As we move into the primaries stage of the 2012 campaign season, every politically conscious American is being bombarded with a constant stream of flashy declarations about job creation. Unfortunately, many of these seem only dubiously rooted in actual economics, and the prospect of electing technocratic leaders like Italy’s Mario Monti or Greece’s Lucas Papademos seem like a fantasy compared to the candidates we have before us.
This is bad news, considering the crisis we face. Until recently, the rate of new job creation was not even keeping up with population growth, much less re-employing the unfortunate people who lost their jobs during and after the recession. But even among think tanks and the punditry, short shrift has been given to one of the most important underlying reasons for unemployment after the Great Recession: technology.
In their excellent October 2011 e-book Race Against the Machine, a pair of MIT professors compellingly make the case that technological unemployment is a serious contributor to recessionary woes, and that the problem will only be exacerbated going forward.
Economic indicators like GDP growth and corporate profits are up following the recession, but unemployment remains high. The argument for the advent of the machines is an intuitive explanation for this phenomenon. Think about all the professions that have been automated in recent memory: airport receptionists are being replaced by kiosks, bank tellers by ATMs, supermarket cashiers by electronic pay stations, customer support by phone software, salesmen by online shopping and so on. The future might start looking more like the one we see in movies when Google finishes and markets its self-driving car, which received a patent in December. We might be looking at a whole lot of unemployed taxicab and truck drivers in a few years.
This kind of progress is great for society — these tasks become more efficient and make our lives easier. But not everyone benefits. This phenomenon has disproportionately impacted low-skilled workers, while capital owners have reaped the rewards. The median worker’s income continues to decrease, as it has over the past few years. Between 1983 and 2009, the top 20% of American households received over 100 percent of the total wealth increase in the US, and the remaining 80 percent saw a net decrease. This will continue as technology advances.
What does this mean for America? The Occupy movements may have largely packed up for the winter, but we can be sure they’ll be back in force in the spring if more Americans lose their jobs and lack safety net benefits, leading to increased social tension and strife. A poorer middle class likely means less use of preventative medicine, less nutritious food for families and kids, more homelessness, more crime, and more debt and use of credit to pay for necessities — potentially setting up the next crisis.
Yalies might be insulated from this for now, but even lawyers are starting to be replaced by cheaper and faster “e-discovery” document review programs. Either way, the point remains that things are not going to improve naturally, as part of a regular and predictable business cycle that just happens to be in a slump. Our country as a whole needs to have a serious, intellectual discussion about the evolving American social contract, and demand the same of its candidates.
We need to begin by recognizing that not everyone who relies on benefits is a drug-abusing, lazy welfare queen who came to this country illegally, a fact that I know has not completely permeated the Yale community. By and large, the people left behind now are those who lacked a sufficiently rigorous education to excel in skills such as management, analysis, or programming — in other words, they are those whose jobs can be automated.
To compensate for that, we need retraining programs that help workers gain relevant skills, as well as seriously revamped primary and secondary education systems to ensure the next generation has adequate knowledge to succeed in the globalized economy. So far, we’ve gotten a lot of talk about abolishing the Department of Education and a little bit of hazy talk about the nitty-gritty of the policies of tenure, merit pay, standardized tests, vouchers, student debt, and pretty much everything else we actually need to be discussing. Some of the candidates don’t even have a dedicated statement about their education positions on their websites.
Everyone knows we’re headed for a crisis, but its severity doesn’t seem to really have hit us. Maybe after a few million more lose their jobs and need to be pepper-sprayed as they riot across the country, it will be a tad bit clearer.
Michael Magdzik is a junior in Berkeley College. Contact him at firstname.lastname@example.org.