrading the value of a degree so much as that it is meaningless.
It doesn’t matter how many ways one wishes to look at it, some people are simply not capable of complex thoughts.
Over half of our population now goes on to some college at least for some time. That’s insane! Look at the graphic! We are literally sending near morons to college! It makes absolutely no sense to do so. Look at the graphic. We shouldn’t send anymore than a 1/3 of the population to advanced education.
Let me too, just devote a small amount of time to the notion that automation requires people with degrees. ……… It does to build the things, but, as the word implies, it makes things easier and simpler to do. Yes, this also means the requirements for the amount of workers decrease, but, it in no way implies you need to be smarter to make things go. And, in the end, you still need people to run things. George Jetson’s, if people can understand the analogy.
So, what’s the solution? Well, one is, obviously, we need to be engaged in many more things. Because it takes less workers to do things because of technology, we need to be doing more things. Where are the Levi plants? Well, there’s not a damned on in the US. HP doesn’t build their computers in the US anymore, either. We can go all day listing the various industries we’ve off-shored. If we quit finding ways to move our jobs off shore, then much of the problems go away.
But, then, none of the idiots mentioned above addressed the real problem. OUR LABOR POOL IS TOO LARGE!!!!! Want to know why people without college degrees can’t make a decent living? Because the supply of laborers has exceeded the demand. It’s just that simple. Think we still don’t need construction laborers? Of course we do. And, we still have them. The only problem is, there’s an endless supply of cheap, uneducated workers to the south of us. And, for the cheap educated workers, we import an endless supply from Asia and other places. It isn’t that Americans can’t do the work, it is they can’t do the work and get paid for it. Care to guess where and why the income inequality is occurring? It’s only a mystery to the people who don’t compete with this annual huge influx of workers.
I used to work in bridge construction. They didn’t automate my job away. I just couldn’t outwork 3 illegals. I used to work in a production plant. While we automated some, that job didn’t go away because of automation, that job went away because the labor pool was so large it didn’t pay good enough to feed the family. I used to work for a software company. But, year after year, more and more people in the company and other companies I dealt with were people who couldn’t speak English. The pay they demanded was significantly less than what people in the industry was working for. But, my story isn’t unique. It has happened and is happening all across this nation.
The problem isn’t, nor was it ever, technology. Nor, is the solution to have every Tom, Dick, and Jane running around with a masters degree. All of that is pure unadulterated sophistry.
Here’s an idea. Instead of encouraging and even paying for immigrant workers, both legal and illegal, and instead of paying to educate near morons, let’s take some of that money and incentivize hiring American workers. Secure our borders, in order to make an orderly and focused import of talent. Quit allowing companies to import millions of supposed tech workers simply because they are cheap labor, locked into working for the sponsor company. This would increase demand for American workers, which would reduce unemployment and raise the wages of the average worker. See, you don’t have to raise a minimum wage by law, you can do it simply by decreasing the supply of the labor pool. Dumbasses.