What's the Latest Development?
A pair of MIT authors scheduled to publish a book extolling the virtues of technological progress have gone back to the drawing board. Presently, they are concerned that technological innovation is displacing the global labor market. "Unlike with previous technological revolutions, today, it is no longer primarily poorly trained and educated workers in less challenging jobs who are threatened, but also the broad middle range of the workforce, consisting of service providers and white-collar workers. Call-center staff are being replaced by telephone robots, paralegals by computer programs that can more quickly and effectively comb through documents, and tax advisers by more cost-effective software."
What's the Big Idea?
The 2000s were the first decade since the Great Depression to end with a net loss in jobs despite the fact that economic prosperity is one-third higher than it was 20 years ago. "According to the usually accepted rule of thumb, when the economy rapidly grows, unemployment should decline, often by 1 percent for every 3 percent increase in GDP. According to this formula, the US should have almost full employment by now. Instead, even before the financial crisis, no additional jobs were created, although productivity surged at the fastest pace since World War II." The traditional ties between economic activity and standard of living appear to be loosening.
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