Download - A FAQ on tech, jobs, and wages
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What’s going on?
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What’s going on? The polarization or “hollowing out” of the workforce
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h6p://economics.mit.edu/files/11563
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Autor, 2016
h6p://economics.mit.edu/files/11563
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h6p://economics.mit.edu/files/11563
Autor, 2016
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h6p://economics.mit.edu/files/11563
Autor, 2016
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h6p://economics.mit.edu/files/11563
Autor, 2016
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Is this a US-only phenomenon?
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Is this a US-only phenomenon? No
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Isn’t this mainly because of globalization / China?
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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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1955 1963 1971 1979 1987 1995 2003 2011
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
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So what is the cause?
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So what is the cause? Automation of routine work
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“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
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“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
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Then why isn’t there mass unemployment?
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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.
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h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
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h6p://economics.mit.edu/files/11563
Autor, 2016
Employment moves from here…
… to here.
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0
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100
150
200
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1947 1951 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015
1947 = 100
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.
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Then why isn’t there mass unemployment? Also, there is concentrated high unemployment
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h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
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h6ps://www.whitehouse.gov/sites/default/files/page/files/20160620_cea_primeage_male_lfp.pdf
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What are the consequences?
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What are the consequences? Hard to say, precisely. Here are a few other things that are going on… …
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Mortality
h6p://www.hamiltonproject.org/blog/the_changing_landscape_of_american_life_expectancy
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Mortality
h6p://www.hamiltonproject.org/blog/the_changing_landscape_of_american_life_expectancy
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Social Decay
Charles Murray, Coming Apart
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Social Decay
Charles Murray, Coming Apart
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Social Decay
Charles Murray, Coming Apart
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“The Politics of Resentment”
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McAfee's caution: "If current trends continue, the people will rise up before the machines do."
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“The Politics of Resentment”
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Are things going to get better?
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Are things going to get better? Two views here: 1) YES. We’re underestimating the power of capitalism. History will repeat itself. …
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Are things going to get better? Two views here: 2) NO. We’re underestimating the power of modern technology. This time is different. …
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What should we do?
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What should we do? Depends on who you talk to.
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Economists Technologists
PoliIcians Trade war
Income tax ↓
Minimum Wage ↑
Basic Income
EITC ↑
ImmigraWon↑
Ed. reform
Infrastructure↑
Reg. reform