Monday, August 26, 2013

Automation and the middle class

So David Autor and David Dorn have a piece in The New York Times this weekend about how technology is destroying middle class jobs and “polarizing” the workforce into high-wage and low-wage occupations. We’re back to my society of nurses, cooks and engineers. Nothing we haven’t talked about before, but it’s good to see the discussion taken to a wider audience.:

So computerization is not reducing the quantity of jobs, but rather degrading the quality of jobs for a significant subset of workers. Demand for highly educated workers who excel in abstract tasks is robust, but the middle of the labor market, where the routine task-intensive jobs lie, is sagging. Workers without college education therefore concentrate in manual task-intensive jobs — like food services, cleaning and security — which are numerous but offer low wages, precarious job security and few prospects for upward mobility. This bifurcation of job opportunities has contributed to the historic rise in income inequality.

How Technology Wrecks the Middle Class

This ties in nicely with David Graeber’s essay about the rise of bullshit jobs. These “bullshit jobs” are one category of jobs that we seem to be creating in spades. While these “creative managerial” types are celebrated by economists, their salaries have to come from somewhere, and most of it comes from gouging the general public, especially the costs of college and healthcare, and to some extent certain government positions, particularly at the federal level. Most of these “creative managerial” tasks that Autor and others like him describe are total bullshit: moving money around, filing unnecessary paperwork, sitting through meetings, taking clients to sporting events, convincing people to buy stuff they don’t want or need, frauds and scams; things like that.

The other note is to highlight Matt Taibbi’s latest expose summarizing the college loan ripoff being perpetrated on theAmerican public. So while we claim that “professional and managerial” occupations are the wave of the future, we charge a king’s ransom to be part of this class. We claim that college is the new high school degree, but we turn people into debt serfs to get the “work chit” of a college degree. What sense does this make?

School, health care - it seems like in America every necessary institution in the running of a modern society is swiftly transformed into some sort of massive grift for the benefit of a few insiders while society decays around them. 

I doubt all this college has really made anyone smarter. In the past, people just read books and educated themselves. All it has led to is debt and grade inflation. Many people have noted that the average eighth grade textbook from a hundred years ago is as challenging as college material today.

Start funding college like high school (Salon)

21 statistics that will make you think twice about going to college

End U.S. Student Loans, Don’t Make Them Cheaper (Bloomberg):
The cause is more fundamental than the cycles of the economy: The country is turning out far more college graduates than jobs exist in the areas traditionally reserved for them: the managerial, technical and professional occupations.

The Bureau of Labor Statistics tells us that we now have 115,000 janitors, 83,000 bartenders, 323,000 restaurant servers, and 80,000 heavy-duty truck drivers with bachelor’s degrees -- a number exceeding that of uniformed personnel in the U.S. Army.
College Costs Surge 500% in U.S. Since 1985: Chart of the Day (Bloomberg)

Note also that productivity gains are being kept entirely by the ownership class with workers getting none of it as thisNaked Capitalism piece asserts. Again I ask –who are the real makers and who the real takers? This has little do with automation and more to do with a vast surplus of labor. The lump of labor fallacy is not a fallacy.

I’d also like to point out a simple logical fallacy in economic arguments. Economists always claim mass immigration does nothing bad to wages, because all of those immigrant workers are also consumers, so they expand the size of the overall economy, cancelling out any negative effects of labor surplus. However, economists insist that paying more wages to workers will ruin the economy, despite the fact that those same workers are also consumers. Somehow paying more in wages to people who actually work for a living won't expand the economy, unlike mass immigration. Hmmm.


  1. I really REALLY enjoy this blog. In many ways, it has helped to reshape my worldview. But I cannot help but call you out: starting a sentence with "So" is almost never OK, and yet it has become incredibly commonplace in spoken and written English, especially amongst intellectuals.

    1. True, I've gotten a little sloppy lately. But the nice thing about blogs is that it's a little less formal, so I write more conversationally than I normally would.

  2. That's another thing that impresses the hell out of me: your writing is damn near flawless. It's not just the ideas you convey, but also the quality manner in which you convey them. People think I nit-pick with this "So" business. Sorry - sincerely. Perhaps that's true. But it is like fingernails on a chalkboard to me. I cannot listen to anything on NPR any more; it has become an epidemic in places like that. (Don't get the wrong idea. I am not a Liberal. I simply like to tap in to various perspectives occasionally.) Back to "So"... if you catch it in your writing, try removing it and see if the meaning of the sentence is unchanged. It usually is. Once again, thanks for the blog.


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