It is a truth universally acknowledged that education is the key to economic success. Everyone knows that the jobs of the future will require ever higher levels of skill. That’s why, in an appearance Friday with former Florida Gov. Jeb Bush, President Obama declared that “If we want more good news on the jobs front then we’ve got to make more investments in education.”Read the whole article.
But what everyone knows is wrong.
The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the kinds of jobs we count on to support a strong middle class — have lagged behind. And the hole in the middle has been getting wider: many of the high-wage occupations that grew rapidly in the 1990s have seen much slower growth recently, even as growth in low-wage employment has accelerated.
Why is this happening? The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there aren’t many assembly-line jobs left to lose. Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
The reality is that most jobs are subject to replacement by computer. In the short term it is the repetitive jobs, as Krugman points out, whether they be blue collar or white collar. There is no place for a diploma-wielding person to hide. The machines are coming to replace you.
Back in the 1960s this was a scary message, but a lot of the fear was couched in "what are people going to do with so much more free time?" The assumption was that the society as a whole would carry everybody and salaries would rise and we would all live happier more stuff-filled lives because the machines were going to take over and produce the goodies.
But since the "Reagan revolution" all those extra goodies being produced have been monopolized by the ultra-rich to help them to go from fabulously wealth to mind-blowingly, insanely wealthy. Instead of 100 foot yachts, they now have to make do with 500 foot yachts. Instead of a main home and one or two vacation homes, they own five, six, or a dozen. Meanwhile unemployment is at record highs, poverty at a record high, and the average was is stuck. This isn't caused by machines. This is caused by a social system where the ultra-rich have a strangle-hold on all increments to productivity. As machines make us more productivity, the ultra-rich skim off the benefits for themselves!
Here's Krugman's bottom line:
But there are things education can’t do. In particular, the notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that having a college degree guarantees that you’ll get a good job, and it’s becoming less true with each passing decade.
So if we want a society of broadly shared prosperity, education isn’t the answer — we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.