low skilled workers

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pages: 482 words: 117,962

Exceptional People: How Migration Shaped Our World and Will Define Our Future by Ian Goldin, Geoffrey Cameron, Meera Balarajan

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Admiral Zheng, agricultural Revolution, barriers to entry, Berlin Wall, Branko Milanovic, British Empire, conceptual framework, creative destruction, demographic transition, Deng Xiaoping, endogenous growth, failed state, Fall of the Berlin Wall, Gini coefficient, global supply chain, guest worker program, illegal immigration, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), job automation, Joseph Schumpeter, knowledge economy, labor-force participation, labour mobility, Lao Tzu, life extension, low skilled workers, low-wage service sector, Malacca Straits, mass immigration, microcredit, Network effects, new economy, New Urbanism, old age dependency ratio, open borders, out of africa, price mechanism, purchasing power parity, Richard Florida, selection bias, Silicon Valley, Silicon Valley startup, Skype, spice trade, trade route, transaction costs, transatlantic slave trade, transatlantic slave trade, women in the workforce, working-age population

About 80 percent of these migrants are employed on fruit, vegetable, and tobacco farms in Ontario, where the average stay is four months.37 Farmers have to offer at least 240 hours of work over six weeks and provide free health insurance, housing and meals or cooking facilities, and a fair wage. Canada's seasonal worker scheme has been held up as a model for other countries, despite criticisms from organized labor and human rights groups for the restrictions it places on migrants.38 The implementation of programs designed to attract temporary low-skill workers has been slow in many developed countries because of the expectation that migrants arriving through other channels will take on less desirable jobs. For instance, in North America and France, many low-skill jobs are done by migrants who have arrived through refugee resettlement or family migration channels.39 In Europe, high-income countries currently meet their demands for low-skill labor through visa-free migration from Eastern Europe. As a result, many European countries have been hesitant to introduce low-skilled migration programs.40 Furthermore, in the post-2008 recession, countries that use temporary migration programs—like Spain and Italy—have curtailed them and encouraged visa-holders to return home.

As such, the extended nature of many high-skill migration programs distinguishes them from low-skill programs, which explicitly aim to prevent any adjustment to permanent status. Low-Skilled Migration As the workforces of developed countries have become more highly educated, the unmet demands of agricultural, manufacturing, and service sectors have led states to open migration channels for foreign low-skilled workers. Recruiting low-skilled workers on short-term or seasonal contracts carries the risk of unintentionally generating a stream of permanent migrants (such as that which resulted from post-WWII “temporary” guest-worker programs in Europe).25 Managing temporary programs, therefore, involves extensive state intervention, cooperation with employers, and the use of incentives and penalties to induce the return of low-skilled migrants.

There is general agreement that the world is about to enter a new stage in international labour migration, with more labour migration sources and destinations and migrants employed in a wider range of industries and occupations.32 New temporary worker programs involve stringent admission procedures, employer incentives and sanctions, and high levels of government regulation. Entry is usually contingent on a job offer, and there are limits on access to public services.33 The number of temporary low-skill workers admitted into OECD countries rose every year between 2000 and 2008.34 In 2005-2006, Australia, Canada, the United States, and New Zealand accepted 1.24 million temporary migrant workers.35 The 2008-2009 recession undercut the demand for low-skill workers and prompted discussion of new protectionist measures and limits on migration in many countries, including the United States, Italy, the United Kingdom, and Spain. Seasonal workers on farms constitute the largest category of temporary workers in OECD countries.36 Under the Commonwealth Caribbean and Mexican Seasonal Agricultural Workers Program, Canadian farmers hire foreign workers for up to eight months a year.


pages: 399 words: 116,828

When Work Disappears: The World of the New Urban Poor by William Julius Wilson

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affirmative action, citizen journalism, collective bargaining, conceptual framework, declining real wages, deindustrialization, deliberate practice, desegregation, Donald Trump, edge city, ending welfare as we know it, fixed income, full employment, George Gilder, ghettoisation, glass ceiling, Gunnar Myrdal, income inequality, informal economy, jobless men, labor-force participation, labour market flexibility, low skilled workers, low-wage service sector, manufacturing employment, mass immigration, new economy, New Urbanism, pink-collar, race to the bottom, RAND corporation, school choice, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, upwardly mobile, urban decay, urban renewal, War on Poverty, working poor, working-age population, Works Progress Administration

People were poor, but they were still working. Ghetto neighborhoods were as highly segregated as they are now, but people were working. The disappearance of work in many inner-city neighborhoods is in part related to the nationwide decline in the fortunes of low-skilled workers. Fundamental structural changes in the new global economy, including changes in the distribution of jobs and in the level of education required to obtain employment, resulted in the simultaneous occurrence of increasing joblessness and declining real wages for low-skilled workers. The decline of the mass production system, the decreasing availability of lower-skilled blue-collar jobs, and the growing importance of training and education in the higher-growth industries adversely affected the employment rates and earnings of low-skilled black workers, many of whom are concentrated in inner-city ghettos.

As much of the foregoing economic analysis suggests, however, the central problem facing inner-city workers is not improving the flow of information about the availability of jobs, or getting to where the jobs are, or becoming job-ready. The central problem is that the demand for labor has shifted away from low-skilled workers because of structural changes in the economy. During certain periods, this problem can be offset to some extent by appropriate macroeconomic levers that can act to enhance economic growth and reduce unemployment, including fiscal policies that regulate government spending and taxation and monetary policies that influence interest rates and control the money supply. But given the fundamental structural decline in the demand for low-skilled workers, such policies will have their greatest impact in the higher-wage sectors of the economy. Many low-wage workers, especially those in high-jobless inner-city neighborhoods who are not in or have dropped out of the labor force and who also face the problem of negative employer attitudes, will not experience any improvement in their job prospects because of fiscal or monetary policies.

Many low-wage workers, especially those in high-jobless inner-city neighborhoods who are not in or have dropped out of the labor force and who also face the problem of negative employer attitudes, will not experience any improvement in their job prospects because of fiscal or monetary policies. Despite some claims that low-skilled workers fail to take advantage of labor-market opportunities, available evidence strongly suggests not only that the jobs for such workers carry lower real wages and fewer benefits than did comparable jobs in the early 1970s, but that it is harder for certain low-skilled workers, especially low-skilled males who are not being absorbed into the expanding service sector (see Chapter 2), to find employment today. As the economists Sheldon Danziger and Peter Gottschalk put it: In our view, the problem is not that more people have chosen not to work, but rather that demand by employers for less-skilled workers, even those who are willing to work at low wages, has declined.


pages: 209 words: 80,086

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

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active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, labour market flexibility, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

The numbers of high-skill, high-wage workers could dramatically increase by outsmarting workers from other nations, leading domestic and foreign companies to expand their high-value, knowledge-intensive activities in America, given the superior productivity that smarter employees can create. As a consequence, there was no need to unduly mourn the loss of low-skill manufacturing jobs to Asia, South America, or Eastern Europe despite the short-term problems it caused for displaced workers. Better-quality jobs were being created to replace them, although there was bound to be a period of adjustment as workers retrained for more skilled positions. The idea of a magnet economy recognized a global auction for jobs, but this was limited to low-skill jobs auctioned on price, resulting in manufacturing jobs migrating to low-wage economies in Asia, South America, or Eastern Europe. There was little understanding that price competition could ultimately reduce the bargaining power of America’s professional and managerial workers.

Nation-states were seen as largely powerless to protect domestic markets from international competition. Routine 20 The Global Auction production could be fulfilled in low-wage countries for a fraction of the cost of operating plants in North America or Western Europe. Gone were the days when national champions, such as Ford in America, ICI in Britain, and Siemens in Germany, offered high wages to low-skill workers as they did after World War II. These companies had little choice other than to exploit the global market for labor if they were to remain competitive. Accordingly, there are no American, British, or German jobs, only American, British, or German workers who must confront the ultimate judgment of the global market. Although this presented a challenge to workers in affluent economies, the global job market also offered an unprecedented opportunity for America to become a magnet economy, attracting a disproportionate share of the global supply of high-skill, high-wage jobs.18 If there was a global job market, the numbers of managers, designers, engineers, lawyers, and consultants in the American workforce could be rapidly expanded because they could be employed to service the global economy rather than be restricted to the requirements of the domestic economy.

It was judged that Taylor’s principles were an abuse of the welfare of workers, and the principles were banned on all government-funded work until 1949. Yet it was the rise of mass assembly-line production associated with the name of Henry Ford that ensured Taylor his place in economic history. Ford drew on a range of innovations that were prevalent at the time, although he denied that scientific management had influenced the creation of the moving assembly line that employed mass ranks of low-skill workers responsible for carrying out the same monotonous tasks. Craft skills were broken down into their most rudimentary form, reduced to a series of simple repetitive operations of the order of punching a hole in metal plates thousands of times a day without moving from the machine. In the case of General Motors’ Vega, two young women jumped on and off the assembly line and slid grilles behind the headlights; this was one of the more active roles available.

Social Capital and Civil Society by Francis Fukuyama

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Berlin Wall, blue-collar work, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, George Akerlof, German hyperinflation, Jane Jacobs, Joseph Schumpeter, Kevin Kelly, labor-force participation, low skilled workers, p-value, Pareto efficiency, postindustrial economy, principal–agent problem, RAND corporation, Silicon Valley, The Death and Life of Great American Cities, transaction costs, World Values Survey

The disappearance of high-wage low-skill jobs in sectors like automobiles, steel, meatpacking, and the like is a universal problem for all industrialized countries. This job loss is what accounts for continuing high rates of unemployment in Europe and for falling real working-class wages in the United 25 This speech was reprinted as “Welfare Reform and Character Development,” City Journal 5, no. 1 (Winter 1995): 56-69. [FUKUYAMA] Social Capital 479 States. It is a problem that is bound to become more severe as the Third World develops and more low-skill workers enter the global labor market. It is, as the account of the Great Disruption above indicates, also one of the sources of family breakdown and the various pathologies accompanying the shift in gender roles. Those low-skill workers most severely affected are males rather than females.

There are currently some forty federal and countless state worker retraining programs, the first of which consume some $25 billion of the federal budget every year, and they are as a group generally recognized to be abysmal failures. 26 26 For an overview of vocational and job-training programs, see Derek Bok, T h e State of the Nation: Government and the Quest for a Better Society (Cambridge, Mass.: Harvard University Press, 1997). 480 Tanner Lectures on Human Values The American system of vocational education is very weak compared to that of central Europe; for the most part, low-skill workers are simply left to fend for themselves in acquiring the skills needed to remain employed. Adding urgency to the worker retraining issue is the shifting age composition of all OECD countries. Owing to steady drops in fertility almost all OECD countries will be losing population at a dramatic rate by the middle of the twenty-first century. Using the low-growth fertility assumptions of the U.N.

Management through a hierarchy usually entails the creation of a system of formal rules and standard operating procedures -the essence of Weberian bureaucracy. Formal rules become problematic when decisions have to be made on the basis of information that is complex or hard to measure and evaluate. In labor markets, advertising and listings of formal job requirements are used to match supply and demand for simple, low-skill jobs; 14 informal networks take over when universities or 13 Ludwig Von Mises, Socialism: A n Economic and Sociological Analysis (Indianapolis, Ind.: Liberty Classics, 1981); Friedrich A. Hayek, “The Use of Knowledge in Society,” American Economic Review 35 (1945): 519-30. 14 See, for example, Kenneth J. Arrow, “Classificatory Notes on the Production of Transmission of Technological Knowledge,” American Economic Review 59 (1969): 29-33.


pages: 165 words: 45,129

The Economics of Inequality by Thomas Piketty, Arthur Goldhammer

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affirmative action, basic income, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, conceptual framework, deindustrialization, endogenous growth, Gini coefficient, income inequality, low skilled workers, means of production, moral hazard, Pareto efficiency, purchasing power parity, Simon Kuznets, The Bell Curve by Richard Herrnstein and Charles Murray, very high income, working-age population

Again, empirical studies confirm the existence of such substitutability: demand for low-skilled labor decreases relative to demand for skilled labor when its relative cost rises, and vice versa. All available econometric studies show that the elasticities in question are systematically higher than the elasticity of capital/labor substitution (Krussel et al., 1996; Hamermesh, 1986) (compare Chapter 2), and these findings are confirmed by historical work on major structural shifts in employment in various countries and periods. It is easier to replace low-skilled workers with machinery or skilled workers than to do without skilled workers. However, the superiority of fiscal transfers and allocation by price is no more readily accepted in regard to wage redistribution than in regard to capital/labor redistribution. The left remains skeptical about reducing employer-paid social charges on low-wage workers. The idea that the payment of unequal wages—possibly quite unequal wages—to different categories of workers might play a useful allocative role is hard to accept, as is the idea that wages should therefore be allowed to adjust freely, while using taxes and transfers to correct the resulting unjust distribution of income.

The government might reach such a decision because it believes that this is the only way to preserve the incentives needed to encourage the manager to acquire the necessary skills. If a union disagrees because it thinks that the employee should earn €1,525 a month and the manager only €3,810, then the only way to proceed is to attempt to forcibly impose a new wage schedule on employers. Of course, it would be better to increase the manager’s tax by €760 a month and use the proceeds to make a fiscal transfer of €760 to the low-skilled worker. That way, the firm would not have to pay more to its workers and less to its managers, which would inevitably lead to hiring fewer workers and more managers and thus to an increase in unemployment. But unions do not have the power to levy taxes and make transfers. Historically, the role of unions has been to intervene in conflicts of this type: when the state fails to play the redistributive role that the unions believe it should play, they step in and use the resources at their disposal: direct redistribution through struggle in the workplace.

If there is substantial elasticity of substitution between different types of labor (defined in the same way we defined elasticity of capital/labor substitution in Chapter 2), however, fiscal redistribution is strictly superior: it allows increasing the income of relatively unskilled workers by the same proportion as direct redistribution but without increasing the cost of low-skilled labor to the firm and thus without decreasing the number of low-skilled jobs. Once again, the superiority of fiscal redistribution comes from the fact that, unlike direct redistribution, it severs the connection between the price paid by the firm and the price received by the worker. This argument is quite general and does not apply only to redistribution between workers of different skill levels. For example, a system of family allocations financed by a deduction from workers’ paychecks would make it possible to redistribute wages to workers with children without increasing their cost to firms, in contrast to a direct distribution asking employers to pay a higher wage to workers with children than to those without.


pages: 72 words: 21,361

Race Against the Machine: How the Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy by Erik Brynjolfsson

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Amazon Mechanical Turk, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, business process, call centre, combinatorial explosion, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, easy for humans, difficult for computers, Erik Brynjolfsson, factory automation, first square of the chessboard, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, hiring and firing, income inequality, intangible asset, job automation, John Markoff, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Khan Academy, Kickstarter, knowledge worker, labour mobility, Loebner Prize, low skilled workers, minimum wage unemployment, patent troll, pattern recognition, Paul Samuelson, Ray Kurzweil, rising living standards, Robert Gordon, self-driving car, shareholder value, Skype, too big to fail, Turing test, Tyler Cowen: Great Stagnation, Watson beat the top human players on Jeopardy!, wealth creators, winner-take-all economy, zero-sum game

Finally, when technology leads to relatively sudden shifts in income between groups, it may also dampen overall economic growth and potentially precipitate the kind of collapse in aggregate demand reflected in the current slump. Consider each of the three sets of winners and losers discussed earlier. When SBTC increases the incomes of high-skill workers and decreases the incomes and employment of low-skill workers, the net effect may be a fall in overall demand. High-skill workers, given extra income, may choose to increase their leisure and savings rather than work extra hours. Meanwhile, low-skill workers lose their jobs, go on disability, or otherwise drop out of the labor force. Both groups work less than before, so overall output falls.5 One can tell a similar story for how super-wealthy superstars, given additional wealth, choose to save most of it while their less-than-stellar competitors have to cut back consumption.

Ever-falling wages for significant shares of the workforce is not exactly an appealing solution to the threat of technological employment. Aside from the damage it does to the living standards of the affected workers, lower pay only postpones the day of reckoning. Moore’s Law is not a one-time blip but an accelerating exponential trend. The threat of technological unemployment is real. To understand this threat, we'll define three overlapping sets of winners and losers that technical change creates: (1) high-skilled vs. low-skilled workers, (2) superstars vs. everyone else, and (3) capital vs. labor. Each set has well-documented facts and compelling links to digital technology. What’s more, these sets are not mutually exclusive. In fact, the winners in one set are more likely to be winners in the other two sets as well, which concentrates the consequences. In each case, economic theory is clear. Even when technological progress increases productivity and overall wealth, it can also affect the division of rewards, potentially making some people worse off than they were before the innovation.

In a growing economy, the gains to the winners may be larger than the losses of those who are hurt, but this is a small consolation to those who come out on the short end of the bargain. Ultimately, the effects of technology are an empirical question—one that is best settled by looking at the data. For all three sets of winners and losers, the news is troubling. Let’s look at each in turn. 1. High-Skilled vs. Low-Skilled Workers We’ll start with skill-biased technical change, which is perhaps the most carefully studied of the three phenomena. This is technical change that increases the relative demand for high-skill labor while reducing or eliminating the demand for low-skill labor. A lot of factory automation falls into this category, as routine drudgery is turned over to machines while more complex programming, management, and marketing decisions remain the purview of humans.


pages: 606 words: 87,358

The Great Convergence: Information Technology and the New Globalization by Richard Baldwin

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3D printing, additive manufacturing, Admiral Zheng, agricultural Revolution, air freight, Amazon Mechanical Turk, Berlin Wall, bilateral investment treaty, Branko Milanovic, buy low sell high, call centre, Columbian Exchange, commoditize, Commodity Super-Cycle, David Ricardo: comparative advantage, deindustrialization, domestication of the camel, Edward Glaeser, endogenous growth, Erik Brynjolfsson, financial intermediation, George Gilder, global supply chain, global value chain, Henri Poincaré, imperial preference, industrial cluster, industrial robot, intangible asset, invention of agriculture, invention of the telegraph, investor state dispute settlement, Isaac Newton, Islamic Golden Age, James Dyson, knowledge economy, knowledge worker, Lao Tzu, low skilled workers, market fragmentation, mass immigration, Metcalfe’s law, New Economic Geography, out of africa, paper trading, Paul Samuelson, Pax Mongolica, profit motive, rent-seeking, reshoring, Richard Florida, rising living standards, Robert Metcalfe, Second Machine Age, Simon Kuznets, Skype, Snapchat, Stephen Hawking, telepresence, telerobotics, The Wealth of Nations by Adam Smith, trade liberalization, trade route, Washington Consensus

Advancing Old Globalization in this world leads the rich nation to produce more of the goods that use lots of high-skill labor and advanced technology, and the poor nation to produce less of them. This naturally drives up the reward to technology and high-skill labor in the developed nation. Likewise, free trade pushes the developing nation to make more of the goods that involve a lot of low-skill labor, and this is good for low-skill workers in developing nations. The resulting intensification of low-skill-intensive exports, however, tends to be bad for low-skill workers in rich nations. This was basically the story of globalization in the 1980s. High-skill workers in rich nations won, while low-skill workers in rich nations lost. In both cases, the “mechanism of action” was trade—either higher exports or higher imports. The second unbundling (also known as the New Globalization) adds a new twist to the story. Before thinking through what happens when some of the rich nation’s know-how flows to the poor nation, it is imperative to understand one fact—namely, that knowledge is not like labor or most other factors of production.

Note that this part of the New Globalization’s impact is due to international knowledge flows as well as the trade flows thus generated; this is thus one of things that is really new about the New Globalization. When it comes to the impact that shows up in the developed nation, the vector of transmission is heightened import competition as before. That is, the GVC-fueled rise in the output of low-skill-intensive goods tends to lead to more imports by the developed nations. This plainly harms low-skill workers in the rich nation. Again, this is something that has happened in most advanced nations. There is, however, a more nuanced result from this sort of shift. Brilliant research by Branko Milanovic in his 2016 book Global Inequality: A New Approach for the Age of Globalization shows what this “new winners and losers” means from a planetary perspective. His numbers look at all humans, one by one, and ignore their nationality.

More Polarized Workforce Improved information technology changed the way productions tasks are organized into occupations. Specifically, it meant a regrouping of many low-skill tasks into occupations that tended to require higher skills. Although such automation tends to eliminate some jobs, the workers that stay on tend to be more productive and they tend to need more skills. Thus this aspect of advancing information technology tends to be good for G7 factory workers with advanced skills and bad for low-skill workers whose job is now done by a machine. By contrast, better communications technology allowed more stages to be moved offshore. The stages that were offshored tended to be related to simple fabrication and assembly steps that made heavy use of factory workers. Such workers were hardly members of “the one percent,” in the United States, Europe, and Japan, but they were in the middle-income range for blue-collar workers.


pages: 345 words: 92,849

Equal Is Unfair: America's Misguided Fight Against Income Inequality by Don Watkins, Yaron Brook

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3D printing, Affordable Care Act / Obamacare, Apple II, barriers to entry, Berlin Wall, Bernie Madoff, blue-collar work, business process, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, collective bargaining, colonial exploitation, corporate governance, correlation does not imply causation, creative destruction, Credit Default Swap, crony capitalism, David Brooks, deskilling, Edward Glaeser, Elon Musk, en.wikipedia.org, financial deregulation, immigration reform, income inequality, indoor plumbing, inventory management, invisible hand, Isaac Newton, Jeff Bezos, Jony Ive, laissez-faire capitalism, Louis Pasteur, low skilled workers, means of production, minimum wage unemployment, Naomi Klein, new economy, obamacare, Peter Singer: altruism, Peter Thiel, profit motive, rent control, Ronald Reagan, Silicon Valley, Skype, statistical model, Steve Jobs, Steve Wozniak, The Spirit Level, too big to fail, trickle-down economics, Uber for X, urban renewal, War on Poverty, wealth creators, women in the workforce, working poor, zero-sum game

What we care about is not wage rates per se, but our actual standard of living, and there is no question that war and restrictive immigration policies lower our standard of living. World War II not only destroyed an incalculable amount of wealth, both at home and abroad, but it also robbed countless individuals of their lives. Immigration, meanwhile, not only allows foreigners to share in the American Dream, which is something we should value for its own sake, but may also fuel economic growth.16 Low-skilled workers tend to bid down wages for low-skilled work, which sounds bad until you remember that this lowers the cost of the products we all buy. And high-skilled workers bring us all the benefits of their ability, which includes starting new businesses (see the careers of Andrew Carnegie, PayPal’s Elon Musk, Intel’s Andy Grove, and Google’s Sergey Brin, among many others). But we should not paint a one-sided picture.

When it comes to the minimum wage, size matters: a 16 percent increase is very different from the 30 and even 100 percent increases being proposed today.21 More important, though, is that these studies only show us what happens over the short run. Over the long run, minimum wage hikes can also lead companies to save money by replacing employees with technology, or by reducing employee perks and benefits. In other cases, higher labor costs may lead some companies not to expand, while other companies may never get started. Either way, fewer jobs for low-skilled workers.22 The point isn’t to criticize the Card and Krueger study in particular. It’s that it’s wrong to take a single empirical study as gospel, and to extrapolate its results without great care. (Writing in 1998, Krugman found it “remarkable” that “this rather iffy result [from Card and Krueger] has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda. . . .

[L]ook at the way those industries are portrayed in pop culture. Show me a plumber, and I’ll show you a 300-pound guy with a giant butt crack and a tool belt. He’s a punch line.”37 But it’s the plumber who gets the last laugh: the fact is that with only a couple years of training, a junior plumber can earn between $40,000 and $50,000 a year, and an experienced plumber can earn upward of $70,000.38 Even the low-skilled service-sector jobs at places such as McDonald’s and Walmart have been unfairly maligned as “dead-end jobs.” A low-skilled, low-paying job is not a limit on opportunity—it’s a stepping-stone to greater opportunity. Or it is if you choose to make it one. Most employers today are desperate, not just for great employees, but even for good employees—competent workers who show up on time and stay until the job is done.


pages: 196 words: 53,627

Let Them In: The Case for Open Borders by Jason L. Riley

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affirmative action, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, desegregation, guest worker program, hiring and firing, illegal immigration, immigration reform, income inequality, labor-force participation, labour market flexibility, low skilled workers, lump of labour, mass immigration, open borders, RAND corporation, Ronald Reagan, school choice, Silicon Valley, trade liberalization, War on Poverty, working poor, working-age population, zero-sum game

The reality is that the amnesty provisions in ICRA weren’t destined to bring us any closer to stopping illegal immigration than were employer sanctions. Illegal immigration to the United States is a function, first and foremost, of too many foreigners chasing too few visas. Some 400,000 people enter the country illegally each year—a direct consequence of the fact that our current policy is to make available just five thousand visas annually for low-skilled workers. If we want to reduce the number of illegal entries, the most sensible course is to provide more legal ways for people to come. This could be done through some sort of guest-worker program or by lifting the quota on green cards or both. The means matter less than the end, which should be to give U.S. businesses legal access to foreign workers going forward. ICRA did not do that, which is why it didn’t solve the problem.

Yet over the next sixty-nine years of relatively smaller immigrant flows, the average unemployment rate was 7.38 percent. Like Peri, Vedder concluded that the reason immigration doesn’t cause unemployment is because immigrants help enlarge America’s economic pie. “Immigrants expand total output and the demand for labor, offsetting the negative effects that a greater labor supply might have,” he writes. “They fill vital niches at the ends of the skill spectrum, doing low-skilled jobs that native Americans rebuff (at prevailing wages) as well as sophisticated high-skill jobs.” Among high-skilled immigrant workers, these dots are perhaps easier to connect. Think of a silicon chip manufacturer in the United States that hires a bright immigrant engineer from China to redesign its products with the goal of making them more cost-efficient and marketable. If the hire is a success, the firm winds up making more chips, which requires more employees.

If Ford and General Motors didn’t have competition from Toyota and Honda, cars would be more expensive and fewer people could afford them. Closing off the U.S. economy to foreign labor likewise would have negative consequences, primarily because the country would have less human capital overall. What’s more, we’d be a poorer society because we’d be using the human capital we did have less efficiently. Low-skilled immigrants fill millions of jobs in agriculture, construction, hotels, health care, light manufacturing, and retail. These are big and important sectors of the U.S. economy, and businesses depend on immigrant labor to stay competitive. Again, the issue isn’t so much the viability of removing foreign labor from the U.S. economy. We’d manage. The issue is whether America would be better off with an immigration policy that incentivizes natives to take jobs below their skill level.


pages: 441 words: 136,954

That Used to Be Us by Thomas L. Friedman, Michael Mandelbaum

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3D printing, Affordable Care Act / Obamacare, Albert Einstein, Amazon Web Services, American Society of Civil Engineers: Report Card, Andy Kessler, Ayatollah Khomeini, bank run, barriers to entry, Berlin Wall, blue-collar work, Bretton Woods, business process, call centre, carbon footprint, Carmen Reinhart, Cass Sunstein, centre right, Climatic Research Unit, cloud computing, collective bargaining, corporate social responsibility, creative destruction, Credit Default Swap, crowdsourcing, delayed gratification, energy security, Fall of the Berlin Wall, fear of failure, full employment, Google Earth, illegal immigration, immigration reform, income inequality, Intergovernmental Panel on Climate Change (IPCC), job automation, Kenneth Rogoff, knowledge economy, Lean Startup, low skilled workers, Mark Zuckerberg, market design, mass immigration, more computing power than Apollo, Network effects, obamacare, oil shock, pension reform, Report Card for America’s Infrastructure, rising living standards, Ronald Reagan, Rosa Parks, Saturday Night Live, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Steve Jobs, the scientific method, Thomas L Friedman, too big to fail, University of East Anglia, WikiLeaks

Moreover, in parallel with the end of the Cold War, technology was flattening the global economic playing field, reducing the advantages of the people in developed countries such as the United States, while empowering those in the developing ones. The pace of global change accelerated to a speed faster than any we had seen before. It took us Americans some time to appreciate that while many of our new competitors were low-wage, low-skilled workers, for the first time a growing number, particularly those in Asia, were low-wage, high-skilled workers. We knew all about cheap labor, but we had never had to deal with cheap genius—at scale. Our historical reference point had always been Europe. The failure to understand that we were living in a new world and to adapt to it was a colossal and costly American mistake. To be sure, the two decades following the Cold War were an extraordinarily productive period for some Americans and some sectors of the American economy.

Every day the world’s citizens, governments, businesses, terrorists—and now mountaintops—are being woven together into an ever tightening web, giving more and more people in more and more places access to cheap tools of connectivity, creativity, and collaboration. The second story tells us that all this connectivity is enabling a whole new category of workers to join the global marketplace. In the process it is exposing Americans to competition from a category of workers we have not seen before on a large scale: the low-wage, high-skilled worker. We have gotten used to low-wage, low-skilled workers in large numbers. But the low-wage, high-skilled worker is a whole new species, to which we will have to adapt. The third story tells us that these technologies are now empowering individuals to level hierarchies—from Arab tyrannies, to mainstream-media companies, to traditional retail outlets, to the United States of America itself. As a result, many of the structural advantages that America had in the Cold War decades are being erased.

The first are “creative creators,” people who do their nonroutine work in a distinctively nonroutine way—the best lawyers, the best accountants, the best doctors, the best entertainers, the best writers, the best professors, and the best scientists. Second are “routine creators,” who do their nonroutine work in a routine way—average lawyers, average accountants, average radiologists, average professors, and average scientists. The third are what we would call “creative servers,” nonroutine low-skilled workers who do their jobs in inspired ways—whether it is the baker who comes up with a special cake recipe and design or the nurse with extraordinary interpersonal bedside skills in a nursing home or the wine steward who dazzles you with his expertise on Australian cabernets. And the fourth are “routine servers,” who do routine serving work in a routine way, offering nothing extra. Attention: Just because you are doing a “nonroutine” job—as, say, a doctor, lawyer, journalist, accountant, teacher, or professor—doesn’t mean that you are safe.


pages: 386 words: 122,595

Naked Economics: Undressing the Dismal Science (Fully Revised and Updated) by Charles Wheelan

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affirmative action, Albert Einstein, Andrei Shleifer, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, capital controls, Cass Sunstein, central bank independence, clean water, collapse of Lehman Brothers, congestion charging, creative destruction, Credit Default Swap, crony capitalism, currency manipulation / currency intervention, Daniel Kahneman / Amos Tversky, David Brooks, demographic transition, diversified portfolio, Doha Development Round, Exxon Valdez, financial innovation, fixed income, floating exchange rates, George Akerlof, Gini coefficient, Gordon Gekko, greed is good, happiness index / gross national happiness, Hernando de Soto, income inequality, index fund, interest rate swap, invisible hand, job automation, John Markoff, Joseph Schumpeter, Kenneth Rogoff, libertarian paternalism, low skilled workers, lump of labour, Malacca Straits, market bubble, microcredit, money market fund, money: store of value / unit of account / medium of exchange, Network effects, new economy, open economy, presumed consent, price discrimination, price stability, principal–agent problem, profit maximization, profit motive, purchasing power parity, race to the bottom, RAND corporation, random walk, rent control, Richard Thaler, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, school vouchers, Silicon Valley, Silicon Valley startup, South China Sea, Steve Jobs, The Market for Lemons, the rule of 72, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, transaction costs, transcontinental railway, trickle-down economics, urban sprawl, Washington Consensus, Yogi Berra, young professional, zero-sum game

For example, the shift toward computers in nearly every industry favors workers who either have computer skills or are smart enough to learn them on the job. Technology makes smart workers more productive while making low-skilled workers redundant. ATMs replaced bank tellers; self-serve pumps replaced gas station attendants; automated assembly lines replaced workers doing mindless, repetitive tasks. Indeed, the assembly line at General Motors encapsulates the major trend in the American economy. Computers and sophisticated robots now assemble the major components of a car—which creates high-paying jobs for people who write software and design robots while reducing the demand for workers with no specialized skills other than a willingness to do an honest day’s work. Meanwhile, international trade puts low-skilled workers in greater competition with other low-skilled workers around the globe. In the long run, international trade is a powerful force for good; in the short run, it has victims.

Primarily because 35 percent of the population is illiterate (down from almost 50 percent in the early 1990s).2 Or individuals may suffer from conditions that render their human capital less useful. A high proportion of America’s homeless population suffers from substance abuse, disability, or mental illness. A healthy economy matters, too. It was easier to find a job in 2001 than it was in 1975 or 1932. A rising tide does indeed lift all boats; economic growth is a very good thing for poor people. Period. But even at high tide, low-skilled workers are clinging to driftwood while their better-skilled peers are having cocktails on their yachts. A robust economy does not transform valet parking attendants into college professors. Investments in human capital do that. Macroeconomic factors control the tides; human capital determines the quality of the boat. Conversely, a bad economy is usually most devastating for workers at the shallow end of the labor pool.

The motivation for this development harks back to a concept from Chapter 1: opportunity cost. Highly skilled individuals can do all kinds of productive things with their time. Thus, it is fabulously expensive to hire an engineer to bag groceries. (How much would you have to be paid to pass out towels at the Four Seasons?) There are far fewer domestic servants in the United States than in India, even though the United States is a richer country. India is awash with low-skilled workers who have few other employment options; America is not, making domestic labor relatively expensive (as anyone with a nanny can attest). Who can afford a butler who would otherwise earn $50 an hour writing computer code? When we cannot automate menial tasks, we may relegate them to students and young people as a means for them to acquire human capital. I caddied for more than a decade (most famously for George W.


pages: 112 words: 30,160

The Gated City (Kindle Single) by Ryan Avent

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big-box store, carbon footprint, deindustrialization, edge city, Edward Glaeser, income inequality, industrial cluster, labor-force participation, low skilled workers, manufacturing employment, offshore financial centre, profit maximization, rent-seeking, Silicon Valley, Thorstein Veblen, transit-oriented development, Tyler Cowen: Great Stagnation, Veblen good, white picket fence, zero-sum game

For much of last century, skilled manufacturing and semi-skilled office labor were in high demand among US firms. But as technology improved, automation eliminated many of these positions -- robots now build the cars and computers manage the books. Technology allowed a relocation of other jobs to places with lower labor costs. A huge mass of middle-skilled workers suddenly found itself competing with low-skilled workers, in America and abroad, for low-skill jobs. At the same time, technology increased the return to high-skill positions. The Internet now allows a skilled designer to serve customers around the world, substantially increasing his potential returns. Economists Lawrence Katz and Claudia Goldin further argue that America's educational system has not been very successful at increasing educational attainment. While the demand for skills rose, the supply of highly educated Americans lagged, leading to tight labor markets and high wages for the most educated, and a glutted market plagued by stagnant wages for the rest


pages: 226 words: 59,080

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik

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airline deregulation, Albert Einstein, bank run, barriers to entry, Bretton Woods, butterfly effect, capital controls, Carmen Reinhart, central bank independence, collective bargaining, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, distributed generation, Donald Davies, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, Everything should be made as simple as possible, Fellow of the Royal Society, financial deregulation, financial innovation, floating exchange rates, fudge factor, full employment, George Akerlof, Gini coefficient, Growth in a Time of Debt, income inequality, inflation targeting, informal economy, information asymmetry, invisible hand, Jean Tirole, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, labor-force participation, liquidity trap, loss aversion, low skilled workers, market design, market fundamentalism, minimum wage unemployment, oil shock, open economy, Pareto efficiency, Paul Samuelson, price stability, prisoner's dilemma, profit maximization, quantitative easing, randomized controlled trial, rent control, rent-seeking, Richard Thaler, risk/return, Robert Shiller, Robert Shiller, school vouchers, South Sea Bubble, spectrum auction, The Market for Lemons, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas Malthus, trade liberalization, trade route, ultimatum game, University of East Anglia, unorthodox policies, Vilfredo Pareto, Washington Consensus, white flight

The reigning version of the theory, called the “factor endowments” theory and first articulated by Eli Heckscher and Bertil Ohlin in the early twentieth century, predicted precisely the kinds of changes in relative wages that were taking place in the United States. According to the theory, the country would be exporting goods that were intensive in skilled labor and importing goods that were intensive in unskilled labor. Greater openness to international trade was good news for American skilled workers, who could now access larger markets, but bad news for low-skilled workers, who had to put up with greater competition. As UCLA economist Edward Leamer put it in the early 1990s, “Our low-skill workers face a sea of low-paid, low-skilled workers around the world.”17 As a consequence, the gap between the wages of the two types of workers would increase. In fact, the theory had an even stronger implication. Unskilled workers would lose out not just in relative but also in absolute terms. Increased openness would reduce their living standards.§ Discussion might have rested there, but economists noticed other developments that seemed incompatible with the factor endowments theory.

The Gini coefficient, a widely used measure of inequality that varies from 0 (no inequality) to 1 (maximum inequality, with all income going to a single household), rose from 0.40 in 1973 to 0.48 in 2012—a 20 percent increase.15 The country’s richest 10 percent raised their share of national income from 32 to 48 percent over the same period.16 What caused this dramatic change? One factor behind the rise in inequality was an increase in the “skill premium,” the gap between what high- and low-skilled workers earn. When economists first homed in on this gap beginning in the late 1980s, there was a plausible explanation at hand: globalization. The US economy had become much more exposed to international trade in recent years. Other advanced economies in Europe and Japan had largely caught up with the United States in productivity and now offered stiff competition. And there were many newly rising exporters in East Asia—South Korea, Taiwan, China—where wages were a fraction of the US level.


pages: 187 words: 55,801

The New Division of Labor: How Computers Are Creating the Next Job Market by Frank Levy, Richard J. Murnane

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Atul Gawande, call centre, computer age, Computer Numeric Control, correlation does not imply causation, David Ricardo: comparative advantage, deskilling, Frank Levy and Richard Murnane: The New Division of Labor, Gunnar Myrdal, hypertext link, index card, information asymmetry, job automation, knowledge economy, knowledge worker, low skilled workers, low-wage service sector, pattern recognition, profit motive, Robert Shiller, Robert Shiller, Ronald Reagan, speech recognition, talking drums, telemarketer, The Wealth of Nations by Adam Smith, working poor

We need only go back to 1929 when life expectancy was twenty years less than it is today to illustrate the point. But getting to the long run can be messy since economic growth in the short run usually creates losers as well as winners.8 During the industrial revolution, the short-run impact of growth was almost the opposite of what we see today. Technology favored not highskilled workers but low-skilled workers as machines combined with unskilled labor to make products ranging from textiles to bicycles to guns. It was higher-skilled workers—weavers, clock makers, and other craftsmen—whom the technology displaced. In some later periods, technology distributed its benefits more evenly. When John Kennedy was president, he could say “a rising tide lifts all the boats”9 and be substantially correct. Kennedy governed in a lucky economic time when technology and trade did not strongly favor one skill group over another, and when economic growth raised incomes for most workers, even in the short run.

But these head-to-head comparisons tell us little since food preparation and serving workers are counted under one occupational title while jobs requiring significant education tend to be divided into many occupations (e.g., electrical engineering is one of sixteen major engineering occupations classified in BLS statistics). 44 CHAPTER 3 The shift that Jeremy Rifkin feared, a “deskilled” occupational structure, requires that the total number of low-skilled jobs ( janitors plus security guards plus food preparation and service workers, etc.) increases more than the total number of higher-skilled jobs (lawyers plus doctors plus electrical engineers plus mechanical engineers, and so on). These totals are the kind of occupational categories displayed in figure 3.2, where the food preparation and service workers are included in Service Occupations. Once we move from individual job titles to occupational categories, the evidence of deskilling disappears.


pages: 271 words: 77,448

Humans Are Underrated: What High Achievers Know That Brilliant Machines Never Will by Geoff Colvin

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Ada Lovelace, autonomous vehicles, Baxter: Rethink Robotics, Black Swan, call centre, capital asset pricing model, commoditize, computer age, corporate governance, creative destruction, deskilling, en.wikipedia.org, Freestyle chess, future of work, Google Glasses, Grace Hopper, industrial cluster, industrial robot, interchangeable parts, job automation, knowledge worker, low skilled workers, Marc Andreessen, meta analysis, meta-analysis, Narrative Science, new economy, rising living standards, self-driving car, sentiment analysis, Silicon Valley, Skype, Steve Jobs, Steve Wozniak, Steven Levy, Steven Pinker, theory of mind, Tim Cook: Apple, transaction costs

The researchers show what every young job seeker of recent years already knows, that “in response to this demand reversal, high-skilled workers have moved down the occupational ladder and have begun to perform jobs traditionally performed by lower-skilled workers”—thus the widely noted upsurge in file clerks and receptionists with bachelor’s degrees, for example. The next step: “This de-skilling process, in turn, results in high-skilled workers pushing low-skilled workers even further down the occupational ladder and, to some degree, out of the labor force altogether.” That finding not only makes intuitive sense, it also helps explain America’s unusually low overall employment rate and the stagnation of wages. FROM KNOWLEDGE WORKERS TO RELATIONSHIP WORKERS It sounds as if smart, highly educated people will be scorned in the coming economy—but that is not necessarily the case.

But then the third major turning point arrived, starting in the 1980s. Information technology had developed to a point where it could take over many medium-skilled jobs—bookkeeping, back-office jobs, repetitive factory work. The number of jobs in those categories diminished, and wages stagnated for the shrinking group of workers who still did them. Yet the trend was limited. At both ends of the skill spectrum, people in high-skill jobs and low-skill service jobs did much better. The number of jobs in those categories increased, and pay went up. Economists called it the polarization of the labor market, and they observed it in the United States and many other developed countries. At the top end of the market, infotech still wasn’t good enough to take over the problem-solving, judging, and coordinating tasks of high-skill workers like managers, lawyers, consultants, and financiers; in fact, it made those workers more productive by giving them more information at lower cost.

It’s therefore striking that even Goldin and Katz believe that this hundred-year recipe for better living standards may not work anymore. “College is no longer the automatic ticket to success,” they have asserted, remarkably. “We saw that over the course of the twentieth century new technologies rewarded general skills, such as those concerning math, science, knowledge of grammar, and ability to read and interpret blueprints,” they say. Now, they say, that’s about to change because there’s ever more low-cost competition for high-skill jobs. The competition can come from humans in developing economies, and, in addition, “skills for which a computer program can substitute are also in danger.” So what’s the way forward in this new world? “Skills for non-routine employments and jobs with in-person skills are less susceptible” to low-cost competition, they point out. Employers are expressing “increased demand for those who provide skilled in-person services. . . .


pages: 437 words: 115,594

The Great Surge: The Ascent of the Developing World by Steven Radelet

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Admiral Zheng, agricultural Revolution, Asian financial crisis, bank run, Berlin Wall, Branko Milanovic, business climate, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, clean water, colonial rule, creative destruction, demographic dividend, Deng Xiaoping, Dissolution of the Soviet Union, Doha Development Round, Erik Brynjolfsson, European colonialism, F. W. de Klerk, failed state, Francis Fukuyama: the end of history, Gini coefficient, global supply chain, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), invention of the steam engine, James Watt: steam engine, John Snow's cholera map, Joseph Schumpeter, Kenneth Arrow, land reform, low skilled workers, M-Pesa, megacity, Mikhail Gorbachev, off grid, oil shock, out of africa, purchasing power parity, race to the bottom, randomized controlled trial, Robert Gordon, Second Machine Age, secular stagnation, Simon Kuznets, South China Sea, special economic zone, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, women in the workforce, working poor

James Watt’s invention of the steam engine in the 1770s ignited a surge of new innovations and technologies, including the transformation from hand to machine production, the introduction of mechanized cotton spinning (and with it the mass production of textiles), Jethro Tull’s (earlier) development of the horse-drawn seed drill (which helped increase food and agricultural production), the shift in energy sources from wood and charcoal to much cheaper coal, and the large-scale production of chemicals and iron. The beginnings of modern manufacturing and industrialization helped create millions of jobs for poor, low-skilled workers. While the wages they earned seem paltry by today’s standards, they were better than the low and highly volatile farm income that most left behind. As manufacturing grew more sophisticated and workers learned more specialized skills, which took several decades, wages began to grow. By the middle of the nineteenth century, incomes were rising faster than at any previous time in world history.

Nonfarm rural incomes also played a role, with people finding employment in small businesses making farm tools, building furniture, processing food, and selling goods in small retail shops. In the 1980s, Indonesia began to promote urban-based, labor-intensive manufacturing of shoes, textiles, garments, toys, jewelry, and many other goods for the export market. These enterprises created millions of jobs for low-skilled workers—many of them poor or near poor. All along, Indonesia complemented these strategies with efforts to invest in basic education, make primary health care available, and introduce one of the first (and largest) profitable microfinance programs in the world. The combination of sound macroeconomic management, political stability, and sensible economic policies promoted growth and helped create new economic opportunities for the poor.

It depends a lot on the policies and strategies that countries pursue. Growth tends to help the poor most when economic activity is based in areas that provide the greatest job opportunities for unskilled workers, such as agriculture, manufacturing of simple consumer goods, and basic services. It is weakest where income is already highly unequal, or when growth is concentrated in natural resources or activities that use fewer low-skilled workers. But the cases in which the poor do not benefit from growth are the exception, not the rule. In most instances, as one well-known research paper by World Bank economists David Dollar and Aart Kraay was entitled, growth is good for the poor.20 INCOME INEQUALITY: KEEPING UP WITH THE JONESES, THE CHANGS, THE GARCIAS, AND THE SISAYS We have seen that average incomes are rising in the majority of developing countries.


pages: 327 words: 90,542

The Age of Stagnation by Satyajit Das

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9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, labour mobility, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, Plutocrats, plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Apple's ubiquitous i-gadgets consist of components made in multiple countries and assembled in China, with the supply chain being managed in the US by Apple, which earns around 30–50 percent of the final price. The process favors skilled labor, reducing the share of revenue accruing to low-skilled workers. Similar complex and fragmented production processes apply to the products that constitute around 85 percent of global GDP. This approach has created a rising wage premium for skilled labor and a growing number of poorly paid, insecure, low-skilled jobs. The process is exacerbated in developed economies by the shift from manufacturing to service industries, which are currently more difficult to relocate or automate. This has driven large declines in better paid manufacturing and mid-level professional or service jobs.

It also entrenches financialization, as access to debt for housing, cars, or education becomes central. It enhances the power of the financial sector and financiers, who can command higher incomes, further increasing their wealth. Healthcare, education, and childcare are essential to increased participation in and the quality of the workforce. In developed countries, higher skill levels are needed to escape low-skilled jobs and falling real wages. Occupations requiring a university education currently offer salaries two to three times higher than those requiring lesser qualifications. While manufactured products such as cars and electronics have decreased in price, healthcare, education, and childcare costs have risen more than general price levels and incomes. The eponymous Baumol's cost disease (or the Baumol effect) identifies that increases in the cost of labor-intensive services reflect intrinsically lower rates of productivity improvement than industrial processes such as manufacturing.

When working, they cannot change jobs, as employers can levy a punitive fee. China frequently uses workers from home on foreign projects, to take advantage of lower costs and avoid the employment conditions of the host country. Conflicts, sometimes violent, with the local workforce are common. Workers, irrespective of profession and skill, now face what John Maynard Keynes termed technological unemployment. The process was championed as reducing low-skilled monotonous jobs and increasing employment mobility, as well as providing greater employment and lifestyle choices. Economists lauded the new knowledge/bioengineered/clean and green (delete as required) economy. The displaced workers would become highly educated and skilled, finding new, intellectually challenging and highly paid jobs. The more cautious argued that it was a case of TINA—there is no alternative.


pages: 411 words: 95,852

Britain Etc by Mark Easton

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agricultural Revolution, Albert Einstein, British Empire, credit crunch, financial independence, garden city movement, global village, Howard Rheingold, income inequality, intangible asset, James Watt: steam engine, knowledge economy, knowledge worker, low skilled workers, mass immigration, moral panic, Ronald Reagan, science of happiness, sexual politics, Silicon Valley, Simon Kuznets, Slavoj Žižek, social software

Business services, financial services, computer services, communications, media – these are the areas where developed countries may be able to maintain a competitive advantage. Knowledge is providing the new jobs too. Go back to the early 1980s and almost half of UK jobs were unskilled or low-skilled jobs. Now it is about a quarter. People working in the knowledge industries accounted for a third of jobs in the early 1980s. Now it is closer to half. Knowledge services now account for more than two thirds of what Britain sells to the world. With low-skilled jobs disappearing and knowledge jobs expanding, it is obvious that the UK needs to invest in knowledge, to educate and train its workforce. Britain has a higher proportion of NEETs – young people not in education, employment or training – than any other OECD country except Greece, Italy, Mexico and Turkey.

The truth was that immigration controls were irrelevant to the million Eastern Europeans who had settled in Britain – all the Polish plumbers and Latvian labourers were free to come and go as citizens of the European Union. Nevertheless, anxiety driven by EU arrivals, about which the major parties could do nothing, prompted promises to crack down on non-EU immigration, about which a good deal had already been done – it had been the case for a number of years that no unskilled or low-skilled workers could legally come to Britain from beyond the EU, and there was little evidence that significant numbers of illegal migrants were still sneaking into the UK. The only way left to allay the public’s concerns, therefore, was to limit the arrival of those non-EU migrant groups that included people the country arguably needed and wanted – high-skilled workers and fee-paying students. An attitudes survey conducted in 2011 for the Migration Observatory at Oxford University found close to two thirds of British people wanted to restrict low-skilled immigration in the UK, but less than a third were concerned about students or high-skilled workers coming.


pages: 338 words: 92,465

Reskilling America: Learning to Labor in the Twenty-First Century by Katherine S. Newman, Hella Winston

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active measures, blue-collar work, collective bargaining, Computer Numeric Control, deindustrialization, desegregation, factory automation, interchangeable parts, invisible hand, job-hopping, knowledge economy, low skilled workers, performance metric, reshoring, Ronald Reagan, Silicon Valley, two tier labour market, union organizing, upwardly mobile, War on Poverty, Wolfgang Streeck, working poor

They will lead the way in overall job growth—accounting for nearly half of all new jobs—in places like Augusta (Georgia), Salt Lake City, Knoxville, and Vallejo (California).22 Among the states projecting the highest percentage of middle-skill jobs in 2018 are Indiana (54 percent), Arkansas (52 percent), Kentucky (52 percent), West Virginia (52 percent), South Carolina (51 percent), Mississippi (51 percent), and Pennsylvania (51 percent).23 In every one of these states but one—Washington—there are more jobs available than there are middle-skill workers to fill them.24 Seven of the top ten US employers see middle-skill jobs as the most difficult to fill.25 To be sure, this “skills mismatch”—in which we have fewer workers than we need in fields that are growing and a glut of people in occupations that are stagnating—is not unique to middle-skill workers. Some states—most notably southern and traditional Rust Belt states—have substantially more low-skill workers than low-skill jobs, while others—particularly those in the Northeast—have more high-skill workers than high-skill jobs. And then there are those states, like California, that have both more low- and high-skill workers than the market demands.26 Workers qualified for middle-skill jobs will find thousands of them on offer in American firms, but many job hunters will seek their fortunes in foreign subsidiaries.

This model, which is still common today throughout the state, requires kids to take academic classes at their local high school for half the day and then get on a bus to a “voc” school to attend technical classes, ultimately graduating from their local high school with a certificate of completion (or in some cases, such as cosmetology, a state license). According to Adams, starting in the ’60s, the school was for many years geared mainly toward providing low-skill training for minimum-wage jobs to “disaffected” or learning-disabled students. It offered subjects like upholstery—there were a couple of major clothing manufacturers in the area, all of whom left about forty years ago—low-level food occupations (e.g., line and short-order cook), and trained young men to run gas stations. Courses in mechanical electrical repair, says Adams, started attracting a “slightly different” disaffected student—one who didn’t fit the mold of the standard comprehensive high school—and the school’s menu evolved even more throughout the 1980s.

At Piedmont Technical College’s Center for Advanced Manufacturing in Laurens, South Carolina, fifteen young men (no women) are working in small groups, building model conveyor belts using a combination of sensors (inductive and optical) and a software program. Most of them are in a two-year AA program, working toward a degree in mechatronics, which one of them describes as “the study of factory automation.” Some of the students in the class came to Piedmont Technical College (PTC) right out of high school, while others took a less direct route: They held low-wage fast-food jobs or low-skill factory jobs. PTC’s promotional materials emphasize that its graduates will be “career ready” the day they graduate and will earn 30 percent more than high-school graduates (they also note that some graduates start out earning more than $50,000 a year). They may do even better if they find their way to four-year institutions and obtain more advanced degrees, something that is facilitated (rather than impeded) by completing an AA degree.


pages: 209 words: 89,619

The Precariat: The New Dangerous Class by Guy Standing

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8-hour work day, banking crisis, barriers to entry, basic income, Bertrand Russell: In Praise of Idleness, call centre, Cass Sunstein, centre right, collective bargaining, corporate governance, crony capitalism, deindustrialization, deskilling, fear of failure, full employment, hiring and firing, Honoré de Balzac, housing crisis, illegal immigration, immigration reform, income inequality, labour market flexibility, labour mobility, land reform, libertarian paternalism, low skilled workers, lump of labour, marginal employment, Mark Zuckerberg, mass immigration, means of production, mini-job, moral hazard, Naomi Klein, nudge unit, old age dependency ratio, pensions crisis, placebo effect, post-industrial society, precariat, presumed consent, quantitative easing, remote working, rent-seeking, Richard Thaler, rising living standards, Ronald Coase, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, The Market for Lemons, The Nature of the Firm, The Spirit Level, Tobin tax, transaction costs, universal basic income, unpaid internship, winner-take-all economy, working poor, working-age population, young professional

Arendt, H. ([1951] 1986), The Origins of Totalitarianism, London: André Deutsch. Asthana, A. and Slater, C. (2009), ‘Most Parents Can’t Find Enough Time to Play with Their Children’, Observer, 2 August, p. 17. Atkins, R. (2009), ‘Europe Reaps the Rewards of State-Sponsored Short-Time Jobs’, Financial Times, 29 October, p. 6. Autor, D. and Houseman, S. (2010), ‘Do Temporary-Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers: Evidence from “Work First”’, American Economic Journal: Applied Economics, 3(2): 96–128. Bamford, J. (2009), The Shadow Factory: The Ultra-Secret NSA from 9/11 to the Eavesdropping on America, New York: Doubleday. Bennett, C. (2010), ‘Do We Really Need Advice on How to Deal with Boomerang Kids?’ Observer, 3 January, p. 25. Bentham, J. ([1787] 1995), Panopticon; or The Inspection-House, reprinted in M.

Commodification of education The commodification of education also makes for disappointment and anger. The drive by the education system to improve ‘human capital’ has not produced better job prospects. An education sold as an investment good that has no economic return for most buyers is, quite simply, a fraud. To give one example, 40 per cent of Spanish university students a year after graduating find themselves in low-skilled jobs that do not require their qualifications. This can only produce a pandemic of status frustration. At present, the average lifetime monetary gain from going to a college or university is substantial – £200,000 for men in the United Kingdom (Browne, 2010). Imposing high fees may thus seem fair. But fees risk marginalising university subjects that offer no financial return and ignore the fact that the return is a mean average.

For decades, tensions between French citizens and North African migrants were muted. As most of the migrants were young and employed, they were net contributors to the social security system, while French citizens were net beneficiaries. But the state was building a precariat. Migrants’ wages are lower than those of French workers and they are more vulnerable to unemployment, partly because they are in low-skilled jobs, such as construction, and more affected by economic fluctuations, partly because of discrimination. Unemployed Maghrebians often do not have the contribution record needed to claim unemployment benefit and are obliged to rely on the means-tested RMI (Revenu minimum d’insertion). However, to be eligible for the RMI, housing benefit and health protection, non-French nationals must possess a residence permit and must have lived in France for five years.


pages: 828 words: 232,188

Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama

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Affordable Care Act / Obamacare, Andrei Shleifer, Asian financial crisis, Atahualpa, banking crisis, barriers to entry, Berlin Wall, blood diamonds, British Empire, centre right, clean water, collapse of Lehman Brothers, colonial rule, conceptual framework, crony capitalism, deindustrialization, Deng Xiaoping, double entry bookkeeping, Edward Snowden, Erik Brynjolfsson, European colonialism, facts on the ground, failed state, Fall of the Berlin Wall, first-past-the-post, Francis Fukuyama: the end of history, Francisco Pizarro, Frederick Winslow Taylor, full employment, Gini coefficient, Hernando de Soto, Home mortgage interest deduction, income inequality, information asymmetry, invention of the printing press, iterative process, knowledge worker, land reform, land tenure, life extension, low skilled workers, manufacturing employment, means of production, Menlo Park, Mohammed Bouazizi, Monroe Doctrine, moral hazard, new economy, open economy, out of africa, Peace of Westphalia, Port of Oakland, post-industrial society, Post-materialism, post-materialism, price discrimination, quantitative easing, RAND corporation, rent-seeking, road to serfdom, Ronald Reagan, Scientific racism, Scramble for Africa, Second Machine Age, Silicon Valley, special economic zone, stem cell, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, too big to fail, trade route, transaction costs, Tyler Cowen: Great Stagnation, Vilfredo Pareto, women in the workforce, World Values Survey, zero-sum game

Marx’s original definition of “bourgeoisie” referred to ownership of the means of production. One of the characteristics of the modern world is that this form of property has become vastly democratized through stock ownership and pension plans. Even if one does not possess large amounts of capital, working in a managerial capacity or profession often grants one a very different kind of social status and outlook from a wage earner or low-skilled worker. A strong middle class with some assets and education is more likely to believe in the need for both property rights and democratic accountability. One wants to protect the value of one’s property from rapacious and/or incompetent governments, and is more likely to have time to participate in politics (or to demand the right to participate) because higher income provides a better margin for family survival.

In addition, politicians across the world saw cheap, subsidized credit as an acceptable substitute for outright income redistribution, leading to government-backed housing booms. The financial crisis of 2008–2009 was one consequence of this trend.11 There are a number of sources of this growing inequality, only some of which are subject to control through public policies. One villain most commonly cited is globalization—the fact that lower transportation and communications costs have effectively added hundreds of millions of low-skill workers to the global labor market, driving down wages for comparable skills in developed countries. With rising labor costs in China and other emerging-market countries, a certain amount of manufacturing has started to return to the United States and other developed countries. But this has happened in part only because labor costs as a proportion of total manufacturing costs have gotten much smaller due to increases in automation.

This points to the much more important long-term factor of technological advance, which in a sense is the underlying facilitator of globalization. There has been a constant substitution of technology for human labor over the decades, which in the nineteenth and early twentieth centuries brought huge benefits not just to elites but also to the broad mass of people in industrializing countries. The major technological innovations of this period created large numbers of jobs for low-skill workers in a succession of industries—coal and steel, chemicals, manufacturing, and construction. The Luddites, who opposed technological change, proved very wrong, insofar as new, higher-paying opportunities for work opened up to replace the ones they lost. Henry Ford’s invention of the assembly line for producing automobiles in his Highland Park, Michigan, facility actually lowered the average skill levels required to build an automobile, breaking apart the complex operations of the earlier carriage craft industry into simple, repeatable steps that a person with a fifth-grade education could accomplish.


Coming Apart: The State of White America, 1960-2010 by Charles Murray

affirmative action, assortative mating, blue-collar work, Community Supported Agriculture, corporate governance, David Brooks, en.wikipedia.org, feminist movement, George Gilder, Haight Ashbury, happiness index / gross national happiness, helicopter parent, illegal immigration, income inequality, job satisfaction, labor-force participation, low skilled workers, Menlo Park, new economy, Ralph Nader, Richard Florida, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, Unsafe at Any Speed, War on Poverty, working-age population, young professional

The percentage of hardworking Belmont men began to slack off in the 2000s, drifting down to 40 percent by 2008. But that still left a gap between the work effort of prime-age Belmont men and Fishtown men that was more than twice the gap that had separated them in 1960. “It’s the Labor Market’s Fault” A natural explanation for the numbers I have presented is that the labor market got worse for low-skill workers from 1960 to 2008. More Fishtown men worked short hours because they couldn’t get work for as many hours as they wanted; more of them were unemployed because it was harder for them to get jobs; more of them left the labor market because they were discouraged by the difficulty of finding jobs. “Jobs didn’t pay a living wage.” In one respect, the labor market did indeed get worse for Fishtown men: pay.

Some have been in the military, where they have received technical training. But completed college educations are rare in Fishtown—only 8 percent of the adults had college degrees in 2000. Fishtown has many highly skilled blue-collar workers, such as electricians, plumbers, machinists, and tool and die makers, but also many people in midskill occupations—drywall installers or heavy-equipment operators, for example. Low-skill jobs are also heavily represented among the breadwinners in Fishtown—assembly-line workers, construction laborers, security guards, delivery truck drivers, or people who work on loading docks. Most families in Fishtown have incomes somewhere in the bottom half of the national income distribution—the median family income in 2000 was only $41,900—and almost all the people who are below the poverty line live in a place like Fishtown.

But these trends don’t explain why Fishtown men in the 2000s worked fewer hours, found it harder to get jobs than other Americans did, and more often dropped out of the labor market than they had in the 1960s. On the contrary: Insofar as men need to work to survive—an important proviso—falling hourly income does not discourage work. Put yourself in the place of a Fishtown man who is at the bottom of the labor market, qualified only for low-skill jobs. You may wish you could make as much as your grandfather made working on a General Motors assembly line in the 1970s. You may be depressed because you’ve been trying to find a job and failed. But if a job driving a delivery truck, or being a carpenter’s helper, or working on a cleaning crew for an office building opens up, why would a bad labor market for blue-collar jobs keep you from taking it?


pages: 356 words: 103,944

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

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affirmative action, Asian financial crisis, bank run, banking crisis, bilateral investment treaty, borderless world, Bretton Woods, British Empire, capital controls, Carmen Reinhart, central bank independence, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, labour market flexibility, labour mobility, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, price stability, profit maximization, race to the bottom, regulatory arbitrage, savings glut, Silicon Valley, special drawing rights, special economic zone, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

In reality, trade became (and remained) free only where it posed little challenge to domestic institutions, distributional preferences, or values. Much of the trade in manufactures carried out among advanced countries at similar levels of income raised few of the questions of distributional justice we confronted earlier. Other kinds of trade—in agriculture, say, or with developing countries—were different because they pitted domestic groups starkly against each other. They threatened farming groups, garment producers, or low-skilled workers with sharp income losses. So these types of trade were heavily circumscribed. Under the GATT priorities rested solidly in the domestic policy agenda, and this produced both its success and its endless departures from the logic of free trade. The WTO Regime: Striving for Deep Integration The creation of the World Trade Organization (WTO) in 1995, after nearly eight years of negotiations and as the culmination of the so-called “Uruguay Round” (the last under the GATT), ushered quite a different understanding.

A more detailed look at trends in distribution and in trade exposes some puzzles. By some measures, wage inequality in the United States has stopped growing (or has even come down since the late 1990s), despite the rapid pace of outsourcing.18 Much of China’s exports are in technologically sophisticated and skill-intensive sectors such as computers, where they do not pose a particular threat to the wages of low-skill workers. Then there are ways in which China’s exports may have improved matters by reducing poor households’ cost of living: China tends to exports goods that make up a large share of what poor households consume.19 For these reasons, many economists continue to think that globalization accounts for just a small part—10 or 15 percent at most—of the rise in U.S. inequality since the 1970s.20 Even if the economywide consequences are small, however, they provide small comfort to the individual worker who gets displaced by imports and has to take on another job at a substantial pay cut.

He knew that South Africa was under-performing relative to other nations and to its own potential. South Africa in 2005 looked of course very different from Mauritius in 1960. A middle-income country with a fairly diversified economy, it was highly integrated with world markets and had a sophisticated financial sector. But the central challenge South Africa confronted was the same: where would the jobs needed to employ the large surplus of low-skilled workers come from? South Africa had undergone a remarkable political and economic transformation since its democratic transition in 1994. Following the end of white minority rule, it had managed to avoid a descent into acrimonious recrimination, endless redistribution, and populism that would have decimated the economy and turned the country into a sham democracy. The African National Congress government had managed to create a stable, peaceful, and racially balanced political regime with an exemplary record of civil liberties and political freedoms.


pages: 492 words: 70,082

Immigration worldwide: policies, practices, and trends by Uma Anand Segal, Doreen Elliott, Nazneen S. Mayadas

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affirmative action, Asian financial crisis, Berlin Wall, borderless world, British Empire, Celtic Tiger, centre right, conceptual framework, credit crunch, demographic transition, deskilling, en.wikipedia.org, European colonialism, Fall of the Berlin Wall, financial independence, full employment, global village, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, informal economy, knowledge economy, labor-force participation, labour market flexibility, labour mobility, low skilled workers, mass immigration, minimum wage unemployment, moral panic, New Urbanism, open borders, phenotype, South China Sea, structural adjustment programs, trade route, transaction costs, upwardly mobile, urban planning, women in the workforce

Some countries accept considerable numbers of immigrants from abroad, including the United States, Canada, Australia, New Zealand and Singapore (Table 22-1). These highly developed Western and Asian countries utilize immigration policy as a tool to resolve the shortage of low-skilled workers and certain highly skilled workers, notably in information technology (IT), health, and education (Constant and Zimmermann 2005). Asian countries in general are not so open to immigration; in 2008 the net immigration rates for Japan and South Korea were zero, and for Taiwan 0.04% (Table 22-1). However, the shortage of low-skilled workers since the late 1980s has forced the governments of these Asian countries to liberalize their immigration policy, at least for temporary immigrants. Although Korea and Taiwan have shortages of certain highly skilled workers, especially in science and technology, thus far they have depended on the return of their own scientists, engineers, and managers who went to the United States, Canada, and other advanced countries for graduate studies and later on remained in those countries and became permanent residents.

Contributing factors include difficulties in obtaining recognition for both academic qualifications and vocational credentials and experience; a lack of knowledge of the local labor market; and above all a poor knowledge of the English language (Kempton, 2002, p. 6). Asylum seekers and refugees (the former disbarred from the labor market for the first 12 months of any claim) suffer particularly acute levels of unemployment and inactivity (Bloch, 2004). There is also evidence of exploitation, particularly among low-skilled workers, brutally evidenced by two tragic events: the death of 58 people in the back of a truck en route to the UK in 2000 and, in 2004, the drowning of 22 Chinese cockle pickers at Morecambe Bay in northwest England. Public and political pressure after this latter tragedy led to the enactment of limited legislation regulating the behavior of employers in particularly vulnerable sectors. This should be set against two facts: first, downward mobility of the middle and higher skilled adult first generation generally recedes over time.

However, there are likely to be negative as well as positive effects, particularly for those at the bottom of the labor market and for previous waves of immigrants (for a full discussion see Sumption and Somerville, 2009b). In short, little account has been taken of distributional impacts. Migration’s positive wage and employment effects depend at least in part on the substitutability of migrant workers; new migrants likely have small adverse impacts on low-skilled workers who came in previous waves of immigration. Further, some estimates suggest that migrants are a drain on social benefits, despite the fact that noncitizens are limited from accessing many such benefits in the UK. A major House of Lords report found that immigration had neutral or no overall benefits, and called for a cap on the number of immigrants coming to the country (House of Lords, 2008).


pages: 319 words: 90,965

The End of College: Creating the Future of Learning and the University of Everywhere by Kevin Carey

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Albert Einstein, barriers to entry, Bayesian statistics, Berlin Wall, business intelligence, carbon-based life, Claude Shannon: information theory, complexity theory, David Heinemeier Hansson, declining real wages, deliberate practice, discrete time, double helix, Douglas Engelbart, Douglas Engelbart, Downton Abbey, Drosophila, Firefox, Frank Gehry, Google X / Alphabet X, informal economy, invention of the printing press, inventory management, John Markoff, Khan Academy, Kickstarter, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, meta analysis, meta-analysis, natural language processing, Network effects, open borders, pattern recognition, Peter Thiel, pez dispenser, ride hailing / ride sharing, Ronald Reagan, Ruby on Rails, Sand Hill Road, self-driving car, Silicon Valley, Silicon Valley startup, social web, South of Market, San Francisco, speech recognition, Steve Jobs, technoutopianism, transcontinental railway, Vannevar Bush

In addition, college degrees signal that people have successfully navigated a defined and lengthy organizational process by signing up for the right courses, attending (presumably) many of the classes, figuring out what it takes to pass the classes’ final exams, and showing up for the finals—“faithfulness, docility, and memory,” in Hutchins’s phrase. The value of this information in the labor market has increased markedly. The difference between the average wage for people with a bachelor’s degree and people with only a high school diploma doubled between 1977 and 2005, even as the supply of diploma bearers increased substantially. This occurred in part because of skill-biased technology change and the decline in real wages for low-skill workers. College credentials have also been locked in place as a required part of many large professions. Teachers, for example: There are 3.7 million elementary, middle, and high school teachers in America. Almost every one of them has a bachelor’s degree, and nearly half have a master’s degree. This did not happen because tens of thousands of school principals individually decided that it was impossible for someone to succeed in the classroom without first spending four years in a hybrid university.

Employers were also faced with another version of a familiar problem: how to sort through a lot of information with limited resources and limited time. Brassiere inventory management is a snap compared to figuring out human beings. As information technology destroyed jobs that involved simple and repetitive tasks, like painting car parts or shelving paper files, and globalization moved other low-skill jobs overseas, the American jobs that remained fell into several large categories. Some required creativity, judgment, and pattern recognition. Others involved interacting with other people by providing services of different kinds. It’s hard to tell if someone you don’t know personally will be good at either of those kinds of jobs. Living anonymously in large communities is a peculiar modern condition.


pages: 334 words: 98,950

Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang

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affirmative action, Albert Einstein, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

After all, a backyard auto repair shop is exactly how the famous Korean car maker, Hyundai, started in the 1940s. Needless to say, investment in capability-building requires short-term sacrifices. But that is not a reason not to do it, contrary to what free-trade economists say. In fact, we often see individuals making short-term sacrifices for a long-term increase in their capacities, and heartily approve of them. Suppose a low-skilled worker quits his low-paying job and attends a training course to acquire new skills. If someone were to say the worker is making a big mistake because he is now not able to earn even the low wage he used to earn, most of us would criticize that person for being short-sighted; an increase in a person’s future earning power justifies such short-term sacrifice. Likewise, countries need to make short-term sacrifices if they are to build up their long-term productive capabilities.

They are usually fixed in their physical qualities and there are few ‘general use’machines or workers with a ‘general skill’ that can be used across industries. Blast furnaces from a bankrupt steel mill cannot be re-moulded into a machine making computers; steel workers do not have the right skills for the computer industry.Unless they are retrained, the steel workers will remain unemployed. At best, they will end up working in low-skill jobs, where their existing skills are totally wasted. This point is poignantly made by the British hit comedy film of 1997, The Full Monty, where six unemployed steel workers from Sheffield struggle to rebuild their lives as male strippers. There are clearly winners and losers involved in changing trade patterns, whether it is due to trade liberalization or to the rise of new, more productive foreign producers.


pages: 347 words: 99,317

Bad Samaritans: The Guilty Secrets of Rich Nations and the Threat to Global Prosperity by Ha-Joon Chang

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affirmative action, Albert Einstein, banking crisis, Big bang: deregulation of the City of London, bilateral investment treaty, borderless world, Bretton Woods, British Empire, Brownian motion, call centre, capital controls, central bank independence, colonial rule, Corn Laws, corporate governance, David Ricardo: comparative advantage, Deng Xiaoping, Doha Development Round, en.wikipedia.org, falling living standards, Fellow of the Royal Society, financial deregulation, fixed income, Francis Fukuyama: the end of history, income inequality, income per capita, industrial robot, Isaac Newton, joint-stock company, Joseph Schumpeter, Kenneth Rogoff, labour mobility, land reform, liberal world order, liberation theology, low skilled workers, market bubble, market fundamentalism, Martin Wolf, means of production, mega-rich, moral hazard, offshore financial centre, oil shock, price stability, principal–agent problem, Ronald Reagan, South Sea Bubble, structural adjustment programs, The Wealth of Nations by Adam Smith, trade liberalization, transfer pricing, urban sprawl, World Values Survey

After all, a backyard auto repair shop is exactly how the famous Korean car maker, Hyundai, started in the 1940s. Needless to say, investment in capability-building requires short-term sacrifices. But that is not a reason not to do it, contrary to what free-trade economists say. In fact, we often see individuals making short-term sacrifices for a long-term increase in their capacities, and heartily approve of them. Suppose a low-skilled worker quits his low-paying job and attends a training course to acquire new skills. If someone were to say the worker is making a big mistake because he is now not able to earn even the low wage he used to earn, most of us would criticize that person for being short-sighted; an increase in a person’s future earning power justifies such short-term sacrifice. Likewise, countries need to make short-term sacrifices if they are to build up their long-term productive capabilities.

They are usually fixed in their physical qualities and there are few ‘general use’ machines or workers with a ‘general skill’ that can be used across industries. Blast furnaces from a bankrupt steel mill cannot be re-moulded into a machine making computers; steel workers do not have the right skills for the computer industry. Unless they are retrained, the steel workers will remain unemployed. At best, they will end up working in low-skill jobs, where their existing skills are totally wasted. This point is poignantly made by the British hit comedy film of 1997, The Full Monty, where six unemployed steel workers from Sheffield struggle to rebuild their lives as male strippers. There are clearly winners and losers involved in changing trade patterns, whether it is due to trade liberalization or to the rise of new, more productive foreign producers.

Making Globalization Work by Joseph E. Stiglitz

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affirmative action, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, Berlin Wall, business process, capital controls, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Gini coefficient, global reserve currency, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Kenneth Arrow, Kenneth Rogoff, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, trickle-down economics, union organizing, Washington Consensus, zero-sum game

The response from the Clinton administration was that America didn't want those low-wage, low-skill jobs, and that the market would create better-paid, higher-skill jobs. And during the first few years of NAFTA unemployment in the United States actually declined, from 6.8 percent, at the beginning of NAFTA, down to a low of 3.8 percent. Just as the United States and European countries made the transition from agriculture to manufacturing more than a hundred years ago, more recently they have made the move from manufacturing to services. The share of manufacturing in employment and output has fallen not just in the United States but also in Europe and Japan (to 20 percent).3 As America and Europe lost jobs in manufacturing, they gained jobs in the service sector, a sector that includes not only low-skill jobs Democratizing Globalization 271 flipping hamburgers but high-paid jobs in the financial services sector.

But too often, that does not happen. Unemployment in Europe has remained stubbornly high. People who lose their jobs do not automatically get new jobs. Especially when the unemployment rate is high, there may be an extended period of unemployment as workers search for a new employer. Middle-aged workers often fail 68 MAKING GLOBALIZATION WORK Making Trade Fair 69 to find any job at all—they simply retire earlier. Low-skilled workers are particularly likely to suffer. That is why people in the advanced industrial countries worry about losing manufacturing jobs to China or service sector jobs (like back offices of financial companies) to India. When the result of rapid trade liberalization is that unemployment goes up, then the promised benefits of liberalization are likely not to be realized." When workers move from low-productivity, protected jobs into unemployment, it is poverty, not growth, that is likely to increase.'2 Even if they do not actually lose their jobs, unskilled workers in advanced industrial countries see their wages decrease.


The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory by Kariappa Bheemaiah

accounting loophole / creative accounting, Ada Lovelace, Airbnb, algorithmic trading, asset allocation, autonomous vehicles, balance sheet recession, bank run, banks create money, Basel III, basic income, Ben Bernanke: helicopter money, bitcoin, blockchain, Bretton Woods, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, cashless society, cellular automata, central bank independence, Claude Shannon: information theory, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, complexity theory, constrained optimization, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, cryptocurrency, David Graeber, deskilling, Diane Coyle, discrete time, distributed ledger, diversification, double entry bookkeeping, ethereum blockchain, fiat currency, financial innovation, financial intermediation, Flash crash, floating exchange rates, Fractional reserve banking, full employment, George Akerlof, illegal immigration, income inequality, income per capita, inflation targeting, information asymmetry, interest rate derivative, inventory management, invisible hand, John Maynard Keynes: technological unemployment, John von Neumann, joint-stock company, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, knowledge economy, labour market flexibility, large denomination, liquidity trap, London Whale, low skilled workers, M-Pesa, Marc Andreessen, market bubble, market fundamentalism, Mexican peso crisis / tequila crisis, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, natural language processing, Network effects, new economy, Nikolai Kondratiev, offshore financial centre, packet switching, Pareto efficiency, pattern recognition, peer-to-peer lending, Ponzi scheme, precariat, pre–internet, price mechanism, price stability, private sector deleveraging, profit maximization, QR code, quantitative easing, quantitative trading / quantitative finance, Ray Kurzweil, Real Time Gross Settlement, rent control, rent-seeking, Satoshi Nakamoto, Satyajit Das, savings glut, seigniorage, Silicon Valley, Skype, smart contracts, software as a service, software is eating the world, speech recognition, statistical model, Stephen Hawking, supply-chain management, technology bubble, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Nature of the Firm, the payments system, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, trade liberalization, transaction costs, Turing machine, Turing test, universal basic income, Von Neumann architecture, Washington Consensus

The authors also found that industries and countries with faster growth rates in ICT also experienced an increase in demand for collegeeducated workers relative to workers with intermediate levels of education and that the falling quality-adjusted prices for ICT had a significant impact in causing this shift. The researchers concluded that both ICT and research and development (R&D) had raised the relative demand for college-educated workers and that, consistent with the ICT-based polarization hypothesis, this increase had come mainly from the reduction in the relative demand for middle-skilled workers rather than low-skilled workers (Michaels et al, 2010). ---------------------------------------------------------------------------------------*(As per the Occupational Information Network (ONET) database, non-routine or abstract tasks are those that involve critical thinking, judgment/ decision making, complex problem solving, interacting with computers and thinking creatively. Routine task measures are by arm-hand steadiness, manual dexterity, finger dexterity, operation monitoring, and estimating the quantifiable characteristics of products, events, or information.

While researchers and economists from MIT, notably Daron Acemoglu, established the correlation between skill acquisition and technological change, others, notably David Autor, were able to show that improvements in technology were leading to the creation of a polarized labor market, where growth was seen in jobs sectors that required high skills. Autor also found that an increasing demand was seen in jobs that involved “cognitive flexibility,” while at the same time, the demand for low-skill jobs requiring “non-routine manual tasks” also grew, creating a dip in the demand for jobs that involved tasks attributed to medium skill sets. However, more recent research from Beardy et al., 2013, has shown that there is also a reversal in the demand for jobs requiring cognitive flexibility, owing to the advancement in ICT. As technology continues to replace labor it also contributes to enlarging the inequality gap.

Furthermore, they provided evidence to support the fact that demand for labor input of routine cognitive and manual tasks in the US economy had declined, while the demand for labor input of non-routine analytic and interactive tasks had risen. By distinguishing and measuring the relative demand and supply mechanisms for tasks, the routinization hypothesis went on to prove that the effect of these demands on the labor market had led to the creation of a “polarized” work environment in which expansion was seen in the demand of high-skill and low-skills jobs, but coupled with a fall in the demand for routine or “middle-skilled” ** jobs, and that job polarization was leading to a shrinking concentration of employment in occupations in the middle of the skill distribution. The polarization effect also had an impact on the polarization of wage growth, with a relative growth in upper-tail and lower-tail earnings, relative to median or middle earnings.


pages: 401 words: 112,784

Hard Times: The Divisive Toll of the Economic Slump by Tom Clark, Anthony Heath

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Affordable Care Act / Obamacare, British Empire, Carmen Reinhart, credit crunch, Daniel Kahneman / Amos Tversky, debt deflation, deindustrialization, Etonian, eurozone crisis, falling living standards, full employment, Gini coefficient, hiring and firing, income inequality, interest rate swap, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, low skilled workers, mortgage debt, new economy, Northern Rock, obamacare, oil shock, Plutocrats, plutocrats, price stability, quantitative easing, Right to Buy, Ronald Reagan, science of happiness, statistical model, The Wealth of Nations by Adam Smith, unconventional monetary instruments, War on Poverty, We are the 99%, women in the workforce, working poor

This thought strengthens the case for not relying on state benefits to do all of the sheltering, but also to look towards regulating, rewarding or otherwise nudging employers to do more for their staff on security, as well as pay. I have heard clever and well-meaning economists half-joke that the minimum wage is ‘a means-tested benefit, arbitrarily targeted on hourly wages rather than overall income, and arbitrarily funded through a ring-fenced tax on the employers who keep low-skilled workers off the dole’. There is an economistic way of looking at the world that sees things in that light. This is a vantage point from which it always looks tidier to shelter the vulnerable by raising income support than by telling employers what to do. That is not, however, the way that voters concerned about exploitation by unscrupulous employers see things, and anyone who is actually concerned about getting resources to those lashed by hard times must respect this reality.

Bureau of Labor Statistics figures for May 1993 and May 2013, reported in Ian Brinkley, Flexibility or Insecurity? Exploring the rise in zero hours contracts, Work Foundation, London, 2013, at: www.theworkfoundation.com/DownloadPublication/Rep­ort/339_Flexibility%20or%20Insecu­rity%20-%20final.pdf 49. David H. Autor and Susan N. Houseman, ‘Do temporary-help jobs improve labor market outcomes for low-skilled workers? Evidence from “Work First”’, American Economic Journal: Applied Economics, 2:3 (2010), pp. 96–128. 50. On the basis of a survey of around 1,000 employers, the Chartered Institute of Personnel and Development estimates that around 1 million British workers could be on zero-hour contracts. See ‘Zero hours contracts more widespread than thought – but only minority of zero hours workers want to work more hours’, CIPD press release, 5 August 2013, at: www.cipd.co.uk/pressoffice/press-releases/zero-hours-contracts-more-widespread-thought–050813.aspx On the basis of a less representative survey of its own members, the trade union Unite estimates that around 20% of workers were on zero-hour style arrangements, which produces a whole-workforce figure of 5.5 million.

Top Incomes over the Twentieth Century: A global perspective, Oxford University Press, Oxford and New York, 2010. Autor, David. The Polarization of Job Opportunities in the US Labor Market, Center for American Progress/Hamilton Project, Washington, DC, 2010, available at: www.brookings.edu/∼/media/research/files/papers/2010/4/jobs%20autor/04_jobs_autor.pdf Autor, David H. and Susan N. Houseman. ‘Do temporary-help jobs improve labor market outcomes for low-skilled workers? Evidence from “Work First”’, American Economic Journal: Applied Economics, 2:3 (2010), pp. 96–128. Beckett, Francis. Clem Attlee, Politico's Publishing, London, 2000. Bell, D.N.F and D.G. Blanchflower. ‘UK unemployment in the Great Recession’, National Institute Economic Review, 214 (2010), pp. R3–R25. Bell, David N.F. and David G. Blanchflower. ‘Underemployment in the UK revisited’, National Institute Economic Review, 224 (2013), pp.


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The Rise of the Network Society by Manuel Castells

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Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, capital controls, complexity theory, computer age, computerized trading, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, John Markoff, knowledge economy, knowledge worker, labor-force participation, labour market flexibility, labour mobility, laissez-faire capitalism, Leonard Kleinrock, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Robert Metcalfe, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, zero-sum game

The study forecast that in the short term unskilled jobs would be displaced, although enhanced productivity would probably result in greater job creation in the long term.84 In the United States, Flynn analyzed 200 case studies of the employment impacts of process innovations between 1940 and 1982.85 He concluded that, while process innovations in manufacturing eliminated high-skill jobs and helped to create low-skill jobs, the opposite was true for information processing in offices, where technological innovation suppressed low-skill jobs and created high-skill ones. Thus, according to Flynn, the effects of process innovation were variable, depending upon specific situations of industries and firms. At the industry level, again in the US, the analysis by Levy and co-workers of five industries showed different effects of technological innovation: in iron mining, coal mining, and aluminium, technological change increased output and resulted in higher employment levels; in steel and automobiles, on the other hand, growth of demand did not match reduction of labor per unit of output and job losses resulted.86 Also in the United States, the analysis by Miller in the 1980s of the available evidence on the impact of industrial robotics concluded that most of the displaced workers would be reabsorbed into the labor force.87 In the UK, the study by Daniel on the employment impacts of technology in factories and offices concluded that there would be a negligible effect.

It is much more convincing, we argue, that better education and more training could, in the longer run, contribute to higher productivity and economic growth rates.136 In the same sense, David Howell has shown for the US that while there has been an increasing demand for higher skills, this is not the cause of the substantial decline in average wages for American workers between 1973 and 1990 (a fall from a weekly wage of $327 to $265 in 1990, measured in 1982 dollars). Nor is the skill mix the source of increasing income inequality. In his study with Wolff, Howell shows that while the share of low-skilled workers in the US decreased across industries, the share of low-wage workers increased in these same industries. Several studies also suggest that higher skills are in demand, although not in shortage, but higher skills do not necessarily translate into higher wages.137 Thus, in the US, while decline in real wages was more pronounced for the lowest-educated, salaries for the college-educated also stagnated between 1987 and 1993.138 The direct consequence of economic restructuring in the United State s is that in the 1980s and the first half of the 1990s family income plummeted.

These are, on the one hand, the growing flexibility of labor, that is the reduction of the proportion of the labor force with long-term employment and a predictable career path, as new generations, the majority of whom are hired for their flexibility, replace an old labor force entitled to job security in large-scale firms. Business consultants and service entrepreneurs have replaced automobile workers and insurance underwriters. On the other hand, there has been a parallel growth of highly educated occupations and low-skill jobs, with very different bargaining power in the labor market. Exaggerating the terminology to capture the imagination of the reader, I labeled these two types of workers “self-programmable labor” and “generic labor”. Indeed, there has been a tendency to increase the decision-making autonomy of educated knowledge workers who have become the most valuable assets for their companies. They are often referred to as “talent”.


pages: 352 words: 104,411

Rush Hour by Iain Gately

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Albert Einstein, autonomous vehicles, Beeching cuts, blue-collar work, British Empire, business intelligence, business process, business process outsourcing, call centre, car-free, Cesare Marchetti: Marchetti’s constant, Clapham omnibus, cognitive dissonance, congestion charging, connected car, corporate raider, DARPA: Urban Challenge, Dean Kamen, decarbonisation, Deng Xiaoping, Detroit bankruptcy, don't be evil, Elon Musk, extreme commuting, Google bus, Henri Poincaré, Hyperloop, Jeff Bezos, low skilled workers, Marchetti’s constant, postnationalism / post nation state, Ralph Waldo Emerson, remote working, self-driving car, Silicon Valley, stakhanovite, Steve Jobs, telepresence, Tesla Model S, urban planning, éminence grise

Beyond these limits productivity seemed to fall by 2.5 to 3 per cent for each extra ten minutes spent in transit. Official disapproval and the general absence of facilities notwithstanding, commuting crept into the Soviet Union in the last decade of its ‘great stagnation’ (1964–85). The Stakhanovites of freedom of movement appeared in the main in small cities. They were categorized as ‘young, low-skilled workers, occupying positions requiring low qualifications and yielding low wages’, and served as cannon fodder during the USSR’s last, futile attempt to win the Cold War through communist economics. Their mobility was permitted by the state because it was cheaper than having to build new tower blocks in the cities, and ‘substituting migration with commuting’ became official policy. It was also a partial solution to food shortages.

CHAPTER VII Two Wheels Good 149 ‘a completely Italian product, such as we have not seen since the Roman chariot’, quoted in ‘Viva Vespa’, by Janice Kirkpatrick, Design Week, 22 August 1996. 151 ‘ill-repaired bomb site manned by semi-starved workers’, Correlli Barnett, The Lost Victory: British Dreams, British Realities 1945–1950, London, Macmillan, 1995, p. 392. 154 ‘It is smooth like the enamel of an automobile’, Lewis H. Siegelbaum, Cars for Comrades: The Life of the Soviet Automobile, Ithaca, New York, Cornell University Press, 2008, p. 135. 155 ‘a commission of specialists evaluated the car’, Tracy Nichols Busch, A Class on Wheels: Avtodor and the ‘automobilization’ of the Soviet Union, 1927–1935, Washington, Georgetown University, 2003. 159 ‘young, low-skilled workers, occupying positions requiring low qualifications’, quoted in ‘Suburbanisation, employment change and commuting in the Tallinn Metropolitan Area’ (2005), Institute of Geography, University of Tartu: http://epc2006.princeton.edu/papers/60516. 163 For Japan and the Honda Super Cub, see Jeffrey W. Alexander, Japan’s Motorcycle Wars: An Industry History, Vancouver, UBC Press, 2008. 164 For Thai government survey of commuting, see R.


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Creating Unequal Futures?: Rethinking Poverty, Inequality and Disadvantage by Ruth Fincher, Peter Saunders

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barriers to entry, ending welfare as we know it, financial independence, full employment, Gini coefficient, income inequality, income per capita, labour market flexibility, labour mobility, low skilled workers, low-wage service sector, marginal employment, minimum wage unemployment, New Urbanism, open economy, pink-collar, positional goods, purchasing power parity, shareholder value, spread of share-ownership, The Bell Curve by Richard Herrnstein and Charles Murray, urban planning, urban renewal, very high income, women in the workforce, working poor, working-age population

There has been an 122 PDF OUTPUT c: ALLEN & UNWIN r: DP2\BP4401W\MAIN p: (02) 6232 5991 f: (02) 6232 4995 36 DAGLISH STREET CURTIN ACT 2605 122 INEQUALITY AND THE FUTURES OF OUR CHILDREN expansion in both higher paid jobs and lower paid jobs. The crucial question is who gets them. Gregory argues that individuals who would normally be employed in the middle of the earnings distribution are taking the lower paid jobs. This has ominous implications for the low-skilled workers who would normally have access to these jobs. ‘When there are insufficient jobs in aggregate this serves to bump the least skilled off the earnings ladder’ (Gregory 1996). This is a very different situation from the one described by Erikson and Goldthorpe (1992) when unemployment rates were negligible, there was contraction in the lower skilled jobs, and rapid expansion at the top. To repeat their conclusion, in such a world, even a highly stratified society will show high rates of mobility.

Our own analysis of ABS training data (the 1993 Survey of Training and Education) for those occupations likely to proliferate in an enlarged low-wage sector indicates that low-paid workers are only about half as likely to get access to training as are better paid workers. As Table 7.5 shows, this analysis takes account of the other key workplace factors likely to influence training, especially business size. For many of the other issues around low-paid jobs, Australian data are difficult to come by. Labour mobility figures in Australia show very little upward occupational mobility for low-skilled workers (ABS 1998, pp. 16–17) and research by Burgess and Campbell (1998) shows that the large growth in casual jobs during the 1990s did not provide a foothold into secure employment for most workers. From this we can infer that earnings mobility at the bottom of the labour market is quite limited. Further insights into the nature of low-paid jobs are provided by comparing key characteristics of low- and high-wage firms.


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The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

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Admiral Zheng, agricultural Revolution, Branko Milanovic, BRICs, British Empire, call centre, clean water, colonial exploitation, Columbian Exchange, creative destruction, declining real wages, Downton Abbey, end world poverty, financial innovation, germ theory of disease, Gini coefficient, illegal immigration, income inequality, invention of agriculture, invisible hand, John Snow's cholera map, knowledge economy, Louis Pasteur, low skilled workers, new economy, purchasing power parity, randomized controlled trial, rent-seeking, rising living standards, Ronald Reagan, Simon Kuznets, Steve Jobs, Steven Pinker, structural adjustment programs, The Spirit Level, too big to fail, trade route, very high income, War on Poverty

While Figure 3 does not show any decline of family incomes in the bottom 20 percent, the picture is different for the lowest wages, which have indeed been declining in real terms. Family incomes have kept up only because more women have been participating in the labor force, so that more families now have more than one earner. What then has been keeping wages down? Globalization is a part of the story; the manufacture of many goods that used to be made in the United States by low-skilled workers has moved to poorer countries, and many companies have sent offshore jobs that used to be done domestically, including “back-office” work (like claims processing) and customer call centers. Legal and illegal immigration has also been blamed for downward pressure on low-skill wages, though such claims remain controversial, and some credible studies show that the effect is small. The rising cost of medical care has also been important; most employees receive health insurance as part of their overall compensation, and most research shows that increases in premiums ultimately come out of wages.16 Indeed, average wages have tended to do badly when health-care costs are rising most rapidly and to do better when health-care costs are rising more slowly.17 The share of GDP going to health care, only 5 percent in 1960, was 8 percent in the mid-1970s but had risen to nearly 18 percent by 2009.

The rising cost of medical care has also been important; most employees receive health insurance as part of their overall compensation, and most research shows that increases in premiums ultimately come out of wages.16 Indeed, average wages have tended to do badly when health-care costs are rising most rapidly and to do better when health-care costs are rising more slowly.17 The share of GDP going to health care, only 5 percent in 1960, was 8 percent in the mid-1970s but had risen to nearly 18 percent by 2009. Even among low-skill jobs, how people have fared depends on just what kind of skill they have. The worst situation is to have been a clerk in a mechanical office job that can be (and has been) performed by a computer, or has been outsourced to lower-cost workers in poorer (though not the world’s poorest) countries. Even so, among the occupations with some of the lowest average wages, both wages and employment have been rising.

., Handbook of health economics, Volume 1, Part A, Elsevier, 645–706. 17. Emanuel and Fuchs, “Who really pays for health care?” 18. Robert Frank, 2007, Richistan: A journey through the American wealth boom and the lives of the new rich, Crown. 19. David H. Autor, Lawrence F. Katz, and Melissa S. Kearney, 2006, “The polarization of the U.S. labor market,” American Economic Review 96(2): 189–94, and David Autor and David Dorn, “The growth of low-skill service jobs and the polarization of the US labor market,” American Economic Review, forthcoming, available at http://economics.mit.edu/files/1474. 20. David Card and Alan B. Krueger, 1994, “Minimum wages and employment: A case study of the fast food industry in New Jersey and Pennsylvania,” American Economic Review 84(4): 772–93, and David Card and Alan B. Krueger, 1995, Myth and measurement: The new economics of the minimum wage, Princeton University Press. 21.


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Men Without Work by Nicholas Eberstadt

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Carmen Reinhart, centre right, deindustrialization, financial innovation, full employment, illegal immigration, jobless men, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labor-force participation, low skilled workers, mass immigration, moral hazard, Ronald Reagan, secular stagnation, Simon Kuznets, War on Poverty, women in the workforce, working-age population

The CEA report offered a careful presentation of the demand-side explanation, focusing particularly on the evidence for decreasing demand for less-skilled labor in postwar America: If less-educated men were simply choosing to work less . . . this should raise the relative wages of the less-educated men who choose to continue participating in the workforce. Yet, in recent decades the opposite has happened: less-educated Americans have actually suffered a reduction in their wages relative to other groups. A number of studies have identified declining labor market opportunities for low-skilled workers and related stagnant real wage growth as the most likely explanation for the decline of prime-age male labor force participation, at least for the period in the mid-to late 1970s and 1980s. . . . More recently, economists have suggested that a relative decline in labor demand for occupations that are middle-skilled or middle-paying may have begun contributing to the decline in participation in the 1990s . . .


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The 100-Year Life: Living and Working in an Age of Longevity by Lynda Gratton, Andrew Scott

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3D printing, Airbnb, assortative mating, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, creative destruction, crowdsourcing, delayed gratification, diversification, Downton Abbey, Erik Brynjolfsson, falling living standards, financial independence, first square of the chessboard, first square of the chessboard / second half of the chessboard, future of work, gender pay gap, gig economy, Google Glasses, indoor plumbing, information retrieval, intangible asset, Isaac Newton, job satisfaction, low skilled workers, Lyft, Network effects, New Economic Geography, old age dependency ratio, pattern recognition, pension reform, Peter Thiel, Ray Kurzweil, Richard Florida, Richard Thaler, Second Machine Age, sharing economy, side project, Silicon Valley, smart cities, Stephen Hawking, Steve Jobs, The Future of Employment, women in the workforce, young professional

While technology has acted as a substitute for medium-skill jobs, it has served as a complement for skilled workers. Software and computers are complementary to skilled and educated workers. So while they have replaced medium-skill work, they have boosted the productivity and therefore the income of highly skilled workers. As the income of these skilled workers has increased, so they have increased their demand for the services produced by low-skilled workers. The net effect of these substitution, complementarity and demand effects has been the hollowing out of the labour market. That described the first half of the chessboard. We are now entering the second half where computational power increases dramatically, so the concern is that the hollow gets wider and wider. So far technology has replaced simple routine tasks, and limits to computational power have restricted the loss of jobs.

If she manages to save 14 per cent of her salary, then the analysis in Figure 2.7 suggests that if she wants to retire on 50 per cent of her final salary, she will have to work until the age of 80. With this sixty years of work in mind, is a scenario based on the 4.0 portfolio model (education/work/portfolio/retirement) viable? Jane will be entering the job market around 2019. Over the following decades, numerous high-skill and low-skill routine jobs will continually disappear. As a consequence, Jane will have to devote considerable amounts of time to developing new skills and foresight about market developments. She can preserve her productive assets by on-the-job coaching and training and by taking time out to retrain. If she wants to develop new portable skills on the job, she will have to find a company that supports her to do this.


pages: 273 words: 87,159

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, intangible asset, invisible hand, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, obamacare, offshore financial centre, oil shock, Plutocrats, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Ronald Reagan, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

I observe the division of the American economy into two separate groups in a different way than the typical division of urban and rural, but very much in the spirit of Lewis’s model. I distinguish workers by the skills and occupations of the two sectors. The first sector consists of skilled workers and managers who have college degrees and command good and even very high salaries in our technological economy. I call this the FTE sector to highlight the roles of finance, technology, and electronics in this part of the economy. The other group consists of low-skilled workers who are suffering some of the ills of globalization. I call this the low-wage sector to highlight the role of politics and technology in reducing the demand for semi-skilled workers. The wages in the two sectors then can be seen in figures 2 and 3. Figure 2 shows the stagnation of average wages for the last generation. The workers with stagnant wages are the analogue of Lewis’s subsistence sector, although these workers earn well above what we think of as the earnings of actual subsistence farmers.

Atkinson, Anthony B. 2015. Inequality: What Can Be Done? Cambridge, MA: Harvard University Press. Authers, John. 2015. “Infrastructure: Bridging the Gap.” Financial Times, November 9. Autor, David H. 2015. “Why Are There Still So Many Jobs? The History and Future of Workplace Automation.” Journal of Economic Perspectives 29 (3) (Summer): 3–30. Autor, David H., and David Dorn. 2013. “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market.” American Economic Review 103 (5) (August): 1553–1597. Autor, David H., David Dorn, and Gordon H. Hanson. 2013. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” American Economic Review 103 (6): 2121–2168. Autor, David H., Frank Levy, and Richard J. Murnane. 2003. “The Skill Content of Recent Technological Change: An Empirical Exploration.”


pages: 518 words: 147,036

The Fissured Workplace by David Weil

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accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, banking crisis, barriers to entry, business process, call centre, Carmen Reinhart, Cass Sunstein, Clayton Christensen, clean water, collective bargaining, commoditize, corporate governance, corporate raider, Corrections Corporation of America, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, declining real wages, employer provided health coverage, Frank Levy and Richard Murnane: The New Division of Labor, George Akerlof, global supply chain, global value chain, hiring and firing, income inequality, information asymmetry, intermodal, inventory management, Jane Jacobs, Kenneth Rogoff, law of one price, loss aversion, low skilled workers, minimum wage unemployment, moral hazard, Network effects, new economy, occupational segregation, Paul Samuelson, performance metric, pre–internet, price discrimination, principal–agent problem, Rana Plaza, Richard Florida, Richard Thaler, Ronald Coase, shareholder value, Silicon Valley, statistical model, Steve Jobs, supply-chain management, The Death and Life of Great American Cities, The Nature of the Firm, transaction costs, ultimatum game, union organizing, women in the workforce, Y2K, yield management

Washington, DC: Brookings Institution. Ehrenberg, Ronald, and Paul Schumann. 1982. Longer Hours or More Jobs? An Investigation of Amending Hours Legislation to Create Employment. Ithaca, NY: ILR Press. Ehrenreich, Barbara. 2008. Nickel and Dimed: On (Not) Getting by in America. New York: Holt. Erickcek, George, Susan Houseman, and Arne Kalleberg. 2003. “The Effects of Temporary Services and Contracting Out on Low-Skilled Workers: Evidence from Auto Suppliers, Hospitals, and Public Schools.” In Low Wage America: How Employers Are Reshaping Opportunity in the Workplace, edited by Eileen Appelbaum, Annette Bernhardt, and Richard Murnane. New York: Russell Sage Foundation, 368–406. Erickson, Chris, and Daniel Mitchell. 2007. “Monopsony as a Metaphor for the Emerging Post-union Labor Market.” International Labor Review 146, nos. 3–4: 163–187.

The gains from trade between the two countries are still positive for the second country, but diminished from the period prior to the first country “catching up” to the second.28 Studies of the impact of offshoring on manufacturing jobs a decade ago found evidence of positive associations between rising import shares and decreasing employment, but that overall effect was relatively small. Skill-biased technologic change, where new technologies lead to displacement of low-skilled jobs by those demanding higher skills, represented a far larger factor in explaining employment declines.29 Estimates of service offshoring similarly indicate that the effects have so far been small when compared to the overall size of the labor market. But for those service activities that are vulnerable to outsourcing because they require provision of what the economist Alan Blinder calls “impersonally delivered services,” the opportunities for future movement are significant, spanning skill levels from low-skill work like scanning books and newspapers to high-skill work such as architecture and financial analysis, and sectors from parts of health care to financial services.30 Even fervent adherents of the classic gains from trade view accept that there may be deleterious distributional impacts from offshoring: the economy can benefit overall, even though certain groups are adversely affected (sometimes severely) by it in the form of lost jobs and earnings.


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Common Wealth: Economics for a Crowded Planet by Jeffrey Sachs

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agricultural Revolution, air freight, back-to-the-land, British Empire, business process, carbon footprint, clean water, colonial rule, corporate social responsibility, correlation does not imply causation, creative destruction, demographic transition, Diane Coyle, Edward Glaeser, energy security, failed state, Gini coefficient, Haber-Bosch Process, income inequality, income per capita, Intergovernmental Panel on Climate Change (IPCC), intermodal, invention of agriculture, invention of the steam engine, invisible hand, Joseph Schumpeter, knowledge worker, labor-force participation, labour mobility, low skilled workers, mass immigration, microcredit, oil shale / tar sands, old age dependency ratio, peak oil, profit maximization, profit motive, purchasing power parity, road to serfdom, Ronald Reagan, Simon Kuznets, Skype, statistical model, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, unemployed young men, War on Poverty, women in the workforce, working-age population

Developed countries are happy to accept highly skilled migrants—doctors, nurses, computer engineers—from anywhere at any time, and, indeed, they compete aggressively for them, attracting the few doctors and nurses from the poorest countries. The developed countries, meanwhile, are deeply conflicted internally about absorbing large numbers of low-skilled workers. The economics of such in-migration are more favorable than the politics. In economic terms, such in-migration of low-skilled workers tends to be a win for the source country, the host country, and the migrant. A low-skilled immigrant arriving in a rich country experiences an immediate jump in income that can be a factor of ten or more. The migrant’s employment tends to be in areas that are largely complementary with the host-country labor force, for example, in low-cost labor-intensive services (personal services, delivery boys, busboys, child care) that offer significant benefits for the host population.


pages: 261 words: 57,595

China's Future by David Shambaugh

Berlin Wall, capital controls, demographic dividend, demographic transition, Deng Xiaoping, facts on the ground, financial intermediation, financial repression, Gini coefficient, high net worth, knowledge economy, labour mobility, low skilled workers, market bubble, megacity, Mikhail Gorbachev, New Urbanism, offshore financial centre, open economy, Pearl River Delta, rent-seeking, secular stagnation, short selling, South China Sea, special drawing rights, too big to fail, urban planning, Washington Consensus, working-age population, young professional

A related concept is the “Lewis Turning Point,” named after the economist W. Arthur Lewis, who found that there is a point in the development process where cheap and excess rural labor is negated by wage increases as the supply of “surplus” labor is exhausted.11 At this point in the developmental process the comparative advantage of countries like China begins to erode—thus causing a fundamental shift in the structure of the labor market (especially for low-skilled workers)—and forces them into the Middle Income Trap. Thus the “trap” (precisely what China faces now) is that the economy needs to transition up the productivity ladder by producing more knowledge-intensive goods, investing in innovation, and retraining workers from production to service and other value-added industries. In addition, to facilitate these transitions, governments must have a more modern financial system, a more open political system, and make more efficient use of factor endowments (land, labor, and capital).


pages: 158 words: 45,927

Brexit: What the Hell Happens Now?: The Facts About Britain's Bitter Divorce From Europe 2016 by Ian Dunt

Doha Development Round, Donald Trump, energy security, low skilled workers, non-tariff barriers, open borders, Silicon Valley, UNCLOS, UNCLOS

Britain would still struggle to retain single market membership, but would probably have extensive access to it. Ministers would be able to tell the British public that they had taken back control of the border. It is unlikely hardline Brexiters would be satisfied with this arrangement, however. They would prefer a sector-by-sector work permit system. High-income, high-skill workers would be allowed into the UK. Low-income, low-skill workers wouldn’t. Free movement for bankers, passport control for plumbers. This option would also allow the government to create exemptions for low-pay industries which struggle to find British workers, such as fruit picking, which could be granted seasonal permits. This deal is unlikely to appeal to Europe. EU leaders might accept it at a stretch, but with significantly reduced access to the single market, if any.


pages: 775 words: 208,604

The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century by Walter Scheidel

agricultural Revolution, assortative mating, basic income, Berlin Wall, Bernie Sanders, Branko Milanovic, British Empire, capital controls, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, colonial rule, Columbian Exchange, conceptual framework, corporate governance, cosmological principle, crony capitalism, dark matter, declining real wages, demographic transition, Dissolution of the Soviet Union, Downton Abbey, Edward Glaeser, failed state, Fall of the Berlin Wall, financial deregulation, fixed income, Francisco Pizarro, full employment, Gini coefficient, hiring and firing, income inequality, John Markoff, knowledge worker, land reform, land tenure, low skilled workers, means of production, mega-rich, Network effects, nuclear winter, offshore financial centre, Plutocrats, plutocrats, race to the bottom, recommendation engine, rent control, rent-seeking, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, Simon Kuznets, The Future of Employment, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, transatlantic slave trade, universal basic income, very high income, working-age population, zero-sum game

Greatly increased concentration of property in the hands of the most affluent Americans and a massive rise in earnings disparities among workers both contributed to this development: the wealth share of the richest 1 percent of households more than doubled from about 14 percent in 1774 to 32 percent in 1860, whereas the Gini coefficients of earnings soared from 0.39 to 0.47.33 As I show in more detail in chapter 6, the Civil War leveled fortunes in the South but further boosted inequality in the North, two countervailing regional trends that left national metrics largely unchanged. Disequalization subsequently continued up to the early twentieth century: the top 1 percent income share almost doubled from approximately 10 percent in 1870 to about 18 percent in 1913, and skill premiums increased. Urbanization, industrialization, and massive immigration by low-skilled workers were responsible for this trend. A whole series of indices for top wealth shares likewise shows a sustained rise from 1640 to 1890 or even 1930. By one measure, between 1810 and 1910, the share of all assets held by the richest 1 percent of U.S. households almost doubled, from 25 percent to 46 percent. Wealth concentration was most pronounced at the very top: whereas in 1790 the largest reported fortune in the country had equaled 25,000 times the average annual working wage, in 1912 John D.

Stiglitz 2013: 359–361, on the prospects of putting his numerous proposals into practice, offers no substantive suggestions. Milanovic 2016: 112–117 voices healthy skepticism regarding the potential of various equalizing forces (political change, education, and an abatement of globalization pressures), placing hope on the slow dissipation of rents over time and the emergence of future technologies that might increase the relative productivity of low-skilled workers. He is particularly pessimistic about the short-term prospects of economic equalization in the United States, where all indicators point to a continuing rise in inequality in the near future (181–190, esp. 190). 13 Atkinson 2014a and 2015. In addition to Atkinson 2015: 237–238, I quote mostly from the summary version (2014a). For the question “Can it be done?” see 241–299. Gini reduction: 294, with 19 fig. 1.2, 22 fig. 1.3 (and cf. also 299 for a probable reduction of about 4 points).

“Capital taxation in the twenty-first century.” American Economic Review 105: 38–42. Autor, David H. 2014. “Skills, education, and the rise of earnings inequality among the ‘other 99 percent.’” Science 344: 843–850. Autor, David H. 2015. “Why are there still so many jobs? The history and future of workplace automation.” Journal of Economic Perspectives 29: 3–30. Autor, David, and Dorn, David. 2013. “The growth of low-skill service jobs and the polarization of the U.S. labor market.” American Economic Review 103: 1553–1597. Autor, David, Levy, Frank, and Murnane, Richard J. 2003. “The skill content of recent technological change: an empirical exploration.” Quarterly Journal of Economics 116: 1279–1333. Autor, David, Manning, Alan, and Smith, Christopher. 2010. “The contribution of the minimum wage to U.S. wage inequality over three decades: a reassessment.”


pages: 1,242 words: 317,903

The Man Who Knew: The Life and Times of Alan Greenspan by Sebastian Mallaby

airline deregulation, airport security, Andrei Shleifer, anti-communist, Asian financial crisis, balance sheet recession, bank run, barriers to entry, Benoit Mandelbrot, Bretton Woods, central bank independence, centralized clearinghouse, collateralized debt obligation, conceptual framework, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency peg, energy security, equity premium, fiat currency, financial deregulation, financial innovation, fixed income, Flash crash, forward guidance, full employment, Hyman Minsky, inflation targeting, information asymmetry, interest rate swap, inventory management, invisible hand, Kenneth Rogoff, Kitchen Debate, laissez-faire capitalism, Long Term Capital Management, low skilled workers, market bubble, market clearing, Martin Wolf, money market fund, moral hazard, mortgage debt, Myron Scholes, new economy, Nixon shock, Northern Rock, paper trading, paradox of thrift, Paul Samuelson, Plutocrats, plutocrats, popular capitalism, price stability, RAND corporation, rent-seeking, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, Saturday Night Live, savings glut, secular stagnation, short selling, The Great Moderation, the payments system, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, unorthodox policies, upwardly mobile, WikiLeaks, women in the workforce, Y2K, yield curve, zero-sum game

“We have reached a point at which more of the same will only result in more of the same frustration, more of the same explosive violence, and more of the same fear,” Nixon argued in one April speech, hewing closely to Greenspan’s thesis that government aid and ghetto violence were caught in a vicious cycle.53 Nixon would then lay out Greenspan’s program of stimulating inner-city businesses with tax breaks—there would be credits to build housing, train low-skilled workers, and encourage businesses to locate in poor urban districts. This new program for black capitalism would replace the handout culture of government programs, fostering a sense of ownership and pride, and removing the frustrations that bred violence. Nixon’s embrace of Greenspan’s ideas about black capitalism signaled that the fight with the Dakota wolves had been forgiven. Taking this cue, Greenspan’s ally, Pat Buchanan, resumed his efforts to expand Greenspan’s influence.

It was simply that, for an inflation-targeting central bank, worrying about bubbles was a secondary priority.38 Greenspan’s diagnosis of the productivity acceleration represented a clear triumph. But his policy response to that acceleration was a mixed blessing. By using the space created by productivity-driven disinflation, Greenspan presided over a glorious period of growth, high-tech investment, and job creation that boosted living standards among low-skilled workers; in the era of globalization, the late 1990s stand out as one of the few periods in which inequality retreated. But by allowing this bonanza, Greenspan also signaled an unwillingness to confront bubbles, with consequences that ultimately proved more serious than he imagined. • • • On October 30, 1996, Alan arranged a surprise dinner for Andrea. They had been together—at first loosely, then tightly—for a dozen years, and Alan gathered a few friends at Galileo, an upscale Italian restaurant in Washington.

Indeed, this stealthy tax on draftees was three times higher than the rate paid by equivalent civilians; servicemen were, in effect, bearing a heavy load so that everyone else could have an army on the cheap—it was a scandalously regressive income transfer. Building on this first argument, the economists asserted that because the true costs of military labor were obscured, military planners overused manpower and distorted the national labor market. A large supply of cheap draftees dulled the Pentagon’s incentive to free up workers from low-skilled jobs that could be mechanized. The national economy was paying a price because manpower was being wasted. One day the army wheeled out General William Westmoreland, the famously hard-nosed former commander in Vietnam, to testify in the draft’s favor. Seeking to silence the economists’ jabber about hidden taxes and labor-market distortions, Westmoreland harrumphed that he did not want to command an army of mercenaries.


pages: 267 words: 71,123

End This Depression Now! by Paul Krugman

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airline deregulation, Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, capital asset pricing model, Carmen Reinhart, centre right, correlation does not imply causation, credit crunch, Credit Default Swap, currency manipulation / currency intervention, debt deflation, Eugene Fama: efficient market hypothesis, financial deregulation, financial innovation, Financial Instability Hypothesis, full employment, German hyperinflation, Gordon Gekko, Hyman Minsky, income inequality, inflation targeting, invisible hand, Joseph Schumpeter, Kenneth Rogoff, labour market flexibility, labour mobility, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, Long Term Capital Management, low skilled workers, Mark Zuckerberg, money market fund, moral hazard, mortgage debt, negative equity, paradox of thrift, Paul Samuelson, price stability, quantitative easing, rent-seeking, Robert Gordon, Ronald Reagan, Upton Sinclair, We are the 99%, working poor, Works Progress Administration

One is the corrosive effect of long-term unemployment: if workers who have been jobless for extended periods come to be seen as unemployable, that’s a long-term reduction in the economy’s effective workforce, and hence in its productive capacity. The plight of college graduates forced to take jobs that don’t use their skills is somewhat similar: as time goes by, they may find themselves demoted, at least in the eyes of potential employers, to the status of low-skilled workers, which will mean that their education goes to waste. A second way in which the slump undermines our future is through low business investment. Businesses aren’t spending much on expanding their capacity; in fact, manufacturing capacity has fallen about 5 percent since the start of the Great Recession, as companies have scrapped older capacity and not installed new capacity to replace it.


pages: 235 words: 62,862

Utopia for Realists: The Case for a Universal Basic Income, Open Borders, and a 15-Hour Workweek by Rutger Bregman

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autonomous vehicles, banking crisis, Bartolomé de las Casas, basic income, Berlin Wall, Bertrand Russell: In Praise of Idleness, Branko Milanovic, cognitive dissonance, computer age, conceptual framework, credit crunch, David Graeber, Diane Coyle, Erik Brynjolfsson, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Levy and Richard Murnane: The New Division of Labor, full employment, George Gilder, George Santayana, happiness index / gross national happiness, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, income inequality, invention of gunpowder, James Watt: steam engine, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, Kodak vs Instagram, labour market flexibility, labour mobility, low skilled workers, means of production, megacity, meta analysis, meta-analysis, microcredit, minimum wage unemployment, Mont Pelerin Society, Nathan Meyer Rothschild: antibiotics, Occupy movement, offshore financial centre, Paul Samuelson, Peter Thiel, post-industrial society, precariat, RAND corporation, randomized controlled trial, Ray Kurzweil, Ronald Reagan, Second Machine Age, Silicon Valley, Simon Kuznets, Skype, stem cell, Steven Pinker, telemarketer, The Future of Employment, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, Tyler Cowen: Great Stagnation, universal basic income, wage slave, War on Poverty, We wanted flying cars, instead we got 140 characters, wikimedia commons, women in the workforce, working poor, World Values Survey

To disprove this fallacy, we can turn to a study by the Center for Immigration Studies – a think tank that opposes immigration – which found that immigration has virtually no effect on wages.37 Other research even shows that new arrivals lead to an uptick in the earnings of the domestic workforce.38 Hardworking immigrants boost productivity, which brings paycheck payoffs to everybody. And that’s not all. In an analysis of the period between 1990 and 2000, researchers at the World Bank found that emigration out of a country had a negative effect on wages in Europe.39 Low-skilled workers got the shortest end of the stick. Over these same years, immigrants were more productive and better educated than typically assumed, even serving to motivate less skilled natives to measure up. All too often, moreover, the alternative to hiring immigrants is to outsource work to other countries. And that, ironically, does force wages down.40 (3) They’re too lazy to work. It is true that in the Land of Plenty we pay people more to put up their feet than they might earn working outside our gates, but there’s no evidence that immigrants are more likely to apply for assistance than native citizens.


pages: 255 words: 75,172

Sleeping Giant: How the New Working Class Will Transform America by Tamara Draut

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affirmative action, Affordable Care Act / Obamacare, always be closing, battle of ideas, big-box store, blue-collar work, collective bargaining, creative destruction, David Brooks, declining real wages, deindustrialization, desegregation, Detroit bankruptcy, Donald Trump, Edward Glaeser, ending welfare as we know it, Ferguson, Missouri, financial deregulation, full employment, immigration reform, income inequality, invisible hand, job satisfaction, knowledge economy, knowledge worker, low skilled workers, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, Plutocrats, plutocrats, Powell Memorandum, profit motive, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trickle-down economics, union organizing, upwardly mobile, War on Poverty, white flight, women in the workforce, young professional

These groupings also provide an easy way to analyze the demographics of the jobholders. The problem lies in the fact that these terms have long transcended the academy and are tossed around casually to describe not only the jobs but the workers themselves. From the pages of the New York Times to the screeching talking heads on Fox News, it’s common to refer to people in many jobs as “unskilled” or “low-skilled” workers. This language is used by conservatives and progressives alike, and I used it myself until I heard a speech given by Barbara Ehrenreich at a conference on inequality sponsored by my organization, Demos. Ehrenreich referred to her time working in low-paid jobs for her best-selling book Nickel and Dimed. She worked as a maid, at Walmart, and as a nursing home assistant. Reflecting on the stress and hard work required to do these jobs, she said she learned that “there is no such thing as unskilled labor.”40 When we categorize work—work that often entails fast thinking, stamina, focus, and often demanding and repeated physical feats—as needing no or little skill, we are stripping these workers of human dignity and rationalizing the proliferation of poverty jobs.


pages: 287 words: 82,576

The Complacent Class: The Self-Defeating Quest for the American Dream by Tyler Cowen

affirmative action, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, assortative mating, Bernie Sanders, Black Swan, business climate, circulation of elites, clean water, David Graeber, declining real wages, deindustrialization, desegregation, Donald Trump, drone strike, East Village, Elon Musk, Ferguson, Missouri, Francis Fukuyama: the end of history, gig economy, Google Glasses, Hyman Minsky, Hyperloop, income inequality, intangible asset, Internet of things, inventory management, knowledge worker, labor-force participation, labour mobility, low skilled workers, Marc Andreessen, Mark Zuckerberg, medical residency, meta analysis, meta-analysis, obamacare, offshore financial centre, Paul Samuelson, Peter Thiel, purchasing power parity, Richard Florida, security theater, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, South China Sea, Steven Pinker, Stuxnet, The Great Moderation, total factor productivity, Tyler Cowen: Great Stagnation, upwardly mobile, Vilfredo Pareto, working-age population, World Values Survey

But today, high rents, resulting both from talent clusters as we might find in Manhattan or the Bay area and from restrictive building codes, make it harder to move into major cities as a path for upward mobility. Obviously, it’s no longer that easy to pick up your bags and move into an affordable place in Greenwich Village or, for that matter, Harlem, but even as you work your way out—to Jersey City, or easy-commute towns like Maplewood, New Jersey—you see the cost of renting or buying skyrocketing. For a low-skilled worker, the higher wages in those cities do not always make up for the much higher rental costs. And the reason is that those cities are so, so expensive, at least in the parts where most productive workers are willing to live.32 Compare today to the 1950s. At that time, a typical apartment in New York City rented for about $60 a month, or, adjusting for inflation, about $530 a month. Today you can’t find a broom closet in the East Village for that amount.


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

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affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, labour market flexibility, London Interbank Offered Rate, lone genius, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

For instance, in innovation, we can do this both by the kind of basic and applied research that the government funds and by forcing firms to pay for their full environmental damage. That will provide them with incentives to save on resources, diverting their attention away from replacing workers. Rather than across-the-board low interest rates (as now), which encourage the replacement even of low-skilled workers by machines, we could use investment tax credits to encourage investment; but the credits would be given only for investments that save resources and preserve jobs, not for investments that destroy resources and jobs. Throughout this book, I’ve emphasized that what matters is not just growth, but what kind of growth (or, as it’s sometimes put, the quality of growth). Growth in which most individuals are worse-off, where the quality of our environment suffers, where people endure anxiety and alienation, is not the kind of growth that we should be seeking.

It used to be part of the conventional wisdom that a small part (at most a fifth) of the increase in inequality was due to globalization. (For instance, Florence Jaumotte and Irina Tytell, “How Has the Globalization of Labor Affected the Labor Share in Advanced Countries?,” IMF Working Paper, 2007, argues that technological change was more important than globalization, especially on the wages of low skilled workers.) But more recently, Paul Krugman has argued that the impact of globalization may be larger than was previously thought. “Trade and Inequality, Revisited,” Vox, June 15, 2007; see also his paper “Trade and Wages, Reconsidered,” Brookings Panel on Economic Activity, Spring 2008. Part of the difficulty is that globalization is intertwined with the changing productivity within the United States, the weakening of unions, and a host of other economic and societal changes.


pages: 267 words: 106,340

Europe old and new: transnationalism, belonging, xenophobia by Ray Taras

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affirmative action, anti-communist, Ayatollah Khomeini, Berlin Wall, British Empire, carbon footprint, centre right, collective bargaining, energy security, full employment, Gunnar Myrdal, illegal immigration, immigration reform, low skilled workers, mass immigration, Mikhail Gorbachev, Naomi Klein, North Sea oil, open economy, postnationalism / post nation state, Potemkin village, Ronald Reagan, World Values Survey

The country’s most popular comedy show was Cronica Carcotasilor (“The Fault Finder’s Chronicle”), which lampooned political leaders and celebrities. “This program also has a coterie of female dancers who perform between sketches.” The news from Britain was not so upbeat for potential job seekers from Bulgaria and Romania. One report summed up their situation. “When the two countries joined the European Union in January, Britain capped the number of low-skilled workers it would admit to 20,000, despite offering an open door to migrants from new EU states such as Poland three years ago.”7 If over 600,000 eastern Europeans had come to Britain following the 2004 EU enlargement, only 40,000 Bulgarians and Romanians were expected to arrive in 2007. To be sure, one report suggested that it was not anti-Balkan discrimination but a skill set not fitted to the British labor market that may have kept the numbers low: “Rather than the plumbers and builders many expected, the top profession listed by Romanians is ‘circus artiste.’


pages: 348 words: 99,383

The Financial Crisis and the Free Market Cure: Why Pure Capitalism Is the World Economy's Only Hope by John A. Allison

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Affordable Care Act / Obamacare, bank run, banking crisis, Bernie Madoff, clean water, collateralized debt obligation, correlation does not imply causation, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, disintermediation, fiat currency, financial innovation, Fractional reserve banking, full employment, high net worth, housing crisis, invisible hand, life extension, low skilled workers, market bubble, market clearing, minimum wage unemployment, money market fund, moral hazard, negative equity, obamacare, Paul Samuelson, price mechanism, price stability, profit maximization, quantitative easing, race to the bottom, reserve currency, risk/return, Robert Shiller, Robert Shiller, The Bell Curve by Richard Herrnstein and Charles Murray, too big to fail, transaction costs, yield curve, zero-sum game

Also, these former construction workers are accustomed to being paid a healthy wage rate because of their construction skills, but the new manufacturing plants cannot afford to pay that high a wage because the workers, even after being retrained, still have a great deal to learn. Unemployment insurance provides an incentive for workers not to take a lower-paying job. Also, the minimum wage law keeps small businesses from hiring low-skilled workers at a wage rate that would allow their businesses to be profitable, so entry-level workers cannot gain the skills to become more productive and thereby paid at a higher level. The ripple effect continues. Manufacturing is a primary industry. The manufacturing workers, if they had jobs, would be able to buy more food, clothes, and other things, creating other jobs in other industries. (By the way, this is not an argument for manufacturing vs. service jobs; it is just easier to understand the manufacturing example.)


pages: 261 words: 103,244

Economists and the Powerful by Norbert Haring, Norbert H. Ring, Niall Douglas

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accounting loophole / creative accounting, Affordable Care Act / Obamacare, Albert Einstein, asset allocation, bank run, barriers to entry, Basel III, Bernie Madoff, British Empire, central bank independence, collective bargaining, commodity trading advisor, corporate governance, creative destruction, credit crunch, Credit Default Swap, David Ricardo: comparative advantage, diversified portfolio, financial deregulation, George Akerlof, illegal immigration, income inequality, inflation targeting, information asymmetry, Jean Tirole, job satisfaction, Joseph Schumpeter, Kenneth Arrow, knowledge worker, labour market flexibility, law of one price, light touch regulation, Long Term Capital Management, low skilled workers, mandatory minimum, market bubble, market clearing, market fundamentalism, means of production, minimum wage unemployment, moral hazard, new economy, obamacare, old-boy network, open economy, Pareto efficiency, Paul Samuelson, pension reform, Ponzi scheme, price stability, principal–agent problem, profit maximization, purchasing power parity, Renaissance Technologies, rolodex, Sergey Aleynikov, shareholder value, short selling, Steve Jobs, The Chicago School, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, ultimatum game, union organizing, Vilfredo Pareto, working-age population, World Values Survey

Dube, Lester and Reich (2010) took the methodology of Card and Krueger to the national level. They compared the employment performance and wage developments in the low-paying industries of all neighboring counties located in two different states, only one of which saw changes in the state minimum wage. They found no evidence for employment loss, but strong evidence of an improved income situation for low-skilled workers in these industries. Neumark and Wascher (2007) did a number of studies in which they found a negative impact for young workers in France in particular. Young workers tend to be less productive. This makes it likely that for relatively large numbers of them a minimum wage which might be moderate for experienced workers is far above what is justified by their own productivity level. Many countries with minimum wage rules, including the UK, take this into account by exemptions or separate rules for young workers.


pages: 377 words: 97,144

Singularity Rising: Surviving and Thriving in a Smarter, Richer, and More Dangerous World by James D. Miller

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23andMe, affirmative action, Albert Einstein, artificial general intelligence, Asperger Syndrome, barriers to entry, brain emulation, cloud computing, cognitive bias, correlation does not imply causation, crowdsourcing, Daniel Kahneman / Amos Tversky, David Brooks, David Ricardo: comparative advantage, Deng Xiaoping, en.wikipedia.org, feminist movement, Flynn Effect, friendly AI, hive mind, impulse control, indoor plumbing, invention of agriculture, Isaac Newton, John von Neumann, knowledge worker, Long Term Capital Management, low skilled workers, Netflix Prize, neurotypical, pattern recognition, Peter Thiel, phenotype, placebo effect, prisoner's dilemma, profit maximization, Ray Kurzweil, recommendation engine, reversible computing, Richard Feynman, Richard Feynman, Rodney Brooks, Silicon Valley, Singularitarianism, Skype, statistical model, Stephen Hawking, Steve Jobs, supervolcano, technological singularity, The Coming Technological Singularity, the scientific method, Thomas Malthus, transaction costs, Turing test, Vernor Vinge, Von Neumann architecture

Even workers in professions where being smarter didn’t raise their wages would receive higher salaries because of the drugs. By increasing the wages of knowledge workers, these drugs would boost the amount these laborers paid for services performed by relatively unskilled laborers. They would spend more in restaurants, hire additional domestic servants, and consequently raise the salaries of the unskilled. Cognition enhancers would also allow some low-skilled workers who hadn’t been smart enough to become highly skilled professionals to find better jobs, which would benefit both them and those who remained in low-skill occupations (who would then face less competition). Cheap cognitive-enhancing drugs would reduce chronic unemployment. Even at a wage of zero, many adults are unemployable—so low-skilled they can’t contribute anything to a company, while their very presence at a job site costs a business something because they take up space and can cause accidents.


pages: 353 words: 91,520

Most Likely to Succeed: Preparing Our Kids for the Innovation Era by Tony Wagner, Ted Dintersmith

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affirmative action, Airbnb, Albert Einstein, Bernie Sanders, Clayton Christensen, creative destruction, David Brooks, en.wikipedia.org, Frederick Winslow Taylor, future of work, immigration reform, income inequality, index card, Jeff Bezos, jimmy wales, Khan Academy, Kickstarter, knowledge economy, knowledge worker, low skilled workers, Lyft, Mark Zuckerberg, means of production, new economy, pattern recognition, Paul Graham, Peter Thiel, Ponzi scheme, pre–internet, school choice, Silicon Valley, Skype, Steven Pinker, TaskRabbit, the scientific method, unpaid internship, Y Combinator

It was a wake-up call for Ted—no routine job is safe in the twenty-first century. * * * Technology is turning our economy upside down. The bulky organizational pyramids of the last century are being replaced by millions of tiny inverted pyramids—small, agile organizations consisting almost entirely of innovative, creative employees. These agile organizations draw on employees and outsourced partners spread around the globe. Some of these organizations hire a few low-skilled workers; many hire none. With the proliferation of these companies, career options for creative problem-solvers will become ever more abundant, while options for hoop-jumpers will be dismal. * * * Ted is on the board of a fast-growing start-up called Xamarin, which makes software for creating mobile applications. Its employees live in twelve different countries, and are all adept at collaborating virtually.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

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Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

Yet, while the UK happily welcomed with open arms workers from the first tranche of EU Accession States in 2004 (Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia), workers from the second tranche in 2007 (Bulgaria and Romania) were treated less favourably as a result of new Home Office regulations. According to the EU, ‘at the heart of the new regulations is the restriction of low-skilled [Bulgarian and Romanian] workers to existing quota schemes in the agricultural and food processing sectors’.11 In effect, this means that any increase in the numbers of low-skilled Bulgarians and Romanians coming into the UK will have to be offset by a reduction in the numbers of non-EU low-skilled workers. In a sly announcement on 8 April 2009, the UK government declared, first, that ‘Strict working restrictions for Eastern Europeans will not be scrapped’ and, second, that ‘the Government is delivering on its promise to be tougher on European criminals and remove those that cause harm to our communities. From today the deportation referral threshold for European criminals will be cut from twenty-four months imprisonment to twelve months for drugs, violent and sexual offences.


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

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3D printing, balance sheet recession, banking crisis, basic income, Bernie Sanders, Bretton Woods, business climate, Carmen Reinhart, central bank independence, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, forward guidance, full employment, G4S, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labour market flexibility, low skilled workers, Martin Wolf, mass incarceration, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Steve Jobs, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, trickle-down economics, universal basic income, very high income

But since 1980, real hourly labour productivity in the US (non-farm) business sector has increased by around 85 per cent, while real hourly compensation has increased by only around 35 per cent.21 Since 1999, the ILO calculates that across thirty-six developed economies, labour productivity has increased at almost three times the rate of real wage growth (see Figure 7). At the same time as the labour share has been falling, more of it has been going to workers at the top of the earnings scale and less to those in the middle and bottom. Across advanced economies, higher-skilled workers claimed an additional 6.5 percentage points of the labour share between 1980 and 2001, whereas low-skilled workers saw their portion shrink by 4.8 percentage points.22 Meanwhile, those at the very top of the income distribution have done exceedingly well. In the US, between 1975 and 2012, the top 1 per cent gained around 47 per cent of the entire total of pre-tax increase in incomes (see Figure 8). In Canada over the same period it was 37 per cent, and in Australia and the UK over 20 per cent.23 In the US, the incomes of the richest 1 per cent rose by 142 per cent between 1980 and 2013 (from an average of $461,910, adjusted for inflation, to $1,119,315) and their share of national income doubled, from 10 to 20 per cent.


pages: 391 words: 105,382

Utopia Is Creepy: And Other Provocations by Nicholas Carr

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Air France Flight 447, Airbnb, Airbus A320, AltaVista, Amazon Mechanical Turk, augmented reality, autonomous vehicles, Bernie Sanders, book scanning, Brewster Kahle, Buckminster Fuller, Burning Man, Captain Sullenberger Hudson, centralized clearinghouse, cloud computing, cognitive bias, collaborative consumption, computer age, corporate governance, crowdsourcing, Danny Hillis, deskilling, digital map, Donald Trump, Electric Kool-Aid Acid Test, Elon Musk, factory automation, failed state, feminist movement, Frederick Winslow Taylor, friendly fire, game design, global village, Google bus, Google Glasses, Google X / Alphabet X, Googley, hive mind, impulse control, indoor plumbing, interchangeable parts, Internet Archive, invention of movable type, invention of the steam engine, invisible hand, Isaac Newton, Jeff Bezos, jimmy wales, job automation, Kevin Kelly, lifelogging, low skilled workers, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, means of production, Menlo Park, mental accounting, natural language processing, Network effects, new economy, Nicholas Carr, Norman Mailer, off grid, oil shale / tar sands, Peter Thiel, Plutocrats, plutocrats, profit motive, Ralph Waldo Emerson, Ray Kurzweil, recommendation engine, Republic of Letters, robot derives from the Czech word robota Czech, meaning slave, Ronald Reagan, self-driving car, SETI@home, side project, Silicon Valley, Silicon Valley ideology, Singularitarianism, Snapchat, social graph, social web, speech recognition, Startup school, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, technoutopianism, the medium is the message, theory of mind, Turing test, Whole Earth Catalog, Y Combinator

One of Google’s great innovations in building the data centers that run its searches was to use software as a means of isolating each component of the system and hence of separating component failure from system failure. The networking software senses a component failure (a dying hard drive, say) and immediately bypasses the component, routing the work to another, healthy piece of hardware in the system. No single component matters; each is dispensable and disposable. Maintaining the system, at the hardware level, becomes a simple process of replacing failed parts with fresh ones. You hire a low-skilled worker, or build a robot, and when a component dies, the worker, or the robot, swaps it out with a good one. Such a system requires smart software. It also requires cheap parts. 3. Executing an algorithm with a physical system is like putting a mind into a body. 4. Bruce Sterling, the cyberpunk writer, gave an interesting speech at a European tech conference a couple years back. He drew a distinction between two lifestyles that form the poles of our emerging culture.


pages: 323 words: 90,868

The Wealth of Humans: Work, Power, and Status in the Twenty-First Century by Ryan Avent

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3D printing, Airbnb, American energy revolution, assortative mating, autonomous vehicles, Bakken shale, barriers to entry, basic income, Bernie Sanders, BRICs, call centre, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, cloud computing, collective bargaining, computer age, creative destruction, dark matter, David Ricardo: comparative advantage, deindustrialization, dematerialisation, Deng Xiaoping, deskilling, Dissolution of the Soviet Union, Donald Trump, Downton Abbey, Edward Glaeser, Erik Brynjolfsson, eurozone crisis, everywhere but in the productivity statistics, falling living standards, first square of the chessboard, first square of the chessboard / second half of the chessboard, Ford paid five dollars a day, Francis Fukuyama: the end of history, future of work, gig economy, global supply chain, global value chain, hydraulic fracturing, income inequality, indoor plumbing, industrial robot, intangible asset, interchangeable parts, Internet of things, inventory management, invisible hand, Jacquard loom, James Watt: steam engine, Jeff Bezos, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph-Marie Jacquard, knowledge economy, low skilled workers, lump of labour, Lyft, manufacturing employment, Marc Andreessen, mass immigration, means of production, new economy, performance metric, pets.com, price mechanism, quantitative easing, Ray Kurzweil, rent-seeking, reshoring, rising living standards, Robert Gordon, Ronald Coase, savings glut, Second Machine Age, secular stagnation, self-driving car, sharing economy, Silicon Valley, single-payer health, software is eating the world, supply-chain management, supply-chain management software, TaskRabbit, The Future of Employment, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, trade liberalization, transaction costs, Tyler Cowen: Great Stagnation, Uber and Lyft, Uber for X, very high income, working-age population

It can, in fact, lead to slower long-run economic growth. Yet when labour is extraordinarily abundant, and when workers have no choice but to seek jobs to provide for themselves and their families, the downward pressure on pay can become intense. Cheap labour can facilitate employment growth in a few different ways. Low wages can encourage people to use more of some kinds of manual or service labour. As pay for low-skill workers stagnates, for example, more households might find it attractive to hire a house-cleaning service or a landscaping firm, to get nails done at a salon rather than at home, or to retain the services of a personal trainer. The more labour is available at very low pay, the more extensive this low-pay service economy can become. In fact, we have a very good idea what mass employment in low-skill service work looks like, thanks to examples in poorer economies, where crowds of attendants work at dubious productivity levels in hotels and restaurants, and in the eighteenth and nineteenth century, when domestic payrolls, Downton Abbey-style, absorbed large numbers of workers.


pages: 332 words: 89,668

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

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Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, Plutocrats, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scientific racism, Simon Kuznets, single-payer health, strikebreaker, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

Over the past few decades, even investment in aspects of our common life once considered crucial for advancement of the economy—research universities, for example, and infrastructure—have been allowed to go begging. Fears about the slowing of the economy in general are met with calls for the education of the workforce, as though that, rather than increasing consumer demand, will guarantee that every individual somehow has a high-paying job. In fact, automation has caused the hollowing out of the wage structure; the highest-paid people continue to be highly paid, while middle- and low-skilled workers conduct a race to the bottom for lower-skilled jobs. Without some degree of redistribution and the provision of more public goods “such as food, housing, education and health care that are necessary for a modern life to go well,” there is no guarantee that economic output will have any relationship to well-being.72 The path of the Patient Protection and Affordable Care Act (ACA, 2010) provides a good illustration of the problems caused by divergent partisan ideologies and powerful framing narratives.

Industry 4.0: The Industrial Internet of Things by Alasdair Gilchrist

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3D printing, additive manufacturing, Amazon Web Services, augmented reality, autonomous vehicles, barriers to entry, business intelligence, business process, chief data officer, cloud computing, connected car, cyber-physical system, deindustrialization, fault tolerance, global value chain, Google Glasses, hiring and firing, industrial robot, inflight wifi, Infrastructure as a Service, Internet of things, inventory management, job automation, low skilled workers, millennium bug, pattern recognition, peer-to-peer, platform as a service, pre–internet, race to the bottom, RFID, Skype, smart cities, smart grid, smart meter, smart transportation, software as a service, stealth mode startup, supply-chain management, trade route, web application, WebRTC, WebSocket, Y2K

Furthermore, it was an efficient way to boost productivity and efficiency while reducing costs and boosting bonuses. Unsurprisingly, trade unions and those whose jobs and livelihoods were at risk strenuously objected to this strategy, pointing out it wasn’t just them that were at risk. Although it might have been attractive for CEOs at the time to reduce the payload and the operational expense and offload low-skilled workers, while investing in skilled IT generalists who could perform a variety of task, the premise was flawed. 243 244 Chapter 15 | Getting From Here to There: A Roadmap Paul Krugman, back in 1996, imagined a scenario where: “Information technology would end up reducing, not increasing, the demand for highly educated workers, because a lot of what highly educated workers do could actually be replaced by sophisticated information processing —indeed, replaced more easily than a lot of manual labor.”


pages: 346 words: 90,371

Rethinking the Economics of Land and Housing by Josh Ryan-Collins, Toby Lloyd, Laurie Macfarlane, John Muellbauer

agricultural Revolution, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, basic income, Bretton Woods, Capital in the Twenty-First Century by Thomas Piketty, collective bargaining, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, debt deflation, deindustrialization, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, garden city movement, George Akerlof, ghettoisation, Gini coefficient, Hernando de Soto, housing crisis, Hyman Minsky, income inequality, information asymmetry, knowledge worker, labour market flexibility, labour mobility, land reform, land tenure, land value tax, Landlord’s Game, low skilled workers, market bubble, market clearing, Martin Wolf, means of production, money market fund, mortgage debt, negative equity, Network effects, new economy, New Urbanism, Northern Rock, offshore financial centre, Pareto efficiency, place-making, price stability, profit maximization, quantitative easing, rent control, rent-seeking, Richard Florida, Right to Buy, rising living standards, risk tolerance, Second Machine Age, secular stagnation, shareholder value, the built environment, The Great Moderation, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, universal basic income, urban planning, urban sprawl, working poor, working-age population

Changes in the distribution of income are attributed to changes in technology and to investments in human and physical capital, which have the effect of increasing the skills and productivity of certain individuals. Inequalities are explained because people with skills in high demand in sectors such as IT and finance have seen their earnings rise, reflecting their superior productivity, while low skilled workers have fallen behind. Under marginal productivity theory the solution to inequality is to increase education and job training opportunities for workers in order to increase skills and productivity across the population. This ‘supply-side’ approach has dominated economic policy making in recent decades, despite the marginal productivity theory being subject to a number of theoretical and empirical flaws.


pages: 585 words: 165,304

Trust: The Social Virtue and the Creation of Prosperity by Francis Fukuyama

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barriers to entry, Berlin Wall, blue-collar work, business climate, capital controls, collective bargaining, corporate governance, corporate raider, creative destruction, deindustrialization, Deng Xiaoping, deskilling, double entry bookkeeping, equal pay for equal work, European colonialism, Francis Fukuyama: the end of history, Frederick Winslow Taylor, full employment, George Gilder, glass ceiling, global village, Gunnar Myrdal, hiring and firing, industrial robot, Jane Jacobs, job satisfaction, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, Kenneth Arrow, labour market flexibility, labour mobility, land reform, liberal capitalism, liberation theology, low skilled workers, manufacturing employment, mittelstand, price mechanism, profit maximization, RAND corporation, rent-seeking, Ronald Coase, Silicon Valley, Steve Jobs, Steve Wozniak, The Death and Life of Great American Cities, The Nature of the Firm, the scientific method, The Wealth of Nations by Adam Smith, transaction costs, transfer pricing, traveling salesman, union organizing

Robert Blauner, Alienation and Freedom (Chicago: University of Chicago Press, 1973). 25Sabel (1981), pp. 64-67. 26See, for example, the findings of Robert Blauner in “Work Satisfaction and Industrial Trends,” in Walter Galenson and Seymour Martin Lipset, eds., Labor and Trade Unionism (New York: Wiley, 1960). One study that surveyed the views of workers in four countries found that skilled workers were concerned with having jobs that were intrinsically interesting or fulfilling, while unskilled workers were more interested in income. Many new entrants and low-skill workers, moreover, believed that having a factory job in the first place conferred significant social status. William H. Form, “Auto Workers and Their Machines: A Study of Work, Factory, and Job Satisfaction in Four Countries,” Social Forces 52 (1973): 1-15. 27On the Hawthorne experiments, see Hirszowicz (1982), pp. 52-54. 28See Elton Mayo, The Human Problems of an Industrial Civilization (New York: Macmillan, 1933), and The Social Problems of an Industrialized Civilization (London: Routledge and Kegan Paul, 1962). 29Ian Jamieson, “Some Observations on Socio-Cultural Explanations of Economic Behavior,” Sociological Review 26 (1978): 777-805.

Americans have seen a familiar story play itself out over the past decades, as a small family business with strong internal bonds is bought out by a larger company. Unsmiling new managers with reputations for ruthlessness are brought in; long-time employees are fired or fear for their jobs, and the former atmosphere of trust gives way to one of suspicion. The strong traditional communities of the midwestern rust belt were devastated over the past generation by chronic unemployment and out-migration to the West or South in search of jobs. Loss of low-skill jobs in manufacturing and meatpacking contributed significantly to the descent of part of the postwar urban black population into its current underclass hell of drugs, violence, and poverty. The negative consequences of capitalism for community life are only part of the story, however, and in many ways not the most important one. Capitalism has been uprooting Americans for most of their national history; in many ways, the social changes brought about by industrialization between the years 1850 and 1895 were greater than those that have occurred since 1950.11 One of the conclusions implicit in this book is that there are many more degrees of freedom in how capitalist societies can be organized than is often realized.


pages: 407 words: 136,138

The Working Poor: Invisible in America by David K. Shipler

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always be closing, Bonfire of the Vanities, call centre, David Brooks, full employment, illegal immigration, late fees, low skilled workers, payday loans, profit motive, Silicon Valley, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, union organizing, Upton Sinclair, War on Poverty, working poor

I won’t say that working at Burger King did that for her, but I think it gave her a great sense of self-worth, and she was able to pick herself up off the ground and get her life together. “She moved on to a different position in a different company. I still speak to her from time to time. She’s a receptionist with a real estate firm, and she also does something else, she works for a hotel. She does well. I mean, it’s not fantastic. She’s not working in Silicon Valley, but she’s doing well for where she was.” In the rough-and-tumble marketplace, then, low-skilled workers can often be rescued by a low-cost gamble, a few minutes of attention and teaching. “One young lady we were about to terminate ’cause she couldn’t get to work on time,” said Hazel Barkley of Sprint. “She’d never ridden a bus” and simply did not know how. So her supervisors showed her. “Now she can read a schedule, she takes the bus, she’s fine.” In other words, when chance happens to match a needy worker with a hungry and compassionate employer, both can benefit.


pages: 366 words: 117,875

Arrival City by Doug Saunders

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agricultural Revolution, Ayatollah Khomeini, Berlin Wall, Branko Milanovic, call centre, credit crunch, Deng Xiaoping, desegregation, ghettoisation, Gini coefficient, guest worker program, Hernando de Soto, Honoré de Balzac, illegal immigration, immigration reform, income inequality, informal economy, Jane Jacobs, Kibera, land reform, land tenure, low skilled workers, mass immigration, megacity, microcredit, new economy, Pearl River Delta, pensions crisis, place-making, price mechanism, rent control, Silicon Valley, special economic zone, the built environment, The Chicago School, The Death and Life of Great American Cities, upwardly mobile, urban planning, urban sprawl, white flight, working poor, working-age population

Such restrictions failed partly for the economic and political reasons described above, but also for a third reason: When immigrants are brought over without their networks of relatives and village neighbors, they are more likely to become isolated and unsocialized, to fall into criminality or social conservatism. This happens when family-reunification migration is restricted or when countries rely on temporary guest-worker programs to attract low-skilled workers without their families, as Germany did in the 1970s and Canada and Australia are attempting today. When settlement of families is restricted, arrival cities and their supportive networks are unable to take shape, and behavior changes. A study by Dennis Broeders and Godfried Engbersen at Erasmus University, in Rotterdam, examined immigrants forbidden to bring over relatives: Without family networks to support them, the migrants were forced into a “dependence on informal, and increasingly criminal, networks and institutions.”19 Arranged marriages, often to a cousin from a distant village whom the primary-immigrant spouse hadn’t met, became commonplace, even when the migrants are from countries such as Bangladesh or Turkey, where these practices are dying out.


pages: 464 words: 116,945

Seventeen Contradictions and the End of Capitalism by David Harvey

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accounting loophole / creative accounting, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business climate, California gold rush, call centre, central bank independence, clean water, cloud computing, collapse of Lehman Brothers, colonial rule, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, deindustrialization, demographic dividend, Deng Xiaoping, deskilling, drone strike, end world poverty, falling living standards, fiat currency, first square of the chessboard, first square of the chessboard / second half of the chessboard, Food sovereignty, Frank Gehry, future of work, global reserve currency, Guggenheim Bilbao, Gunnar Myrdal, income inequality, informal economy, invention of the steam engine, invisible hand, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Just-in-time delivery, knowledge worker, low skilled workers, Mahatma Gandhi, market clearing, Martin Wolf, means of production, microcredit, new economy, New Urbanism, Occupy movement, peak oil, phenotype, Plutocrats, plutocrats, Ponzi scheme, quantitative easing, rent-seeking, reserve currency, road to serfdom, Robert Gordon, Ronald Reagan, short selling, Silicon Valley, special economic zone, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, Tyler Cowen: Great Stagnation, wages for housework, Wall-E, women in the workforce, working poor, working-age population

When this might happen is hard to say, but most estimates suggest that the vast increase in the global wage labour force that occurred after 1980 or so will be hard to replicate once it exhausts itself after 2030 or so. In a way this is just as well, given that, as we have seen, technological change is tending to produce larger and larger redundant and even disposable populations among the less skilled.8 The gap between too few high-skill workers and a massive reserve of unemployed and increasingly unemployable medium- and low-skill workers appears to be widening, while the definition of skills is evolving rapidly. So would it be possible for capital accumulation to move beyond the exponentials it has exhibited over the past two centuries on to a similar S-shaped trajectory as has occurred in the demographics of many countries, culminating in a zero-growth, steady-state capitalist economy? The answer to this prospect is a resounding no, and it is vital to understand why.


pages: 459 words: 123,220

Our Kids: The American Dream in Crisis by Robert D. Putnam

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assortative mating, correlation does not imply causation, deindustrialization, demographic transition, desegregation, ending welfare as we know it, epigenetics, full employment, George Akerlof, helicopter parent, impulse control, income inequality, index card, jobless men, low skilled workers, manufacturing employment, mass incarceration, meta analysis, meta-analysis, mortgage tax deduction, new economy, Occupy movement, Ralph Waldo Emerson, randomized controlled trial, school choice, selection bias, Socratic dialogue, The Bell Curve by Richard Herrnstein and Charles Murray, the built environment, upwardly mobile, Walter Mischel, white flight, working poor

In such cases, there is no such tradeoff, because investment in poor kids raises the rate of growth for everyone, at the same time leveling the playing field in favor of poor kids. That has been the core rationale for public education throughout U.S. history, and much empirical research confirms that premise.5 The costs of underinvesting in poor kids are even greater in an era of globalization, because of a “skills mismatch” between what low-skilled workers can do and what employers need in an age of rapid technological change. This leads, as the economists Claudia Goldin and Lawrence Katz put it, to the “decreased utilization of the less educated” and slower economic growth.6 Our contemporary public debate recognizes this problem but assumes it is largely a “schools problem.” On the contrary, we have seen that most of the challenges facing poor kids are not caused by schools.


pages: 380 words: 118,675

The Everything Store: Jeff Bezos and the Age of Amazon by Brad Stone

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3D printing, airport security, AltaVista, Amazon Mechanical Turk, Amazon Web Services, bank run, Bernie Madoff, big-box store, Black Swan, book scanning, Brewster Kahle, call centre, centre right, Chuck Templeton: OpenTable, Clayton Christensen, cloud computing, collapse of Lehman Brothers, crowdsourcing, cuban missile crisis, Danny Hillis, Douglas Hofstadter, Elon Musk, facts on the ground, game design, housing crisis, invention of movable type, inventory management, James Dyson, Jeff Bezos, John Markoff, Kevin Kelly, Kodak vs Instagram, late fees, loose coupling, low skilled workers, Maui Hawaii, Menlo Park, Network effects, new economy, optical character recognition, pets.com, Ponzi scheme, quantitative hedge fund, recommendation engine, Renaissance Technologies, RFID, Rodney Brooks, search inside the book, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, skunkworks, Skype, statistical arbitrage, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, Thomas L Friedman, Tony Hsieh, Whole Earth Catalog, why are manhole covers round?, zero-sum game

Japanese consultants occasionally came to work with Amazon, and they were so unimpressed and derogatory that Amazon employees gave them a nickname: the insultants. Though Amazon was intensely focused on its software and systems, there was another key element of its distribution system—the low-wage laborers who actually worked in it. As Amazon grew throughout the decade, it hired tens of thousands of temporary employees each holiday season and usually kept on about 10 to 15 percent of them permanently. These generally low-skilled workers, toiling for ten to twelve dollars an hour in places where there were few other good jobs, could find Amazon to be a somewhat cruel master. Theft was a constant problem, as the FCs were stocked with easily concealable goodies like DVDs and jewelry, so the company outfitted all of its FCs with metal detectors and security cameras and eventually contracted with an outside security firm to patrol the facilities.


pages: 514 words: 152,903

The Best Business Writing 2013 by Dean Starkman

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Asperger Syndrome, bank run, Basel III, call centre, clean water, cloud computing, collateralized debt obligation, Columbine, computer vision, Credit Default Swap, credit default swaps / collateralized debt obligations, crowdsourcing, Erik Brynjolfsson, eurozone crisis, Exxon Valdez, factory automation, fixed income, full employment, Goldman Sachs: Vampire Squid, hiring and firing, hydraulic fracturing, income inequality, jimmy wales, job automation, John Markoff, late fees, London Whale, low skilled workers, Mahatma Gandhi, market clearing, Maui Hawaii, Menlo Park, Occupy movement, oil shale / tar sands, Parag Khanna, Pareto efficiency, price stability, Ray Kurzweil, Silicon Valley, Skype, sovereign wealth fund, stakhanovite, Steve Jobs, Stuxnet, the payments system, too big to fail, Vanguard fund, wage slave, Y2K, zero-sum game

All told, the factory here has several dozen workers per shift, about a tenth as many as the plant in the Chinese city of Zhuhai. This is the future. A new wave of robots, far more adept than those now commonly used by automakers and other heavy manufacturers, are replacing workers around the world in both manufacturing and distribution. Factories like the one here in the Netherlands are a striking counterpoint to those used by Apple and other consumer electronics giants, which employ hundreds of thousands of low-skilled workers. “With these machines, we can make any consumer device in the world,” said Binne Visser, an electrical engineer who manages the Philips assembly line in Drachten. Many industry executives and technology experts say Philips’s approach is gaining ground on Apple’s. Even as Foxconn, Apple’s iPhone manufacturer, continues to build new plants and hire thousands of additional workers to make smartphones, it plans to install more than a million robots within a few years to supplement its work force in China.


pages: 565 words: 164,405

A Splendid Exchange: How Trade Shaped the World by William J. Bernstein

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Admiral Zheng, asset allocation, bank run, Benoit Mandelbrot, British Empire, call centre, clean water, Columbian Exchange, Corn Laws, David Ricardo: comparative advantage, deindustrialization, Doha Development Round, domestication of the camel, double entry bookkeeping, Eratosthenes, financial innovation, Gini coefficient, God and Mammon, ice-free Arctic, imperial preference, income inequality, intermodal, James Hargreaves, John Harrison: Longitude, Khyber Pass, low skilled workers, non-tariff barriers, Paul Samuelson, placebo effect, Port of Oakland, refrigerator car, Silicon Valley, South China Sea, South Sea Bubble, spice trade, spinning jenny, Steven Pinker, The Wealth of Nations by Adam Smith, Thomas L Friedman, Thomas Malthus, trade liberalization, trade route, transatlantic slave trade, transatlantic slave trade, transcontinental railway, upwardly mobile, working poor, zero-sum game

As predicted by Stolper-Samuelson, this issue cleaves the nation along the abundant-scarce factor fault line: among those earning more than $100,000 per year, only one-third agreed, whereas among bluecollar workers and union members, two-thirds agreed.22 Stolper-Samuelson does fail in at least one area by predicting that freer trade should decrease inequalities in developing nations by helping low-skilled workers. In fact, the opposite occurs: the most highly skilled industrial workers earn better pay in call centers and multinational-owned plants, increasing the gap between those who are fortunate enough to find such work and those who are not.23 Although working conditions in an Asian Nike factory may appall people in the developed world, positions in American-associated factories are the most sought-after jobs in Vietnam's "development zones."


pages: 437 words: 113,173

Age of Discovery: Navigating the Risks and Rewards of Our New Renaissance by Ian Goldin, Chris Kutarna

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, Airbnb, Albert Einstein, AltaVista, Asian financial crisis, asset-backed security, autonomous vehicles, banking crisis, barriers to entry, battle of ideas, Berlin Wall, bioinformatics, bitcoin, Bonfire of the Vanities, clean water, collective bargaining, Colonization of Mars, Credit Default Swap, crowdsourcing, cryptocurrency, Dava Sobel, demographic dividend, Deng Xiaoping, Doha Development Round, double helix, Edward Snowden, Elon Musk, en.wikipedia.org, epigenetics, experimental economics, failed state, Fall of the Berlin Wall, financial innovation, full employment, Galaxy Zoo, global supply chain, Hyperloop, immigration reform, income inequality, indoor plumbing, industrial cluster, industrial robot, information retrieval, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invention of the printing press, Isaac Newton, Islamic Golden Age, Khan Academy, Kickstarter, labour market flexibility, low cost carrier, low skilled workers, Lyft, Malacca Straits, mass immigration, megacity, Mikhail Gorbachev, moral hazard, Network effects, New Urbanism, non-tariff barriers, Occupy movement, On the Revolutions of the Heavenly Spheres, open economy, Panamax, Pearl River Delta, personalized medicine, Peter Thiel, post-Panamax, profit motive, rent-seeking, reshoring, Robert Gordon, Robert Metcalfe, Search for Extraterrestrial Intelligence, Second Machine Age, self-driving car, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Skype, smart grid, Snapchat, special economic zone, spice trade, statistical model, Stephen Hawking, Steve Jobs, Stuxnet, TaskRabbit, The Future of Employment, too big to fail, trade liberalization, trade route, transaction costs, transatlantic slave trade, uranium enrichment, We are the 99%, We wanted flying cars, instead we got 140 characters, working poor, working-age population, zero day

In 2004, the European Union began an expansion to include countries in Central Europe, Eastern Europe and the Baltics. EU expansion granted those populations mobility rights they had long desired but been denied. By 2014, over 14 million EU citizens were living in an EU country outside the country of their birth.56 Globally, some 17 million people migrate to a new country each year, in a variety of visa categories. They include 3.5 million low-skilled workers who migrate each year from countries such as the Philippines and India to the Middle East and elsewhere, and some 300,000 who cross the border from Mexico into the US.57 Year by year, migrants are tying every region of the world together at the family level. See Figure 3-3. The rest of us are lucky they do. The US is home to nearly 50 million legal immigrants from virtually every other country of the world—and, it’s estimated, 11 million more who are undocumented.58 Many societies are divided by intense political debates about the merits and costs of letting people move more freely.


pages: 204 words: 67,922

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

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3D printing, assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, Post-materialism, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

Thus computers, according to Levy and Murnane, create as many jobs as they eliminate. They do this by stimulating economic growth by lowering costs for the tasks they do well: Computers “shift work away from routine tasks and towards … expert thinking and complex communication.” The jobs they tend to displace don’t involve much independent thought, but rather raw computational or processing ability. They get rid of these low-skilled jobs in two ways: (1) by doing them themselves (e.g., through voice recognition phone trees); and (2) by allowing others in lower-wage labor markets to do them for us (as in the much maligned and much celebrated call centers in India). The result is that the jobs created over the last forty years have not gotten more specific; they have actually gotten broader.36With computerization, we are not, on average, rendered into mindless number punchers.

It’s not that our jobs have necessarily gotten harder, but the increase in variance in our everyday tasks and the fact that they require more mental concentration and cognitive skills may be quite stress-inducing. There is always a new surprise just around the corner for the knowledge worker. The boring jobs that can be delegated to computers have been. Others that can’t have been outsourced to low-wage labor markets (the famous Indian call centers), thanks to telecommunications technologies. The only low-skilled jobs that really remain in the United States are those which involve personal contact that cannot be performed from afar. It’s no surprise that the fastest-growing low-wage occupations are food service preparation, followed by home health care workers.37 After all, you can’t very well get a computer or a call service center to wipe your incontinent grandmother or serve her three hot meals a day.

As much as the left likes to blame Ronald Reagan (and the two Bushes) for the steady rise in income inequality, much of it had to do with computer technology. And then there are the second-order effects of rising inequality on the economy. Paradoxically, the fastest-growing number of jobs in the first decade of the third millennium is projected to be in food preparation and service.38 Computers were supposed to eliminate low-skilled jobs and create high-skilled ones. So, what’s happening here? It’s an indirect effect: the inequality itself creates the low-wage serving jobs. After all, the high-wage workers are—for the first time in history—working more hours than their lower-wage counterparts. In other words, the substitution effect (greater opportunity costs of not working) is swamping the income effect (greater ability to afford not to work).


pages: 193 words: 47,808

The Flat White Economy by Douglas McWilliams

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access to a mobile phone, banking crisis, Big bang: deregulation of the City of London, bonus culture, Chuck Templeton: OpenTable, cleantech, cloud computing, computer age, correlation coefficient, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, eurozone crisis, George Gilder, hiring and firing, income inequality, informal economy, knowledge economy, loadsamoney, low skilled workers, mass immigration, Metcalfe’s law, Network effects, new economy, offshore financial centre, Pareto efficiency, Peter Thiel, Productivity paradox, Robert Metcalfe, Silicon Valley, smart cities, special economic zone, Steve Jobs, working-age population, zero-sum game

The type of people that have caused London to become an epicentre of digital creativity are young and come from all around the world. London is an essentially migrant-based labour market; four out of every ten employees in London were born outside the UK. Of these, about three-quarters were born outside the European Economic Area (EEA), the remaining quarter from the other European countries in the EEA. Of course, it is true that many (around half) of those working in London but born outside the UK work in low-skilled jobs. But the other half work in skilled jobs and are often particularly highly qualified. Even among migrant workers in low-skill employment, a surprising large number have academic qualifications well in excess of those required for their jobs. Although the pace of non-EEA immigration slowed after the election of a Conservative-led coalition which cut back on those parts of immigration subject to UK control, the growing economic recession in Europe associated with the problems of the euro led to a massive rise in immigration to the UK from within the EU (especially from Southern Europe).

article=1021&context=confpapers INDEX Accenture Fintech Innovation Lab ref1 accommodation ref1, ref2, ref3 cheap ref1, ref2, ref3 cramped ref1 displacement of ref1 proximity to amenities ref1 Advanced Card Systems ref1 advertising/marketing ref1, ref2 campaigns ref1 digital ref1 investment in ref1 online ref1, ref2, ref3, ref4 role of creativity in ref1 Aerob ref1 AirWatch ref1 Alibaba ref1, ref2 floated on NYSE ref1 Allegra Strategies ref1 Allford, Simon ref1 Allford Hall Monaghan Morris ref1 Amazon.com, Inc. ref1, ref2, ref3 Apple, Inc. ref1, ref2, ref3 development kits ref1 facilities of ref1 product lines of ref1 Argentina Buenos Aires share of GDP ref1 Association of London Councils ref1 AT&T Inc. ref1 Australia ref1 Sydney ref1 Austria Vienna share of GDP ref1 Bangladesh economy of ref1 Dhaka ref1 Bank of England investment guidelines ref1 BASF SE ref1 Bell Telephones personnel of ref1 Bennet, Natalie leader of Green Party ref1 bicycles ref1 fatalities associated with ref1 sales of ref1 use in commuting ref1 big data ref1 Birmingham Science Park Aston Innovation Birmingham Complex ref1 Bold Rocket ref1 bonuses ref1 use in property market ref1 Boston Consulting Group ref1, ref2 British Bars and Pubs Association ref1 British Broadcasting Corporation (BBC) BBC Scotland ref1 Brough, Graham ref1 Brown, Gordon ref1, ref2 Burkina Faso Ouagadougou ref1 Burt, Prof Ronald ref1, ref2 Cable and Wireless assets of ref1 Cameron, David economic policies of ref1, ref2 immigration policies of ref1 Canada ref1 Montreal ref1 Toronto ref1, ref2 Vancouver ref1 capital rate of return ref1, ref2 capitalism ref1, ref2, ref3 profits ref1 Catholicism ref1 Centre for Cities ref1, ref2 Centre for Economics and Business Research (Cebr) ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9 estimates of UK economic growth ref1 offices of ref1 personnel of ref1, ref2 Centre for Retail Research ref1, ref2 champagne sales figures ref1, ref2 Channel 4 ref1 China Beijing ref1, ref2, ref3 Haidian district ref1 economy of ref1 Golden Shield firewall (Great Firewall of China) ref1 government of ref1, ref2, ref3 Hong Kong ref1, ref2, ref3, ref4, ref5, ref6 Cyberport ref1 Hong Kong Stock Exchange ref1 People’s Liberation Army (PLA) ref1, ref2 special economic zones Hangzhou ref1 Shenzhen ref1 Zhongguancun Innovation Way (Z-innoway) ref1 China Mobile ref1 China Telecom ref1 China Unicom ref1 Cisco Systems facilities of ref1 cloud computing ref1, ref2 Coalition Government immigration policy of ref1, ref2 coffee shops culture of ref1 cyber cafes ref1 growth of market ref1 Commonwealth migration from ref1 Companies House ref1 Confederation of British Industry (CBI) ref1, ref2 personnel of ref1 Confucianism ref1 Conservative Party ref1 Cooper, Wayne ref1 Corporation of London ref1, ref2, ref3 Crafts, Nick ref1 creative economy ref1 Cridland, John leader of CBI ref1 Cromwell, Oliver ref1 Crow, Bob ref1 Daily Mail ref1 Danone ref1 Danticat, Edwidge ref1 Davis, Charles ref1 Decoded ref1 Deloitte ref1 deregulation of financial markets (1986) ref1 digital economy ref1, ref2, ref3, ref4 emergence of ref1, ref2 role of creativity in ref1 Dorling, Danny ref1 Dunne, Ronan CEO of O2 (UK) ref1 Durden, Tyler ref1 Economic Journal, The ref1, ref2 Economist, The ref1, ref2, ref3 Edinburgh University ref1 Eggers, Dave Circle, The (2013) ref1 Egypt Cairo ref1 share of GDP ref1 employment ref1 growth ref1 immigrant labour ref1 in FWE ref1, ref2, ref3, ref4 job creation ref1 low-skilled jobs ref1 public sector 1112 science, technology, engineering and mathematics (STEM) ref1 growth of ref1 shortages ref1 end user demand ref1 Engels, Friedrich ref1 Entrepreneurs for the Future (E4F) ref1 entrepreneurship ref1, ref2, ref3 e.Republic Center for Digital Government and Digital Communities Digital Cities award programme ref1, ref2 Esquire (magazine) ref1 European Economic Area (EEA) ref1 migrants from ref1 contribution to fiscal system ref1 migrants from outside ref1 contribution to fiscal system ref1 European Union (EU) free movement of labour in ref1 member states of ref1, ref2, ref3 taxation regulations ref1 Eurostar ref1 Eurozone ref1, ref2 Crisis (2009–) ref1, ref2, ref3 economy ref1 Facebook ref1, ref2, ref3, ref4 IPO of ref1 Falmouth University ref1 Fan, Donald Senior Director for Office for Diversity of Walmart ref1 FanDuel ref1 Farage, Nigel leader of UKIP ref1 feudalism ref1 financial services ref1, ref2, ref3, ref4, ref5 lifestyles associated with ref1, ref2 Financial Times (FT) ref1 FT Global Top 500 Companies ref1 Fintech ref1 First World War (1914–18) ref1 fiscal transfer ref1, ref2, ref3 net ref1 potential use to cover local deficits ref1 Flat White Economy (FWE) ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10, ref11, ref12, ref13, ref14, ref15, ref16, ref17 advantages of immigration for ref1, ref2, ref3 business model for ref1 development and growth of ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9 employment in ref1, ref2, ref3, ref4 shortages ref1 impact on UK economy ref1, ref2 model of ref1, ref2, ref3 replicating ref1-ref2 role of creativity in ref1 startups in ref1 business model ref1 Flat Whiters ref1 accommodation data for ref1 social culture of ref1 fashion ref1 nightlife ref1 transport ref1 technology used by ref1 Forbes (magazine) ref1 France ref1 education system of ref1 Paris ref1, ref2, ref3 share of GDP ref1 Paris-Sarclay ref1 creation of (2006) ref1 potential limitations of ref1 promotion of ICT in ref1 Forst and Sullivan ref1 France ref1, ref2 Freeman, Prof Christopher ref1 Fujitsu Ltd. ref1 Funding Circle ref1 Gates, Bill ref1 Germany ref1, ref2, ref3 Berlin ref1 economy of ref1 Glaeser, Edward ref1 Triumph of the City, The ref1 Global Financial Crisis (2007–9) ref1, ref2 Banking Crises (2008) ref1 impact on migration ref1 UK recession (2008–9) ref1 Global Innovation Index ref1 globalisation ref1, ref2, ref3 Glyn, Andrew ref1 Goodison, Sir Nicholas Chairman of the Stock Exchange ref1 Google, Inc. ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 acquisitions made by ref1 development kits ref1 offices of ref1, ref2 Greater London Authority (GLA) ref1, ref2 Green Party members of ref1 Gröningen Growth and Development Centre ref1 Guardian, The ref1, ref2, ref3 Harbron, Rob ref1, ref2 Harrison, Andy Chief Executive of Whitbread ref1 Harvard Business School ref1 Harvard University Harvard Lab for Computer Graphics and Spatial Analysis ref1 HCL Technologies ref1 Heisnberg, Werner uncertainty principle ref1 Hewlett-Packard Company (HP) ref1 Huawei Technologies ref1 immigration ref1, ref2, ref3, ref4, ref5, ref6 advantages for FWE ref1, ref2, ref3 economic impact of ref1, ref2 impact on social cohesion ref1 impact on wages ref1 legislation ref1 access to state benefits ref1 quota systems ref1 non-EEA ref1, ref2 restrictions on ref1, ref2, ref3 Imperial College, London facilities of ref1 India ref1, ref2 Calcutta ref1 IT sector of ref1 Karnataka ref1 Bangalore ref1, ref2, ref3, ref4 Electronics City ref1 Mumbai ref1 inequality ref1 potential role of London in ref1, ref2 sources of wealth ref1 Infosys Ltd ref1 initial public offering (IPOs) ref1 innovation ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 hubs ref1, ref2 independent ref1 investments in ref1 projects ref1 Institute for Public Policy Research ref1 intellectual property protection of ref1, ref2 Intel Corporation ref1, ref2, ref3 facilities of ref1 personnel of ref1 International Business Machines (IBM) ref1, ref2 facilities of ref1, ref2, ref3 personnel of ref1, ref2, ref3 internet usage ref1 investment ref1, ref2, ref3 advertising and marketing ref1 capitalising of ref1 in innovation ref1 process of ref1 Israel ref1, ref2 Defence Ministry ref1 Haifa ref1 tech sector of ref1 IT spending ref1, ref2 accounting for ref1 software ref1 Italy ref1 Frascati ref1 Rome ref1 ITC Infotech India Ltd ref1 Japan ref1 economy of ref1 Tokyo ref1 share of GDP ref1 Johnson, Boris Mayor of London ref1, ref2, ref3 Johnson Press plc ref1 Judaism ref1 Kaldor, Nicholas ref1 Keynes, John Maynard ref1 Economic Consequences of the Peace, The ref1 KPMG ref1 labour ref1 division of ref1 immigrant ref1, ref2, ref3, ref4 market ref1 shocks ref1 share of income ref1, ref2 supply of ref1, ref2, ref3, ref4 Labour Party ref1 immigration policies of ref1 Lai, Ian ref1 Laserfiche ref1 Lawson, Nigel ref1 Leeds Beckett University ref1 Level 39 ref1 Liberal Democrats immigration policies of ref1 lifestyles ref1 associated with financial services ref1 Livingstone, Ken ref1 Lloyds ref1 London School of Economics (LSE) ref1 MadRat games ref1 MagnetWorks Engineering ref1 Mahindra Satyam ref1 Mainelli, Michael Gresham Professor of Commerce ref1 Malaysia ref1 Kuala Lumpur ref1 Manchester Science Parks (MSP) ref1 market capitalisation ref1, ref2 market economy ref1 Marx, Karl ref1, ref2 Labour Theory of Value ref1 Marxism ref1 Massachusetts Institute of Technology (MIT) ref1 campuses of ref1 Technology Review ref1, ref2 MasterCard ref1 McAfee, Inc. ref1 McKinsey Global Institute ref1 McQueen, Alexander ref1 McWilliams, Sir Francis ref1 Pray Silence for Jock Whittington (2002) ref1 Medvedev, Dmitry ref1 technology policies of ref1 Metcalfe, Robert ref1 Metcalfe’s Law concept of ref1 Mexico ref1 Mexico City ref1 share of GDP ref1 Microsoft Corporation ref1, ref2, ref3, ref4 facilities of ref1 Future Decoded conference ref1 personnel of ref1 Windows (operating system) ref1 Migration Advisory Committee ref1 Miliband, Ed immigration policies of ref1 MindCandy ref1 Moshi Monsters ref1 offices of ref1 Mitsui Chemicals ref1 Mohan, Mukund CEO of Microsoft Ventures in India ref1 Mongolia Ulan Bator ref1 Moore, Gordon Earle Moore’s Law ref1 MphasiS ref1 National Institute of Economic and Social Research (NIESR) ref1, ref2 Netherlands Amsterdam ref1 network effects ref1 relationship with supereconomies of scale ref1 Network Rail offices of ref1 New Scientist ref1 New Statesman ref1 Nitto Denko ref1 Nokia Oyj ref1 O2 (Telefónica UK Limited) ref1 offices of ref1 personnel of ref1 Office of Communications (Ofcom) ref1 Olympic Games (2012) ref1, ref2 online shopping ref1, ref2 Organisation for Economic Cooperation and Development (OECD) ref1, ref2, ref3, ref4 Osborne, George ref1 Outblaze ref1 Pareto Principle concept of ref1 Passenger Demand Forecasting Council ref1 PayPal ref1 PCCW ref1 Poland accession to EU (2004) ref1 Pollock, Erskine ref1 Procter & Gamble Co. ref1 property markets ref1, ref2 commercial ref1, ref2 housebuilding ref1, ref2 house/property prices ref1, ref2, ref3, ref4 property crisis (2007) ref1 residential ref1 use of bonuses in ref1 public spending ref1, ref2, ref3 Barnett formula ref1 relationship with taxation ref1 Qualcomm facilities of ref1 Reinartz, Werner ref1 Republic of Ireland ref1 research and development (R&D) ref1, ref2, ref3 definitions of ref1, ref2 expenditure ref1, ref2 hubs ref1, ref2 industrial ref1 Research Council for the Arts and Humanities ‘Diasporas, Migration and Identities’ ref1 Rogers, Everett Diffusion of Innovations (1962) ref1 Russian Federation ref1 economy of ref1 Defence Ministry ref1 Moscow ref1, ref2 Skolkovo Innovation Centre ref1, ref2 Saffert, Peter ref1 sales and advertising ref1 Sarkozy, Nicolas technology policies of ref1 Scottish Media Group (STV) ref1 Second World War (1939–45) Blitz, The (1940–1) ref1 shared accommodation ref1 Silicon Canal ref1 Silicon Roundabout ref1, ref2, ref3, ref4, ref5 Silicon Valley ref1, ref2, ref3, ref4, ref5, ref6 role of US government defence spending in development of ref1 social culture of ref1 Silva, Rohan Senior Policy Advisor to David Cameron ref1 Singapore ref1, ref2, ref3, ref4 government of ref1 Research, Innovation and Enterprise Plan (RIE 2015) ref1 research centres of ref1 A*Star Biopolis ref1 Fusionopolis ref1 Campus for Research Excellence and Technological Enterprise (Create) ref1 CleanTech Park ref1 Singapore Science Park ref1 Tuas Biomedical Park ref1 skills drain ref1 Skyscanner ref1 small- and medium-sized businesses (SMBs) ref1 small- and medium-sized enterprises (SMEs) ref1 Small Business Service Household Survey of Entrepreneurship ref1 Smith, Adam Wealth of Nations, The ref1 Smith, Michael Acton founder of MindCandy ref1 Social Democratic Party (SDP) formation of (1981) ref1 social media ref1 restrictions on ref1 Solow, Robert ref1 South Africa Johannesburg share of GDP ref1 South East Regional Assembly ref1 South Korea Seoul ref1 share of GDP ref1 Spain Barcelona ref1 Ibiza ref1 Sprint Corporation ref1 startups ref1 business models of ref1 in FWE ref1 Stigler, George ref1 supereconomies of scale concept of ref1 relationship with network effects ref1 Sweden Stockholm share of GDP ref1 Tata Consultancy Services ref1 taxation ref1, ref2, ref3, ref4, ref5 allowance ref1 corporation ref1 EU regulations ref1 National Insurance ref1, ref2, ref3 regional variation of ref1 relationship with public spending ref1 Tech City ref1, ref2, ref3 technology clusters ref1, ref2, ref3 identification of ref1 Techstars/Barclays ref1 telecommunications ref1 Thatcher, Margaret ref1, ref2 Thile, Peter ref1 trade unions ref1 Transport for London (TfL) ref1, ref2 UK Independence Party (UKIP) members of ref1, ref2 United Kingdom (UK) ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10 Bath ref1 Birmingham ref1, ref2 Bristol ref1 Cambridge ref1 Cheshire ref1 Civil Service ref1 Department for Business, Innovation and Skills ref1, ref2 Department for Transport ref1 economy of ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9 contribution of creative industries to ref1 growth of ref1, ref2, ref3, ref4, ref5 Edinburgh ref1 GDP per capita ref1, ref2, ref3, ref4, ref5, ref6 Glasgow ref1, ref2 media clusters in ref1 government of ref1, ref2, ref3 Index of Multiple Deprivation ref1 ‘Innovation Report 2014’ ref1 Hounslow ref1 labour market of ref1 Leeds ref1, ref2, ref3 London ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10, ref11, ref12, ref13, ref14, ref15, ref16, ref17, ref18, ref19, ref20, ref21, ref22, ref23 business sector of ref1 Camden ref1, ref2 City Fringes ref1, ref2 City of London ref1, ref2, ref3, ref4, ref5, ref6, ref7 cultural presence of ref1 economy of ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10 migrant labour in ref1 expansion of ref1, ref2, ref3 GDP per capita ref1, ref2 GVA of ref1, ref2, ref3 Hackney ref1, ref2, ref3 Haringey ref1, ref2 Islington ref1, ref2 Old Street ref1, ref2, ref3, ref4, ref5, ref6 share of national GDP ref1 Shoreditch ref1, ref2, ref3, ref4 Tower Hamlets ref1 transport infrastructure of ref1 Crossrail ref1 Westminster ref1, ref2, ref3 Manchester ref1, ref2, ref3 Midlands ref1 Milton Keynes ref1, ref2 Newbury ref1 Newcastle ref1 Northern Ireland ref1 Northampton ref1 Office for National Statistics (ONS) ref1 Oxford ref1 Parliament House of Commons ref1 House of Lords ref1 pub industry of ref1 Reading ref1 Salford ref1 Slough ref1 United States of America (USA) ref1, ref2, ref3, ref4 Baltimore, MD ref1 Boston, MA ref1, ref2 Buffalo, NY ref1 Cambridge, MA ref1 Chicago, IL ref1 Columbus, OH ref1 Detroit, MI ref1 economy of ref1 government of ref1, ref2 Irving, TX ref1 Jacksonville, FL ref1 Los Angeles, CA ref1 Minneapolis, MN ref1 Nashville, TN ref1 New York City, NY ref1, ref2, ref3, ref4 New York Stock Exchange (NYSE) ref1 Palo Alto, CA ref1 Portland, OR ref1, ref2 Raleigh, NC ref1 Salt Lake City, UT ref1 San Diego, CA ref1 San Francisco, CA ref1 Seattle, WA ref1, ref2 Washington DC ref1 Winston-Salem, NC ref1 University of Chicago faculty of ref1, ref2 University of London ref1 University of Sussex faculty of ref1 venture capital ref1, ref2 Visa facilities of ref1 Vodafone offices of ref1 wages ref1, ref2, ref3, ref4, ref5, ref6 depression of ref1, ref2 growth of ref1 impact of immigration on ref1 low ref1, ref2 Walmart personnel of ref1, ref2 Waze acquired by Google ref1 We Are Apps ref1 Whitbread Costa Coffee ref1 personnel of ref1 Wikipedia ref1 Wilson, Harold ref1 administration of ref1 Wipro Technologies ref1 Wired (magazine) ref1 Woolfe, Steven UKIP spokesman on migration and financial affairs ref1 World Bank ref1 Xiaomi ref1 Yorkshire Post, The ref1 ZopNow ref1


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The Great Divergence: America's Growing Inequality Crisis and What We Can Do About It by Timothy Noah

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assortative mating, autonomous vehicles, blue-collar work, Bonfire of the Vanities, Branko Milanovic, call centre, collective bargaining, computer age, corporate governance, Credit Default Swap, David Ricardo: comparative advantage, Deng Xiaoping, Erik Brynjolfsson, feminist movement, Frank Levy and Richard Murnane: The New Division of Labor, Gini coefficient, Gunnar Myrdal, income inequality, industrial robot, invisible hand, job automation, Joseph Schumpeter, low skilled workers, lump of labour, manufacturing employment, moral hazard, oil shock, pattern recognition, Paul Samuelson, performance metric, positional goods, post-industrial society, postindustrial economy, Powell Memorandum, purchasing power parity, refrigerator car, rent control, Richard Feynman, Richard Feynman, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, Stephen Hawking, Steve Jobs, The Spirit Level, too big to fail, trickle-down economics, Tyler Cowen: Great Stagnation, union organizing, upwardly mobile, very high income, Vilfredo Pareto, War on Poverty, We are the 99%, women in the workforce, Works Progress Administration, Yom Kippur War

Only impersonally delivered services can be moved offshore.21 Impersonally delivered services bear some similarity to, but are not exactly the same as, jobs requiring “rule-based logic,” which, as noted in the previous chapter, are the jobs that the MIT economist Frank Levy and the Harvard economist Richard Murnane deem most vulnerable to automation. But impersonally delivered services include a lot more high-skill jobs (though they include lots of low-skill jobs, too). Securities analysis (high-skill) can be delivered remotely; so can keyboard entry (low-skill), radiology (high-skill), and customer complaint centers. Governments have become enthusiastic exporters of service jobs, though in the United States it’s typically done through private-sector subcontractors. In Albert Brooks’s 2006 film Looking for Comedy in the Muslim World, Brooks is seen repeatedly walking past a call center in Delhi, allowing us to hear a sequence of increasingly outlandish salutations capped finally by “This is the White House.

But as the world’s second-most-populous nation (1.2 billion), India is, like China, a rich country whose people are poor, with a per capita annual income of $1,340. How the offshoring of service jobs affects income inequality depends on how many of Robert Reich’s “symbolic analysts” end up delivering services impersonally from Bangalore or someplace like it. In a 2009 paper, Blinder took a closer look at the skill question and concluded that slightly more high-skill jobs than low-skill jobs were vulnerable to getting shipped offshore in the future. Managers and lawyers, he found, will be harder to offshore than employees and paralegals, but in the sciences and engineering higher skills will make workers more offshorable. Computer operators (low) are difficult to offshore; computer engineers (high) are less difficult; and computer scientists (high) aren’t difficult at all. The two most offshorable jobs, Blinder calculated, were computer programming (high) and data entry (low).

Karen Akers, interview with author, Aug. 13, 2011. 12. “Tellers,” in Occupational Outlook Handbook, 2010–2011 Edition (Washington: U.S. Bureau of Labor Statistics, 2010), at http://www.bls.gov/oco/ocos126.htm: Bureau of Labor Statistics, Occupational Employment Statistics Survey, National Employment and Wage data, May 2010. At http://www.bls.gov/news.release/ocwage.t01.htm. 13. David Autor and David Dorn, “The Growth of Low-Skill Service Jobs and the Polarization of the U.S. Labor Market,” June 2011, at http://www.cemfi.es/~dorn/Autor-Dorn-LowSkillServices-Polarization.pdf; and David Autor, interview with author, June 7, 2010. 14. Harry Holzer, Julia I. Lane, David Rosenblum, and Fredrik Andersson, Where Are All the Good Jobs Going?: What National and Local Job Quality and Dynamics Mean for U.S. Workers (New York: Russell Sage Foundation, 2011); Harry Holzer, “Is the Middle of the U.S.


pages: 261 words: 10,785

The Lights in the Tunnel by Martin Ford

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Albert Einstein, Bill Joy: nanobots, Black-Scholes formula, call centre, cloud computing, collateralized debt obligation, commoditize, creative destruction, credit crunch, double helix, en.wikipedia.org, factory automation, full employment, income inequality, index card, industrial robot, inventory management, invisible hand, Isaac Newton, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, knowledge worker, low skilled workers, mass immigration, moral hazard, pattern recognition, prediction markets, Productivity paradox, Ray Kurzweil, Search for Extraterrestrial Intelligence, Silicon Valley, Stephen Hawking, strong AI, superintelligent machines, technological singularity, Thomas L Friedman, Turing test, Vernor Vinge, War on Poverty

There is an ongoing trend toward concentration of income that is driven largely by the continuing advance of automation technology and globalization, and also by a lack of progressive tax policies. Many people might argue that increasing income inequality is caused primarily by a “skill premium.” In other words, in the modern, technological economy, people who are highly educated and skilled have a significant advantage in the labor force. While this has been true so far, it is largely because relatively low skill jobs have been the first to be automated and also the first to be subjected to the full force of globalization. As we saw in Chapter 2, advancing automation technology will increasingly threaten highly paid knowledge workers with college educations. These jobs will also, of course, be subject to offshoring. Clear evidence of these trends is already apparent in information technology (IT) jobs, and we can expect this to become much more broad- based in the future.


pages: 523 words: 111,615

The Economics of Enough: How to Run the Economy as if the Future Matters by Diane Coyle

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accounting loophole / creative accounting, affirmative action, bank run, banking crisis, Berlin Wall, bonus culture, Branko Milanovic, BRICs, call centre, Cass Sunstein, central bank independence, collapse of Lehman Brothers, conceptual framework, corporate governance, correlation does not imply causation, Credit Default Swap, deindustrialization, demographic transition, Diane Coyle, disintermediation, Edward Glaeser, endogenous growth, Eugene Fama: efficient market hypothesis, experimental economics, Fall of the Berlin Wall, Financial Instability Hypothesis, Francis Fukuyama: the end of history, George Akerlof, Gini coefficient, global supply chain, Gordon Gekko, greed is good, happiness index / gross national happiness, Hyman Minsky, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, income inequality, income per capita, industrial cluster, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jane Jacobs, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, light touch regulation, low skilled workers, market bubble, market design, market fundamentalism, megacity, Network effects, new economy, night-watchman state, Northern Rock, oil shock, Pareto efficiency, principal–agent problem, profit motive, purchasing power parity, railway mania, rising living standards, Ronald Reagan, selective serotonin reuptake inhibitor (SSRI), Silicon Valley, South Sea Bubble, Steven Pinker, The Design of Experiments, The Fortune at the Bottom of the Pyramid, The Market for Lemons, The Myth of the Rational Market, The Spirit Level, transaction costs, transfer pricing, tulip mania, ultimatum game, University of East Anglia, web application, web of trust, winner-take-all economy, World Values Survey, zero-sum game

Alan Blinder showed that offshorable jobs in the United States had suffered an estimated 13 percent wage penalty as of 2004.31 Another study found a 1 percentage point increase in the low-wage import share is associated with a 2.8 percent decline in blue-collar wages.32 On balance, however, the technical change explanation emerges as the most important driver of increasing income inequality.33 This is not the popular perception. When a factory or call center closes in the United States and reopens in China or India, or when cheap clothing imports put domestic manufacturers out of business because they can’t compete, or when immigrant workers seem to bid down wages for low-skill jobs in the neighborhood, it seems pretty obvious that globalization is the culprit for the fact that low-income families have been faring poorly in recent decades. There is indeed evidence that globalization has played a part in the inequality trends described here. But even though no one is smashing computer terminals the way the Luddites in nineteenth-century England smashed the newfangled textile machinery that was destroying cottage industry, the evidence suggests that a larger part has been played by technological change.

These “winner take all” markets have spread superstar pay to many other sectors of the economy, outside sport and the performing arts where they were originally observed.35 Moreover, this trend means that the increase in inequality due to skills and technology has what is known as a “fractal” character, which means that it is occurring within categories as well as in the overall income distribution: top lawyers’ pay has risen relative to those on low incomes; but the top top lawyers have pulled further ahead of the average top lawyer too.36 So to sum up, structural changes in the economy driven by new technologies are the fundamental driver of greater inequality, in much the same way that the wave of innovation of early capitalism in the nineteenth century led to great inequality until the workforce as a whole developed the new skills that were needed. Technology has interacted with globalization to exacerbate the trend toward greater inequality, contributing to income inequality within countries through the move of low and medium skill jobs overseas, and creating a rich global elite. The failure of some of the poorest countries to participate at all in these economic trends has made greater inequality a global phenomenon. These structural changes have been universal.37 The extent of the increase in inequality varies between countries depending on the scope of structural economic change they have experienced. In some countries there have also been specific changes in social norms and political conditions that have amplified the increase in inequality, as discussed above.

What’s more, the big increase in international migration from about the mid-1990s has brought about quite widespread anti-immigrant sentiment in countries ranging from Sweden and Italy to the Anglo-Saxon lands, such as Australia, the United States, and United Kingdom. Some of this is understandable concern about competition for scarce housing, for example, or pressure on health services and schools, or the impact on the native-born in low-skill jobs, and their wage levels. Few studies in key destination countries for international migration such as the United States, United Kingdom, Australia, and Ireland have found any large economic impacts from increased migration at all—the most frequent finding is that there is some small downward pressure on the wages (in real terms) of the native-born low skilled. In general the evidence doesn’t indicate any other negative economic impacts of significant size.


pages: 484 words: 104,873

Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford

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3D printing, additive manufacturing, Affordable Care Act / Obamacare, AI winter, algorithmic trading, Amazon Mechanical Turk, artificial general intelligence, assortative mating, autonomous vehicles, banking crisis, basic income, Baxter: Rethink Robotics, Bernie Madoff, Bill Joy: nanobots, call centre, Capital in the Twenty-First Century by Thomas Piketty, Chris Urmson, Clayton Christensen, clean water, cloud computing, collateralized debt obligation, commoditize, computer age, creative destruction, debt deflation, deskilling, diversified portfolio, Erik Brynjolfsson, factory automation, financial innovation, Flash crash, Fractional reserve banking, Freestyle chess, full employment, Goldman Sachs: Vampire Squid, Gunnar Myrdal, High speed trading, income inequality, indoor plumbing, industrial robot, informal economy, iterative process, Jaron Lanier, job automation, John Markoff, John Maynard Keynes: technological unemployment, John von Neumann, Kenneth Arrow, Khan Academy, knowledge worker, labor-force participation, labour mobility, liquidity trap, low skilled workers, low-wage service sector, Lyft, manufacturing employment, Marc Andreessen, McJob, moral hazard, Narrative Science, Network effects, new economy, Nicholas Carr, Norbert Wiener, obamacare, optical character recognition, passive income, Paul Samuelson, performance metric, Peter Thiel, Plutocrats, plutocrats, post scarcity, precision agriculture, price mechanism, Ray Kurzweil, rent control, rent-seeking, reshoring, RFID, Richard Feynman, Richard Feynman, Rodney Brooks, secular stagnation, self-driving car, Silicon Valley, Silicon Valley startup, single-payer health, software is eating the world, sovereign wealth fund, speech recognition, Spread Networks laid a new fibre optics cable between New York and Chicago, stealth mode startup, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Steven Pinker, strong AI, Stuxnet, technological singularity, telepresence, telepresence robot, The Bell Curve by Richard Herrnstein and Charles Murray, The Coming Technological Singularity, The Future of Employment, Thomas L Friedman, too big to fail, Tyler Cowen: Great Stagnation, union organizing, Vernor Vinge, very high income, Watson beat the top human players on Jeopardy!, women in the workforce

Even if we set aside the possibility of an actual reduction in the number of these jobs as new technologies emerge, any decline in the rate at which they are created will have dire, cumulative consequences for employment over the long run. Many economists and politicians might be inclined to dismiss this as a problem. After all, routine, low-wage, low-skill jobs—at least in advanced economies—tend to be viewed as inherently undesirable, and when economists discuss the impact of technology on these kinds of jobs, you are very likely to encounter the phrase “freed up”—as in, workers who lose their low-skill jobs will be freed up to pursue more training and better opportunities. The fundamental assumption, of course, is that a dynamic economy like the United States will always be capable of generating sufficient higher-wage, higher-skill jobs to absorb all those newly freed up workers—given that they succeed in acquiring the necessary training.


pages: 559 words: 169,094

The Unwinding: An Inner History of the New America by George Packer

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Affordable Care Act / Obamacare, Apple's 1984 Super Bowl advert, bank run, big-box store, citizen journalism, cleantech, collateralized debt obligation, collective bargaining, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, diversified portfolio, East Village, El Camino Real, Elon Musk, family office, financial independence, financial innovation, fixed income, Flash crash, Henry Ford's grandson gave labor union leader Walter Reuther a tour of the company’s new, automated factory…, housing crisis, income inequality, informal economy, Jane Jacobs, life extension, Long Term Capital Management, low skilled workers, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, market fundamentalism, Maui Hawaii, Menlo Park, Neil Kinnock, new economy, New Journalism, obamacare, Occupy movement, oil shock, peak oil, Peter Thiel, Ponzi scheme, Richard Florida, Robert Bork, Ronald Reagan, Ronald Reagan: Tear down this wall, shareholder value, side project, Silicon Valley, Silicon Valley startup, single-payer health, smart grid, Steve Jobs, strikebreaker, The Death and Life of Great American Cities, the scientific method, too big to fail, union organizing, urban planning, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, white picket fence, zero-sum game

., f/k/a Countrywide Home Loans Servicing, L.P. v. Jack E. Hamersma dragged on, and Jack continued to live in his house, until, two months later, he died there. * * * Weidner’s head was always about to explode. His mind filled with visions of a decadent kleptocracy in rapid decline, abetted by both political parties—America’s masses fed on processed poison bought with a food stamp swipe card, low-skill workers structurally unable to ever contribute again and too dumb to know their old jobs weren’t coming back, the banks in Gotham leeching the last drops of wealth out of the country, corporations unrestrained by any notion of national interest, the system of property law in shambles, the world drowning in debt. He was an NRA member with a concealed weapons permit, and he kept a Smith & Wesson AR-15 semiautomatic rifle with three forty-round clips at his bedside, but it didn’t make him feel safer, in fact it scared the shit out of him, because he saw the orgies of collectors at gun shows and knew how many of his fellow Floridians were armed: constitutional patriots like himself, military vets and sportsmen in camo, and tattooed kids from the cities, who looked like the start of militias.


pages: 726 words: 210,048

Hard Landing by Thomas Petzinger, Thomas Petzinger Jr.

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airline deregulation, centralized clearinghouse, collective bargaining, cross-subsidies, desegregation, Donald Trump, feminist movement, index card, low cost carrier, low skilled workers, Marshall McLuhan, means of production, mutually assured destruction, Network effects, offshore financial centre, oil shock, Ponzi scheme, postindustrial economy, price stability, profit motive, Ralph Nader, Ronald Reagan, Silicon Valley, strikebreaker, the medium is the message, The Predators' Ball, Thomas L Friedman, union organizing, yield management, zero-sum game

Convinced that TWA had lost its way, he decided to quit. He was drawn to Bloomingdale’s with the siren promise that he would succeed the incumbent president, Marvin Traub, as chieftain of the retailing giant. But Crandall found retailing exquisitely boring. Inventory automation didn’t begin to approach the intellectual challenge of airline reservations. Nor did he particularly like managing low-wage, low-skill workers. And he perceived a caste system in retailing in which merchants were Brahmans and everybody in the back office was scum. Bob Crandall had to get back to the airline business. It had everything he wanted from a career. Later on he would observe that “the airline business is fast-paced, high-risk, and highly leveraged. It puts a premium on things I like to do. I think I communicate well. And I am very good at detail.


pages: 602 words: 177,874

Thank You for Being Late: An Optimist's Guide to Thriving in the Age of Accelerations by Thomas L. Friedman

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3D printing, additive manufacturing, affirmative action, Airbnb, AltaVista, Amazon Web Services, autonomous vehicles, Ayatollah Khomeini, barriers to entry, Berlin Wall, Bernie Sanders, bitcoin, blockchain, Bob Noyce, business process, call centre, centre right, Chris Wanstrath, Clayton Christensen, clean water, cloud computing, corporate social responsibility, creative destruction, crowdsourcing, David Brooks, demand response, demographic dividend, demographic transition, Deng Xiaoping, Donald Trump, Erik Brynjolfsson, failed state, Fall of the Berlin Wall, Ferguson, Missouri, first square of the chessboard / second half of the chessboard, Flash crash, game design, gig economy, global supply chain, illegal immigration, immigration reform, income inequality, indoor plumbing, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, invention of the steam engine, inventory management, Irwin Jacobs: Qualcomm, Jeff Bezos, job automation, John Markoff, John von Neumann, Khan Academy, Kickstarter, knowledge economy, knowledge worker, land tenure, linear programming, Live Aid, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, mass immigration, Maui Hawaii, Menlo Park, Mikhail Gorbachev, mutually assured destruction, pattern recognition, planetary scale, pull request, Ralph Waldo Emerson, ransomware, Ray Kurzweil, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, South China Sea, Steve Jobs, supercomputer in your pocket, TaskRabbit, Thomas L Friedman, transaction costs, Transnistria, urban decay, urban planning, Watson beat the top human players on Jeopardy!, WikiLeaks, women in the workforce, Y2K, Yogi Berra, zero-sum game

–Mexico border, with both more physical fencing and virtual fencing with sensors, drones, and televisions. Americans need to believe that they live in a country where the borders are controlled. But they also need to understand that to thrive as a country we need a steady flow of legal immigration. Our ability as a country to embrace diversity is one of our greatest competitive advantages. We need to control low-skilled immigration so our own low-skilled workers are not priced out of jobs, while removing all limits on H-1B visas for foreign high-skilled knowledge workers. We should also double the research funding for all of our national labs and institutes of health to drive basic research. Nothing would spin off more new good jobs and industries than that combination of more basic research and more knowledge workers. 7. To ensure that next-generation Internet services are developed in America, she would put in place new accelerated tax incentives and eliminate regulatory barriers to rapidly scale up the deployment of superfast bandwidth—for both wire line and wireless networks.


pages: 781 words: 226,928

Commodore: A Company on the Edge by Brian Bagnall

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Apple II, belly landing, Bill Gates: Altair 8800, Byte Shop, Claude Shannon: information theory, computer age, Douglas Engelbart, Douglas Engelbart, Firefox, game design, index card, inventory management, Isaac Newton, low skilled workers, Menlo Park, packet switching, pink-collar, popular electronics, prediction markets, pre–internet, QWERTY keyboard, Robert Metcalfe, Robert X Cringely, Silicon Valley, special economic zone, Steve Jobs, Steve Wozniak, Ted Nelson

He did this other thing where he would rub on a chip with a pink pencil eraser and it would start working again for a few seconds, and then it would go away and he knew that was the bad chip. I said, ‘This is voodoo, man.’” Although the Cuban technician lacked Seiler’s university background, he was often very effective at repairing the boards. “He fixed more boards than I did,” says Seiler. Dozens of low-skilled workers assembled the game machines, turning out dozens every day. “It was all these crazy Cubans building these pinball machines,” says Seiler. “I think part of the Cuban language is spoken with hammer.” The high failure rate of many electromechanical games was the result of over complexity at the design level by Seiler’s mentor. “The guy I was working with down there was a Cuban guy. He dressed like John Travolta in Saturday Night Fever.

The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley by Leslie Berlin

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Apple II, Bob Noyce, collective bargaining, computer age, George Gilder, informal economy, John Markoff, laissez-faire capitalism, low skilled workers, means of production, Menlo Park, Murray Gell-Mann, open economy, Richard Feynman, Richard Feynman, Ronald Reagan, Sand Hill Road, Silicon Valley, Silicon Valley startup, Steve Jobs, Steve Wozniak, union organizing, War on Poverty, women in the workforce, Yom Kippur War

They could have lenses ground at a company a few miles down the road. It was hard to believe that only two years before, Moore needed to build his own furnaces and Noyce had to scrounge for photolithography lenses at a camera shop.63 Sweeping developments unrelated to electronics also benefited Fairchild Semiconductor and Bob Noyce. The increasing mechanization of agriculture in California freed up thousands of low-skilled workers for work in electronics assembly plants. An aggressive state-sponsored infrastructure-building spree changed zoning regulations and installed a network of roads and sewer pipes to attract people and industry to California. In the two decades after the end of the Second World War, the state of California also established its consolidated system of 9 universities, 19 colleges, and 106 community colleges, which could provide an educated workforce for high-tech industry.64 Noyce had never before felt as at home in a place as he did in this patch of California, where so much was new, and life changed so quickly.


pages: 558 words: 168,179

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer

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affirmative action, Affordable Care Act / Obamacare, American Legislative Exchange Council, anti-communist, Bakken shale, bank run, battle of ideas, Berlin Wall, Capital in the Twenty-First Century by Thomas Piketty, carried interest, centre right, clean water, Climategate, Climatic Research Unit, collective bargaining, corporate raider, crony capitalism, David Brooks, desegregation, diversified portfolio, Donald Trump, energy security, estate planning, Fall of the Berlin Wall, George Gilder, housing crisis, hydraulic fracturing, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, job automation, low skilled workers, mandatory minimum, market fundamentalism, mass incarceration, Mont Pelerin Society, More Guns, Less Crime, Nate Silver, New Journalism, obamacare, Occupy movement, offshore financial centre, oil shale / tar sands, oil shock, Plutocrats, plutocrats, Powell Memorandum, Ralph Nader, Renaissance Technologies, road to serfdom, Ronald Reagan, school choice, school vouchers, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, the scientific method, University of East Anglia, Unsafe at Any Speed, War on Poverty, working poor

“constitutional limitations”: David Edwards, “NC GOP Bills Would Require Teaching Koch Principles While Banning Teachers’ Political Views in Class,” Raw Story, April 29, 2011. “I was a Republican”: Jim Goodmon, interview with author, which first appeared in Mayer, “State for Sale.” opposition to minimum wage laws: In an interview with the author, Roy Cordato, a vice president at the John Locke Foundation, argued that “the minimum wage hurts low-skilled workers, by pricing them out of the market,” and that concern about worker exploitation was “the kind of thinking that comes from Karl Marx.” In Cordato’s view, “any freely made contracts among consenting adults should be legal,” including those involving prostitution and the sale of dangerous drugs. He said he supported child-labor laws but opposed what he called “compulsory education” for minors.


pages: 223 words: 10,010

The Cost of Inequality: Why Economic Equality Is Essential for Recovery by Stewart Lansley

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banking crisis, Basel III, Big bang: deregulation of the City of London, Bonfire of the Vanities, borderless world, Branko Milanovic, Bretton Woods, British Empire, business process, call centre, capital controls, collective bargaining, corporate governance, corporate raider, correlation does not imply causation, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, deindustrialization, Edward Glaeser, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, Goldman Sachs: Vampire Squid, high net worth, hiring and firing, Hyman Minsky, income inequality, James Dyson, Jeff Bezos, job automation, John Meriwether, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, laissez-faire capitalism, light touch regulation, Long Term Capital Management, low skilled workers, manufacturing employment, market bubble, Martin Wolf, mittelstand, mobile money, Mont Pelerin Society, Myron Scholes, new economy, Nick Leeson, North Sea oil, Northern Rock, offshore financial centre, oil shock, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, Right to Buy, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, shareholder value, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, Tyler Cowen: Great Stagnation, Washington Consensus, Winter of Discontent, working-age population

As in the UK, there has been a decline in the income position of the middle class, while as the British economist George Irvin has written, ‘a large number of American families live above the poverty line but below the middle-class “threshold”; ie, have a family income of between $20,000 and $40,000.’ The American sociologist, Katherine Newman, has called this group the ‘missing class’ or the ‘near poor’ and estimates their size at 57 million, a group at high risk of poverty caused by job loss or illness.119 As in the UK, it is a trend that has been underway since the early 1980s. There has been a continuing growth in jobs that pay well and require high skill, and in lowwage, low-skill jobs, but thanks to de-industrialisation, off-shoring and the impact of technology, ‘middle-tier’ jobs have been on the wane. 120 Some former industrial heartlands like Detroit, the once thriving metropolis where Henry Ford built his first mass production plant in 1913, is now little more than a ghost town with row upon row of derelict factories and street after street of abandoned homes. In the UK, the vanishing middle is especially apparent in the once prosperous industrial heartlands in the Midlands, the North East and South Wales, areas which have been shorn of decently paid, secure work.


pages: 291 words: 81,703

Average Is Over: Powering America Beyond the Age of the Great Stagnation by Tyler Cowen

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Amazon Mechanical Turk, Black Swan, brain emulation, Brownian motion, Cass Sunstein, choice architecture, complexity theory, computer age, computer vision, computerized trading, cosmological constant, crowdsourcing, dark matter, David Brooks, David Ricardo: comparative advantage, deliberate practice, Drosophila, en.wikipedia.org, endowment effect, epigenetics, Erik Brynjolfsson, eurozone crisis, experimental economics, Flynn Effect, Freestyle chess, full employment, future of work, game design, income inequality, industrial robot, informal economy, Isaac Newton, John Markoff, Khan Academy, labor-force participation, Loebner Prize, low skilled workers, manufacturing employment, Mark Zuckerberg, meta analysis, meta-analysis, microcredit, Myron Scholes, Narrative Science, Netflix Prize, Nicholas Carr, pattern recognition, Peter Thiel, randomized controlled trial, Ray Kurzweil, reshoring, Richard Florida, Richard Thaler, Ronald Reagan, Silicon Valley, Skype, statistical model, stem cell, Steve Jobs, Turing test, Tyler Cowen: Great Stagnation, upwardly mobile, Yogi Berra

Average Is Over builds upon these influential works and attempts to go beyond them in terms of detail and breadth. In these pages I paint a vision of a future which at first appears truly strange, but at least to me is also discomfortingly familiar and indeed intuitive. As a blogger and economics writer, I find that the question I receive most often from readers is—by far—something like: “What will the low- and mid-skilled jobs of the future look like?” This question is on everyone’s mind with a new urgency but it goes back to David Ricardo and Charles Babbage in the nineteenth century. Ricardo was a leading economist of his time who wrote on “the machinery question,” while Babbage was the intellectual father of the modern computer and he—not coincidentally—also wrote on how radical mechanization was going to reshape work.

Here is what the trend for the United States looks like: © Federal Reserve Bank of Cleveland (Redrawn by Daniel Lagin) If there is one picture that sums up the dilemma of our contemporary economy, it is that one. Of course, there is a lot going on within the category of labor earnings. The longer-term trend is fewer jobs in middle-skill, white-collar clerical, administrative, and sales occupations. Demand is rising for low-pay, low-skill jobs, and it is rising for high-pay, high-skill jobs, including tech and managerial jobs, but pay is not rising for the jobs in between. This is not just a story about America, as broadly similar patterns are occurring in the major industrialized nations of Europe. In sixteen major European nations, from 1993 to 2006, middle-wage occupations declined as a share of employment. In thirteen of those sixteen countries, high-wage occupations increased as a share of employment.


pages: 296 words: 76,284

The End of the Suburbs: Where the American Dream Is Moving by Leigh Gallagher

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Airbnb, big-box store, Burning Man, call centre, car-free, Celebration, Florida, clean water, collaborative consumption, Columbine, commoditize, crack epidemic, East Village, edge city, Edward Glaeser, extreme commuting, helicopter parent, Home mortgage interest deduction, housing crisis, Jane Jacobs, low skilled workers, Mark Zuckerberg, McMansion, Menlo Park, mortgage tax deduction, negative equity, New Urbanism, peak oil, Ponzi scheme, Richard Florida, Robert Shiller, Robert Shiller, Sand Hill Road, Seaside, Florida, Silicon Valley, Steve Jobs, Stewart Brand, the built environment, The Death and Life of Great American Cities, Tony Hsieh, transit-oriented development, upwardly mobile, urban planning, urban sprawl, Victor Gruen, walkable city, white flight, white picket fence, young professional, Zipcar

“We think of poverty as a really urban phenomenon or an ultra-rural phenomenon. It’s increasingly a suburban issue,” says Elizabeth Kneebone, Brookings fellow and coauthor of a recent Brookings book on the topic, Confronting Suburban Poverty in America. The reasons for this shift are many. During the growth years of the 1990s and 2000s, low-skill construction and service jobs boomed in the suburbs. Soon immigrants began bypassing cities and immigrating directly to the suburbs and exurbs. But these low-skill jobs were the first to vaporize in the housing bust and ensuing recession. At the same time, the longer-term collapse of the manufacturing industry outside midwestern cities pushed many people into poverty. Some of this is also due to the squeeze on the middle class in general. Indeed, the rapid rise in the poor population in the suburbs in the 2000s can’t be explained simply by more low-income residents moving there; a wide swath of the new suburban poor are longtime suburban residents who weren’t poor in the beginning of the decade but fell below the poverty line as incomes stagnated and home prices increased.


pages: 458 words: 134,028

Microtrends: The Small Forces Behind Tomorrow's Big Changes by Mark Penn, E. Kinney Zalesne

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affirmative action, Albert Einstein, Ayatollah Khomeini, Berlin Wall, big-box store, call centre, corporate governance, David Brooks, Donald Trump, extreme commuting, Exxon Valdez, feminist movement, glass ceiling, God and Mammon, Gordon Gekko, haute couture, hygiene hypothesis, illegal immigration, immigration reform, index card, Isaac Newton, job satisfaction, labor-force participation, late fees, life extension, low skilled workers, mobile money, new economy, RAND corporation, Renaissance Technologies, Ronald Reagan, Rosa Parks, Rubik’s Cube, stem cell, Stephen Hawking, Steve Jobs, Superbowl ad, the payments system, Thomas L Friedman, upwardly mobile, uranium enrichment, urban renewal, War on Poverty, white picket fence, women in the workforce, Y2K

(And by many accounts, they are. In 2006, 1.4 million adults were taking government-subsidized English for Speakers of Other Languages classes, and there were waiting lists in at least fourteen states.) But other factors suggest that the linguistic isolation numbers may not come down so fast. First, because the jobs that draw immigrants to America today, unlike in past decades, are primarily the low-skilled jobs that native-born Americans pass up, today’s immigrants come to America with less foreign language training, and less education generally, than used to be the case. Before 1970, fewer than one-third of foreign-born immigrants to America spoke English “less than very well.” In the 1990s, that proportion was over 60 percent. Second, the myth of dramatic improvement generation by generation doesn’t seem to be holding up.

With the decline of manufacturing jobs, the expectation that women will work outside the home, and a majority of Americans at least starting college, college-educated nannies are suddenly available, and they match the new desires on the part of Moms to have nannies who reflect their own personalities and lifestyles. Child care has had an ambivalent but growing role in the American household, and the glut of college dropouts suggests that we will see a lot of previously low-skilled jobs taken by a new class of worker. (Just ask your massage therapist, hairdresser, or flight attendant the name of her sorority, or what her major was.) And, of course, watch out—and make sure you have a signed nondisclosure agreement—or your family’s private conflicts and shortcomings might get exposed to the world, via the cunning pen of your onetime nanny/liberal arts major from Harvard. Shy Millionaires Americans Who Live Below Their Means Millionaires loom large in our national imagination.


pages: 364 words: 104,697

Were You Born on the Wrong Continent? by Thomas Geoghegan

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Albert Einstein, American Society of Civil Engineers: Report Card, banking crisis, Berlin Wall, Bob Geldof, collective bargaining, corporate governance, cross-subsidies, dark matter, David Brooks, declining real wages, deindustrialization, ending welfare as we know it, facts on the ground, Gini coefficient, haute cuisine, income inequality, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labour market flexibility, laissez-faire capitalism, low skilled workers, Martin Wolf, McJob, minimum wage unemployment, mittelstand, offshore financial centre, Paul Samuelson, payday loans, pensions crisis, Plutocrats, plutocrats, purchasing power parity, Ralph Waldo Emerson, Robert Gordon, Ronald Reagan: Tear down this wall, Saturday Night Live, Silicon Valley, The Wealth of Nations by Adam Smith, Thorstein Veblen, union organizing, Wolfgang Streeck, women in the workforce

Now, the surprising thing is that the hunter/nomad societies had a better diet, a higher quality of life, and the farmer societies had it worse. So why did people move from the hunter/nomad model to the farmer? Simple: the farmer model could sustain a larger population, though at a lower standard of living. Unlike the hunter/nomad model, which produced high-skilled “hunter” jobs but not enough of them, the agrarian model produced a lot of low-skilled jobs, jobs, jobs, or what some would now call “McJobs.” In a sense, while the higher-skilled hunter model led to a better way of life, the farmer model was better at—well, giving people work to do but not with very high rewards. That seemed to echo the U.S./Europe debate. The European model, like the hunter model, may produce better types of jobs, but the U.S. model, like the farmer model, could produce far more jobs.


pages: 168 words: 50,647

The End of Jobs: Money, Meaning and Freedom Without the 9-To-5 by Taylor Pearson

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Airbnb, barriers to entry, Black Swan, call centre, cloud computing, commoditize, creative destruction, David Heinemeier Hansson, Elon Musk, en.wikipedia.org, Frederick Winslow Taylor, future of work, Google Hangouts, Kevin Kelly, Kickstarter, knowledge economy, knowledge worker, loss aversion, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, market fragmentation, means of production, Oculus Rift, passive income, passive investing, Peter Thiel, remote working, Ronald Reagan: Tear down this wall, sharing economy, side project, Silicon Valley, Skype, software as a service, software is eating the world, Startup school, Steve Jobs, Steve Wozniak, Stewart Brand, telemarketer, Thomas Malthus, Uber and Lyft, unpaid internship, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog

The glut of lawyers in the U.S. may be the most obvious example, but even in the traditional STEM fields (science, technology, engineering, and mathematics), which were long considered lock-ins for employment, people with related degrees are struggling harder to find jobs than they were a decade ago. Jobs in almost all industries are becoming increasingly commoditized. It makes sense to us that low-skilled jobs with lower barriers to entry are being affected by globalization and technology, but why is it affecting the more highly-credentialed ones? The Cynefin Framework and Your Career The Cynefin framework23 (pronounced Kih-neh-vihn) was developed by Dave Snowden after studying the management structure at IBM. The framework became popular, and was featured in publications including the Harvard Business Review.24 It divides work and management up in ways that are more effective given the changing nature of work.


pages: 144 words: 43,356

Surviving AI: The Promise and Peril of Artificial Intelligence by Calum Chace

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3D printing, Ada Lovelace, AI winter, Airbnb, artificial general intelligence, augmented reality, barriers to entry, basic income, bitcoin, blockchain, brain emulation, Buckminster Fuller, cloud computing, computer age, computer vision, correlation does not imply causation, credit crunch, cryptocurrency, cuban missile crisis, dematerialisation, discovery of the americas, disintermediation, don't be evil, Elon Musk, en.wikipedia.org, epigenetics, Erik Brynjolfsson, everywhere but in the productivity statistics, Flash crash, friendly AI, Google Glasses, industrial robot, Internet of things, invention of agriculture, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John von Neumann, Kevin Kelly, life extension, low skilled workers, Mahatma Gandhi, means of production, mutually assured destruction, Nicholas Carr, pattern recognition, peer-to-peer, peer-to-peer model, Peter Thiel, Ray Kurzweil, Rodney Brooks, Second Machine Age, self-driving car, Silicon Valley, Silicon Valley ideology, Skype, South Sea Bubble, speech recognition, Stanislav Petrov, Stephen Hawking, Steve Jobs, strong AI, technological singularity, The Future of Employment, theory of mind, Turing machine, Turing test, universal basic income, Vernor Vinge, wage slave, Wall-E, zero-sum game

Some people argue that soon, people automated out of a job may not find new employment, thanks to the rapid advances in machine learning, and the availability of increasingly powerful and increasingly portable computers. MIT professors Andrew McAfee and Erik Brynjolfsson have published two seminal books on the subject: Race Against the Machine, and The Second Machine Age. A report in September 2013 by the Oxford Martin School estimated that 45% of American jobs would disappear in the next 20 years, in two waves. (21) The first would attack relatively low-skilled jobs in transportation and administration. Some of this would come from self-driving vehicles, which are likely to appear on our roads in significant numbers from 2017. Some 30 US cities will be experimenting with self-driving cars by the end of 2016, for instance. (22) There are 3.5 million truck drivers in the US alone, (23) 650,000 bus drivers (24) and 230,000 taxi drivers. (25) There are numerous hurdles to be overcome before all these jobs become vulnerable.


pages: 272 words: 64,626

Eat People: And Other Unapologetic Rules for Game-Changing Entrepreneurs by Andy Kessler

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23andMe, Andy Kessler, bank run, barriers to entry, Berlin Wall, Bob Noyce, British Empire, business process, California gold rush, carbon footprint, Cass Sunstein, cloud computing, collateralized debt obligation, collective bargaining, commoditize, computer age, creative destruction, disintermediation, Douglas Engelbart, Eugene Fama: efficient market hypothesis, fiat currency, Firefox, Fractional reserve banking, George Gilder, Gordon Gekko, greed is good, income inequality, invisible hand, James Watt: steam engine, Jeff Bezos, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, libertarian paternalism, low skilled workers, Mark Zuckerberg, McMansion, Netflix Prize, packet switching, personalized medicine, pets.com, prediction markets, pre–internet, profit motive, race to the bottom, Richard Thaler, risk tolerance, risk-adjusted returns, Silicon Valley, six sigma, Skype, social graph, Steve Jobs, The Wealth of Nations by Adam Smith, transcontinental railway, transfer pricing, wealth creators, Yogi Berra

I can go on and on. My point is this: get rid of humans and you have probably found a rich vein of productivity and therefore wealth. I know, I know, it sounds so awful. So Scrooge-like—fire Tiny Tim’s father on Christmas Eve to generate wealth. Okay, it’s not that bad. That’s the goal of every economy—to increase the standard of living of its participants. If that means over a generation replacing low-skill jobs with higher-skilled careers developing more productive tools, then you are creating wealth for the entire economy. We went from Stone Age to Iron Age to Industrial Age to Space Age and we’re now firmly in the Idea Age. Wealth and success are no longer guaranteed by working long hours climbing the corporate ladder of success at Amalgamated Widgets, hand over hand with knives in the backs of your coworkers.


pages: 230 words: 79,229

Respectable: The Experience of Class by Lynsey Hanley

Berlin Wall, cuban missile crisis, David Brooks, delayed gratification, Etonian, full employment, housing crisis, illegal immigration, invisible hand, liberation theology, low skilled workers, mutually assured destruction, Neil Kinnock, Norman Mailer, Own Your Own Home, Right to Buy, Ronald Reagan, strikebreaker, upwardly mobile, Winter of Discontent

A man without work loses status and confidence, which in turn makes social relations with individuals of higher status tense and awkward. The professional woman, unknowingly basking in her high status, projects an aura of confidence which in turn makes social encounters easier. You can almost imagine her taking him to task like a problem child: ‘I’m nothing to be scared of! I’m as ordinary as you are. Honestly.’ We are no longer an industrial society in which most people are working-class, doing low-skilled jobs. We are increasingly a knowledge-based society in which pay and social esteem are gained chiefly from doing technical and professional jobs for which you need qualifications. No matter that society would cease to function if every manual and service worker simultaneously took the day off: it is easier to pretend that such people and the jobs they do are dispensable, because surely any old chimp could do them.


pages: 296 words: 78,112

Devil's Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency by Joshua Green

4chan, Affordable Care Act / Obamacare, Ayatollah Khomeini, Bernie Sanders, business climate, centre right, collateralized debt obligation, conceptual framework, corporate raider, crony capitalism, currency manipulation / currency intervention, Donald Trump, Fractional reserve banking, Goldman Sachs: Vampire Squid, Gordon Gekko, guest worker program, illegal immigration, immigration reform, liberation theology, low skilled workers, Nate Silver, nuclear winter, obamacare, Peace of Westphalia, Peter Thiel, quantitative hedge fund, Renaissance Technologies, Ronald Reagan, Silicon Valley, speech recognition, urban planning

Stunned by a loss few of them had anticipated, most prominent Republicans concluded that passing comprehensive immigration reform was an existential imperative for the party. In early 2013, the vehicle to do so took shape in what became known as the “Gang of Eight” bill, a bipartisan reform measure led by eight senators that would provide a path to citizenship for the now 11 million immigrants living illegally in the United States, while enlarging guest-worker programs for low-skilled jobs in industries such as agriculture. In what seemed a positive omen, the Gang of Eight bill had the added designation of being a vehicle for the presidential ambitions of Senator Marco Rubio of Florida, the telegenic young Cuban American then considered to be the GOP’s brightest rising star. With Rubio, the darling of Fox News, leading the charge, the bill appeared to have unstoppable momentum.


pages: 701 words: 199,010

The Crisis of Crowding: Quant Copycats, Ugly Models, and the New Crash Normal by Ludwig B. Chincarini

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affirmative action, asset-backed security, automated trading system, bank run, banking crisis, Basel III, Bernie Madoff, Black-Scholes formula, buttonwood tree, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, collective bargaining, corporate governance, correlation coefficient, Credit Default Swap, credit default swaps / collateralized debt obligations, delta neutral, discounted cash flows, diversification, diversified portfolio, family office, financial innovation, financial intermediation, fixed income, Flash crash, full employment, Gini coefficient, high net worth, hindsight bias, housing crisis, implied volatility, income inequality, interest rate derivative, interest rate swap, John Meriwether, labour mobility, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, low skilled workers, margin call, market design, market fundamentalism, merger arbitrage, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, Myron Scholes, negative equity, Northern Rock, Occupy movement, oil shock, price stability, quantitative easing, quantitative hedge fund, quantitative trading / quantitative finance, Ralph Waldo Emerson, regulatory arbitrage, Renaissance Technologies, risk tolerance, risk-adjusted returns, Robert Shiller, Robert Shiller, Ronald Reagan, Sharpe ratio, short selling, sovereign wealth fund, speech recognition, statistical arbitrage, statistical model, survivorship bias, systematic trading, The Great Moderation, too big to fail, transaction costs, value at risk, yield curve, zero-coupon bond

In 2010, trade accounted for 30% of Greece’s economy and nearly 50% of Germany’s economy.7 Demand for goods depends on how competitive they are compared to other countries, with competitiveness measured by the price of a country’s goods, adjusted for the exchange rate, compared to prices in other countries. Suppose that Germany is very productive and can produce goods at low prices, while Greece is not very productive and its prices remain high. German exports will rise relative to Greek exports. This will dampen the Greek economy and boost the German economy, as it should. A similar effect can happen, as the world grows more integrated. Much competition for low-skilled jobs comes from developing countries, and that makes Greek goods relatively uncompetitive in the world’s markets. Figure 18.1 shows Greece’s real exchange rate versus those of Germany, France, and Italy.8 The real exchange rate contains three elements: the average price of a country’s goods, the average price of foreign goods, and the average exchange rate of a currency converting into the other countries' currencies.

The poorest got income growth of 16%, while middle-class income grew just 15%. Since 1967, rich people’s average incomes have grown by 70%. Poor people’s incomes have grown by just 29%. Wall Street and Washington didn’t create this inequality. A variety of factors are at work. More-educated workers have reaped the rewards of technological progress to a greater degree than have less-educated workers. Opening world trade has meant fierce competition for low-skill jobs. The fairy-tale decade misled us into thinking the economy was better than it was. Everyone is to blame. Our next problem is already in the making. The U.S. government is taking on a huge amount of debt, which higher taxes will eventually have to repay. As of 2011, the total national debt is 93% of GDP, while debt held by the public is 62% of GDP.13 As of May 2011, every one of the 311 million U.S. citizens would need to pay $31,000 to eliminate U.S. government debt.


pages: 357 words: 95,986

Inventing the Future: Postcapitalism and a World Without Work by Nick Srnicek, Alex Williams

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3D printing, additive manufacturing, air freight, algorithmic trading, anti-work, back-to-the-land, banking crisis, basic income, battle of ideas, blockchain, Bretton Woods, call centre, capital controls, carbon footprint, Cass Sunstein, centre right, collective bargaining, crowdsourcing, cryptocurrency, David Graeber, decarbonisation, deindustrialization, deskilling, Doha Development Round, Elon Musk, Erik Brynjolfsson, Ferguson, Missouri, financial independence, food miles, Francis Fukuyama: the end of history, full employment, future of work, gender pay gap, housing crisis, income inequality, industrial robot, informal economy, intermodal, Internet Archive, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, late capitalism, liberation theology, Live Aid, low skilled workers, manufacturing employment, market design, Martin Wolf, mass immigration, mass incarceration, means of production, minimum wage unemployment, Mont Pelerin Society, neoliberal agenda, New Urbanism, Occupy movement, oil shale / tar sands, oil shock, patent troll, pattern recognition, Paul Samuelson, Philip Mirowski, post scarcity, postnationalism / post nation state, precariat, price stability, profit motive, quantitative easing, reshoring, Richard Florida, rising living standards, road to serfdom, Robert Gordon, Ronald Reagan, Second Machine Age, secular stagnation, self-driving car, Slavoj Žižek, social web, stakhanovite, Steve Jobs, surplus humans, the built environment, The Chicago School, The Future of Employment, Tyler Cowen: Great Stagnation, universal basic income, wages for housework, We are the 99%, women in the workforce, working poor, working-age population


pages: 317 words: 101,475

Chavs: The Demonization of the Working Class by Owen Jones

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Asperger Syndrome, banking crisis, Berlin Wall, British Empire, call centre, collapse of Lehman Brothers, credit crunch, deindustrialization, Etonian, facts on the ground, falling living standards, first-past-the-post, ghettoisation, Gini coefficient, hiring and firing, housing crisis, Hugh Fearnley-Whittingstall, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, mass immigration, Neil Kinnock, Occupy movement, pension reform, place-making, Plutocrats, plutocrats, race to the bottom, Right to Buy, rising living standards, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, too big to fail, unpaid internship, upwardly mobile, We are the 99%, wealth creators, Winter of Discontent, women in the workforce, working-age population

Ironically, it discovered that those most affected were likely to be former immigrants, because they would be competing for jobs that did not require 'language fluency, cultural knowledge or local experience'. Even so, it found that all workers in manual jobs could see their wages reduced because an employer could easily replace them with a foreign worker willing to accept less. The same was true for workers who were 'marginal to the labour market', those 'most likely to drop out or become discouraged workers', those 'who work in part-time, low-skilled jobs (such as single mothers and young people)', and those who faced barriers to finding work, such as an inability to travel. Clearly, then, attitudes towards immigration are liable to depend on the class of the person who holds them. Indeed, prospective employers stand to gain from cheaper foreign workers. 'The effect of immigration at the bottom of the labour market is different than it is on the people who are so pleased they can get a nice cheap nanny, or someone cheap to do the plumbing,' observes former Labour secretary of state for international development Clare Short.


pages: 339 words: 88,732

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson, Andrew McAfee

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, access to a mobile phone, additive manufacturing, Airbnb, Albert Einstein, Amazon Mechanical Turk, Amazon Web Services, American Society of Civil Engineers: Report Card, Any sufficiently advanced technology is indistinguishable from magic, autonomous vehicles, barriers to entry, basic income, Baxter: Rethink Robotics, British Empire, business intelligence, business process, call centre, Chuck Templeton: OpenTable, clean water, combinatorial explosion, computer age, computer vision, congestion charging, corporate governance, creative destruction, crowdsourcing, David Ricardo: comparative advantage, digital map, employer provided health coverage, en.wikipedia.org, Erik Brynjolfsson, factory automation, falling living standards, Filter Bubble, first square of the chessboard / second half of the chessboard, Frank Levy and Richard Murnane: The New Division of Labor, Freestyle chess, full employment, game design, global village, happiness index / gross national happiness, illegal immigration, immigration reform, income inequality, income per capita, indoor plumbing, industrial robot, informal economy, intangible asset, inventory management, James Watt: steam engine, Jeff Bezos, jimmy wales, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Joseph Schumpeter, Kevin Kelly, Khan Academy, knowledge worker, Kodak vs Instagram, law of one price, low skilled workers, Lyft, Mahatma Gandhi, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Mars Rover, mass immigration, means of production, Narrative Science, Nate Silver, natural language processing, Network effects, new economy, New Urbanism, Nicholas Carr, Occupy movement, oil shale / tar sands, oil shock, pattern recognition, Paul Samuelson, payday loans, price stability, Productivity paradox, profit maximization, Ralph Nader, Ray Kurzweil, recommendation engine, Report Card for America’s Infrastructure, Robert Gordon, Rodney Brooks, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Simon Kuznets, six sigma, Skype, software patent, sovereign wealth fund, speech recognition, statistical model, Steve Jobs, Steven Pinker, Stuxnet, supply-chain management, TaskRabbit, technological singularity, telepresence, The Bell Curve by Richard Herrnstein and Charles Murray, The Signal and the Noise by Nate Silver, The Wealth of Nations by Adam Smith, total factor productivity, transaction costs, Tyler Cowen: Great Stagnation, Vernor Vinge, Watson beat the top human players on Jeopardy!, winner-take-all economy, Y2K

The combination of higher pay despite growing supply can only mean that the relative demand for skilled labor increased even faster than supply. And at the same time, the demand for tasks that could be completed by high school dropouts fell so rapidly that there was a glut of this type of worker, even though their ranks were thinning. The lack of demand for unskilled workers meant ever-lower wages for those who continued to compete for low-skill jobs. And because most of the people with the least education already had the lowest wages, this change increased overall income inequality. Organizational Coinvention While a one-for-one substitution of machines for people sometimes occurs, a broader reorganization in business culture may have been an even more important path for skill-biased change. Work that Erik did with Stanford’s Tim Bresnahan, Wharton’s Lorin Hitt, and MIT’s Shinkyu Yang found that companies used digital technologies to reorganize decision-making authority, incentives systems, information flows, hiring systems, and other aspects of their management and organizational processes.20 This coinvention of organization and technology not only significantly increased productivity but tended to require more educated workers and reduce demand for less-skilled workers.

Future Files: A Brief History of the Next 50 Years by Richard Watson

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Albert Einstein, bank run, banking crisis, battle of ideas, Black Swan, call centre, carbon footprint, cashless society, citizen journalism, commoditize, computer age, computer vision, congestion charging, corporate governance, corporate social responsibility, deglobalization, digital Maoism, disintermediation, epigenetics, failed state, financial innovation, Firefox, food miles, future of work, global supply chain, global village, hive mind, industrial robot, invention of the telegraph, Jaron Lanier, Jeff Bezos, knowledge economy, linked data, low skilled workers, M-Pesa, mass immigration, Northern Rock, peak oil, pensions crisis, precision agriculture, prediction markets, Ralph Nader, Ray Kurzweil, rent control, RFID, Richard Florida, self-driving car, speech recognition, telepresence, the scientific method, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Turing test, Victor Gruen, white flight, women in the workforce, Zipcar

I would guess that we’ve been traveling for about four hours, which could put me anywhere from Italy to the outskirts of Hungary. That’s unless I got aboard the fast train, in which case I could be in Georgia or Kazakhstan. Yikes! Wish you were here? Best wishes Seanie trends that will transform work 5 Globalization and connectivity Globalization cuts both ways. On the one hand, millions of low-skill jobs will be lost to low-cost areas such as China, India and Africa, while at the same time geography will become irrelevant as highly skilled workers become more mobile. This means that companies will hire globally and workers will move internationally to follow opportunities. It also means that jobs can exist in one location while the worker is in another. Want to work for an investment bank in New York but live in London?


pages: 391 words: 97,018

Better, Stronger, Faster: The Myth of American Decline . . . And the Rise of a New Economy by Daniel Gross

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, Affordable Care Act / Obamacare, Airbnb, American Society of Civil Engineers: Report Card, asset-backed security, Bakken shale, banking crisis, BRICs, British Empire, business process, business process outsourcing, call centre, Carmen Reinhart, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, creative destruction, credit crunch, currency manipulation / currency intervention, demand response, Donald Trump, Frederick Winslow Taylor, high net worth, housing crisis, hydraulic fracturing, If something cannot go on forever, it will stop - Herbert Stein's Law, illegal immigration, index fund, intangible asset, intermodal, inventory management, Kenneth Rogoff, labor-force participation, LNG terminal, low skilled workers, Mark Zuckerberg, Martin Wolf, Maui Hawaii, McMansion, money market fund, mortgage debt, Network effects, new economy, obamacare, oil shale / tar sands, oil shock, peak oil, Plutocrats, plutocrats, price stability, quantitative easing, race to the bottom, reserve currency, reshoring, Richard Florida, rising living standards, risk tolerance, risk/return, Silicon Valley, Silicon Valley startup, six sigma, Skype, sovereign wealth fund, Steve Jobs, superstar cities, the High Line, transit-oriented development, Wall-E, Yogi Berra, zero-sum game, Zipcar

The workforce directly employed in North Dakota’s oil sector has risen from 4,500 in 2005 to 35,000 in mid-2011. “On any given Monday, we’ve got 1,700 job openings directly related to the oil industry,” Ness continued. “And we’ve shown that if you have jobs, people will repopulate these areas.” The average wage in the North Dakota oil and gas extraction industry was more than $90,000. The boom has created demand for truckers, accountants, cooks, and HR managers, in addition to roughnecks. Even low-skilled jobs can command high wages. In tiny Williston, population 14,716, gas stations, convenience stores, and McDonald’s are offering $12.50 to $15 an hour for entry-level jobs. “Man camps”—temporary housing structures carted in from out of state—were seeking to hire cooks and cleaners making $1,500 and $1,000 per week, respectively. The boom is rippling back across the state. Tax collections related to oil and gas production and extraction soared from $251 million in 2007 to $750 million in 2010.


pages: 403 words: 111,119

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist by Kate Raworth

3D printing, Asian financial crisis, bank run, basic income, battle of ideas, Berlin Wall, bitcoin, blockchain, Branko Milanovic, Bretton Woods, Buckminster Fuller, call centre, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, choice architecture, clean water, cognitive bias, collapse of Lehman Brothers, complexity theory, creative destruction, crowdsourcing, cryptocurrency, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, dematerialisation, Douglas Engelbart, Douglas Engelbart, en.wikipedia.org, energy transition, Erik Brynjolfsson, ethereum blockchain, Eugene Fama: efficient market hypothesis, experimental economics, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, Financial Instability Hypothesis, full employment, global supply chain, global village, Henri Poincaré, hiring and firing, Howard Zinn, Hyman Minsky, income inequality, Intergovernmental Panel on Climate Change (IPCC), invention of writing, invisible hand, Isaac Newton, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, land reform, land value tax, Landlord’s Game, loss aversion, low skilled workers, M-Pesa, Mahatma Gandhi, market fundamentalism, Martin Wolf, means of production, megacity, mobile money, Mont Pelerin Society, Myron Scholes, neoliberal agenda, Network effects, Occupy movement, off grid, offshore financial centre, oil shale / tar sands, out of africa, Paul Samuelson, peer-to-peer, planetary scale, price mechanism, quantitative easing, randomized controlled trial, Richard Thaler, Ronald Reagan, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, smart cities, smart meter, South Sea Bubble, statistical model, Steve Ballmer, The Chicago School, The Great Moderation, the map is not the territory, the market place, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, Torches of Freedom, trickle-down economics, ultimatum game, universal basic income, Upton Sinclair, Vilfredo Pareto, wikimedia commons

Just over a century later, thanks to mechanisation only 2% of US workers are employed in agriculture, and the horses have all but gone.72 But economic analysts worry that today’s robot replacements are cutting across so many industrial and service sectors so fast that job creation in other fields simply cannot keep up. Millions of mid-skill jobs lost in the recession of 2007–09 have not come back because they have been replaced by software. Meanwhile, the jobs that have returned post-recession are typically menial, creating an hourglass economy that offers a few high-skill and many low-skill jobs with little in between. Analysts predict that five million jobs across 15 major economies could well be lost to automation by 2020.73 And it is a worldwide trend, with the fastest-growing market for robots in China. There, the electronics manufacturing giant Foxconn, which employs around a million workers, plans to create a ‘million robot army’ and has already replaced 60,000 workers with robots in one factory alone.74 So how could distributive design help to prevent the economic segregation that technology appears to be driving?


pages: 323 words: 95,492

The Rise of the Outsiders: How Mainstream Politics Lost Its Way by Steve Richards

Affordable Care Act / Obamacare, Airbnb, banking crisis, battle of ideas, Bernie Sanders, call centre, centre right, collapse of Lehman Brothers, David Brooks, Donald Trump, Etonian, eurozone crisis, falling living standards, full employment, housing crisis, low skilled workers, manufacturing employment, Martin Wolf, mass immigration, Neil Kinnock, obamacare, Occupy movement, Ronald Reagan, Silicon Valley

In Greece, unemployment was the highest in the European Union and rose at some low points to more than 30 per cent of the adult population. In much of the democratic world there has been an accelerating increase in service-sector employment, both in low-skilled customer-service work and in high-skilled knowledge occupations, and a corresponding drop in manufacturing employment. This has contributed to a polarization of the workforce in many countries, with more high-skilled and low-skilled jobs, but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time permanent contracts has shrunk. Labour markets have been fundamentally transformed as digital technology has destroyed a wide range of routine jobs, while creating new employment opportunities for highly skilled workers.


pages: 481 words: 120,693

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else by Chrystia Freeland

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activist fund / activist shareholder / activist investor, Albert Einstein, algorithmic trading, assortative mating, banking crisis, barriers to entry, Basel III, battle of ideas, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Branko Milanovic, Bretton Woods, BRICs, business climate, call centre, carried interest, Cass Sunstein, Clayton Christensen, collapse of Lehman Brothers, commoditize, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, crony capitalism, Deng Xiaoping, don't be evil, double helix, energy security, estate planning, experimental subject, financial deregulation, financial innovation, Flash crash, Frank Gehry, Gini coefficient, global village, Goldman Sachs: Vampire Squid, Gordon Gekko, Guggenheim Bilbao, haute couture, high net worth, income inequality, invention of the steam engine, job automation, John Markoff, joint-stock company, Joseph Schumpeter, knowledge economy, knowledge worker, liberation theology, light touch regulation, linear programming, London Whale, low skilled workers, manufacturing employment, Mark Zuckerberg, Martin Wolf, Mikhail Gorbachev, Moneyball by Michael Lewis explains big data, NetJets, new economy, Occupy movement, open economy, Peter Thiel, place-making, Plutocrats, plutocrats, Plutonomy: Buying Luxury, Explaining Global Imbalances, postindustrial economy, Potemkin village, profit motive, purchasing power parity, race to the bottom, rent-seeking, Rod Stewart played at Stephen Schwarzman birthday party, Ronald Reagan, self-driving car, short selling, Silicon Valley, Silicon Valley startup, Simon Kuznets, Solar eclipse in 1919, sovereign wealth fund, stem cell, Steve Jobs, the new new thing, The Spirit Level, The Wealth of Nations by Adam Smith, Tony Hsieh, too big to fail, trade route, trickle-down economics, Tyler Cowen: Great Stagnation, wage slave, Washington Consensus, winner-take-all economy, zero-sum game

Predictably Irrational: The Hidden Forces That Shape Our Decisions. Harper, 2009. Atkinson, Anthony, Thomas Piketty, and Emmanuel Saez. “Top Incomes in the Long Run of History.” Journal of Economic Literature 49:1 (2011). pp. 3–71. Autor, David. “The Polarization of Job Opportunities in the U.S. Labor Market.” Center for American Progress and The Hamilton Project. April 2010. Autor, David, and David Dorn. “The Growth of Low-Skill Service Jobs and the Polarization of the U.S. Labor Market.” MIT working paper. April 2012. Autor, David, David Dorn, and Gordon Hanson. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” MIT working paper. August 2011. Bajpai, Nirupam, Jeffrey D. Sachs, and Ashutosh Varshney (eds.). India in the Era of Economic Reforms. Oxford University Press, 2000. Bakija, Jon, Adam Cole, and Bradley T.


pages: 324 words: 92,805

The Impulse Society: America in the Age of Instant Gratification by Paul Roberts

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2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 3D printing, accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, asset allocation, business process, Cass Sunstein, centre right, choice architecture, collateralized debt obligation, collective bargaining, computerized trading, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, David Brooks, delayed gratification, double helix, factory automation, financial deregulation, financial innovation, fixed income, full employment, game design, greed is good, If something cannot go on forever, it will stop - Herbert Stein's Law, impulse control, income inequality, inflation targeting, invisible hand, job automation, John Markoff, Joseph Schumpeter, knowledge worker, late fees, Long Term Capital Management, loss aversion, low skilled workers, mass immigration, new economy, Nicholas Carr, obamacare, Occupy movement, oil shale / tar sands, performance metric, postindustrial economy, profit maximization, Report Card for America’s Infrastructure, reshoring, Richard Thaler, rising living standards, Robert Shiller, Robert Shiller, Rodney Brooks, Ronald Reagan, shareholder value, Silicon Valley, speech recognition, Steve Jobs, technoutopianism, the built environment, The Predators' Ball, the scientific method, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, total factor productivity, Tyler Cowen: Great Stagnation, Walter Mischel, winner-take-all economy

Just below the hyperproductives will be a narrow stratum of service providers—everyone from masseurs and trainers to decorators and personal assistants to tutors, artisans, and entertainers —who will cater, often quite lucratively, to the hyperproductives. Below them, however, things get tricky. In a job market that has been systematically and efficiently stripped of any task that can be automated or offshored, many of the remaining workers will have extremely slim pickings—mainly low-skill service-sector jobs such as food service, security, janitorial, lawn and garden, beauty shop, and home health care. On the plus side, such jobs are probably safe from offshoring or automation “because they often involve hands-on contact,” explains David Autor, a job market expert at MIT, whose research informs Cowen’s book. On the downside side, Autor told me, those jobs will always be low-wage “because the skills they use are generic and almost anyone can be productive at them within a couple of days.”34 And, in fact, there will likely be far more downsides to these jobs than upsides.


pages: 212 words: 80,393

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The End of Nice: How to Be Human in a World Run by Robots (Kindle Single) by Richard Newton

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3D printing, Black Swan, British Empire, Buckminster Fuller, Clayton Christensen, crowdsourcing, deliberate practice, fear of failure, Filter Bubble, future of work, Google Glasses, Isaac Newton, James Dyson, Jaron Lanier, Jeff Bezos, job automation, Lean Startup, low skilled workers, Mark Zuckerberg, move fast and break things, move fast and break things, Paul Erdős, Paul Graham, recommendation engine, rising living standards, Robert Shiller, Robert Shiller, Silicon Valley, Silicon Valley startup, skunkworks, Steve Ballmer, Steve Jobs, Y Combinator

This is happening across the occupational spectrum. If it is the job title rather than you the individual that defines the output of your work, then the curtain is falling. Here’s a test: Whether your work is high skill or low skill, if another human cog can be slid in to the organisation to replace you and cause no interruption to business-as-usual, then for you the wind of change is rising. For hundreds of millions of low and high skill jobs the lights are going out. Few occupations will be safe. Whether you’re a smooth-talking sales person, an information-age maven, a slick internal politician or a head-down doer, the robocalypse is headed your way at ramming speed. “I see your point,” you may think, “but not me – I have a certain je ne sais quoi. I am irreplaceable.” No doubt the horse once said those very same words to the motor car.


pages: 467 words: 116,902

The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle Alexander

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affirmative action, cognitive bias, Columbine, Corrections Corporation of America, deindustrialization, desegregation, ending welfare as we know it, friendly fire, Gunnar Myrdal, illegal immigration, land reform, large denomination, low skilled workers, mandatory minimum, mass incarceration, means of production, new economy, New Urbanism, pink-collar, profit motive, Ronald Reagan, Rosa Parks, trickle-down economics, upwardly mobile, War on Poverty, women in the workforce, zero-sum game

As legal scholar john a. powell once commented, only half in jest, “It’s actually better to be exploited than marginalized, in some respects, because if you’re exploited presumably you’re still needed.”78 Viewed in this light, the frantic accusations of genocide by poor blacks in the early years of the War on Drugs seem less paranoid. The intuition of those residing in ghetto communities that they had suddenly become disposable was rooted in real changes in the economy—changes that have been devastating to poor black communities as factories have closed, low-skill jobs have disappeared, and all those who had the means to flee the ghetto did. The sense among those left behind that society no longer has use for them, and that the government now aims simply to get rid of them, reflects a reality that many of us who claim to care prefer to avoid simply by changing channels. 6 The Fire This Time Shortly after sunrise on September 20, 2007, more than ten thousand protestors had already descended on Jena, Louisiana, a small town of about three thousand people.


pages: 499 words: 152,156

Age of Ambition: Chasing Fortune, Truth, and Faith in the New China by Evan Osnos

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conceptual framework, crony capitalism, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, East Village, financial independence, Gini coefficient, income inequality, indoor plumbing, information asymmetry, land reform, Lao Tzu, low skilled workers, market fundamentalism, Mohammed Bouazizi, Plutocrats, plutocrats, rolodex, Silicon Valley, South China Sea, sovereign wealth fund, special economic zone, Steve Jobs, transcontinental railway, Washington Consensus, Xiaogang Anhui farmers, young professional

We stepped back into the elevator, and Michael seemed uncomfortable. Speaking in English, so his parents couldn’t understand, he said, “I won’t live here. I will put my parents here. I need to be back in a big city like Shenzhen or Beijing or Shanghai. Qingyuan is countryside. Second tier. They just learn ‘exam English.’ They don’t have big dreams here.” As the years passed, I sensed that other young strivers like Michael were growing frustrated as well. Low-skilled jobs weren’t the problem—those wages were climbing—but there weren’t enough white-collar jobs to employ each year’s crop of more than six million new college graduates. Between 2003 and 2009, the average starting salary for migrant workers had grown by nearly 80 percent, but for college graduates, starting wages were flat. When you considered inflation, their income had declined. The young Chinese strivers desperate to become “car-and-home-equipped”—to find a mate and elbow their way into the New Middle-Income Stratum—now knew the truth: China’s new fortunes were wildly out of balance.


pages: 372 words: 152

The End of Work by Jeremy Rifkin

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banking crisis, Bertrand Russell: In Praise of Idleness, blue-collar work, cashless society, collective bargaining, computer age, deskilling, Dissolution of the Soviet Union, employer provided health coverage, Erik Brynjolfsson, full employment, future of work, general-purpose programming language, George Gilder, global village, hiring and firing, informal economy, interchangeable parts, invention of the telegraph, Jacques de Vaucanson, job automation, John Maynard Keynes: technological unemployment, knowledge economy, knowledge worker, land reform, low skilled workers, means of production, new economy, New Urbanism, Paul Samuelson, pink-collar, post-industrial society, Productivity paradox, Richard Florida, Ronald Reagan, Silicon Valley, speech recognition, strikebreaker, technoutopianism, Thorstein Veblen, Toyota Production System, trade route, trickle-down economics, women in the workforce, working poor, working-age population, Works Progress Administration

The price for global success, however, is likely to be costly for New York's workforce. The city's former comptroller, Elizabeth Holtzman, painted the employment picture in stark contrasts. "What we may be moving towards here," she said, "is a tale of two cities: growth in higher paying jobs and a shrinking in lower-paying jobs." Holtzman warned that unless new 144 THE DECLINE OF THE GLOBAL LABOR FORCE low-skilled jobs can be found to fill the vacuum created by the new displacement technologies, the city will face "turmoil-more social dislocation, more crime, more poverty."8 The economic problems facing New York City are occurring throughout the country and in every developed nation with an advanced service sector. Routine personal services and an increasing number of more complex service functions are being taken over by intelligent machines.


pages: 468 words: 123,823

A People's History of Poverty in America by Stephen Pimpare

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affirmative action, British Empire, car-free, clean water, cognitive dissonance, Columbine, Daniel Kahneman / Amos Tversky, deindustrialization, delayed gratification, dumpster diving, East Village, Frederick Winslow Taylor, George Gilder, hiring and firing, Howard Zinn, illegal immigration, impulse control, income inequality, index card, Jane Jacobs, low skilled workers, Mahatma Gandhi, mass incarceration, meta analysis, meta-analysis, moral panic, Naomi Klein, New Urbanism, payday loans, Ralph Waldo Emerson, Ronald Reagan, The Bell Curve by Richard Herrnstein and Charles Murray, The Death and Life of Great American Cities, The Wealth of Nations by Adam Smith, Thomas Malthus, union organizing, urban renewal, War on Poverty, white flight, working poor, Works Progress Administration

If anything is being given away, they want some, too. We encounter that over and over in our intake. They are accustomed to having things handed out to them by white people. And that’s the way they look at relief. Why work, if they can get support from the Government?51 Another part of the answer for why blacks in the South received less than those in the North may be because they retained their near monopoly on unskilled and low-skilled jobs, causing whites there to be in greater relative need and to have had fewer resources.52 Regardless, African Americans continued to depend upon their own institutions of self-help. During the Depression, reports historian Joe William Trotter Jr.:African-American families took in boarders, cared for each other’s children, and creatively manipulated their resources. In rural areas, they maintained gardens, canned fruits and vegetables, fished, hunted, and gathered wild nuts and berries.


pages: 537 words: 158,544

Second World: Empires and Influence in the New Global Order by Parag Khanna

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Admiral Zheng, affirmative action, anti-communist, Asian financial crisis, Bartolomé de las Casas, Branko Milanovic, British Empire, call centre, capital controls, central bank independence, cognitive dissonance, colonial rule, complexity theory, continuation of politics by other means, crony capitalism, Deng Xiaoping, Dissolution of the Soviet Union, Donald Trump, Edward Glaeser, energy security, European colonialism, facts on the ground, failed state, flex fuel, Francis Fukuyama: the end of history, friendly fire, Gini coefficient, global reserve currency, global supply chain, haute couture, Hernando de Soto, illegal immigration, income inequality, informal economy, invisible hand, Islamic Golden Age, Khyber Pass, knowledge economy, land reform, low skilled workers, mass immigration, means of production, megacity, Monroe Doctrine, oil shale / tar sands, oil shock, open borders, open economy, Parag Khanna, Pax Mongolica, Pearl River Delta, pirate software, Plutonomy: Buying Luxury, Explaining Global Imbalances, Potemkin village, price stability, race to the bottom, RAND corporation, reserve currency, rising living standards, Ronald Reagan, Silicon Valley, Skype, South China Sea, special economic zone, stem cell, Stephen Hawking, Thomas L Friedman, trade route, trickle-down economics, uranium enrichment, urban renewal, Washington Consensus, women in the workforce

America’s search for Arab allies has elevated Jordan from a buffer state to a geopolitical bridgehead. A free trade agreement quickly made America Jordan’s largest trading partner, and Jordan has been made an example of positive economic collaboration with Israel through Qualified Industrial Zones (QIZs). The reality, however, is that few Jordanian companies have the manufacturing wherewithal to exploit the QIZs, and the Jordanians who work for them hold low-skill jobs that provide for sustenance, not wealth. The real beneficiaries have been Israeli and Chinese companies, which register their textile firms in Jordan and buy up the largest QIZ shares (the same globalization loophole China exploits in North Africa to gain advantageous export access to the EU). Chinese engineering firms based in Jordan have also built four of its five new dams with remarkable efficiency.


pages: 1,104 words: 302,176

The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (The Princeton Economic History of the Western World) by Robert J. Gordon

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3D printing, Affordable Care Act / Obamacare, airline deregulation, airport security, Apple II, barriers to entry, big-box store, blue-collar work, Capital in the Twenty-First Century by Thomas Piketty, clean water, collective bargaining, computer age, creative destruction, deindustrialization, Detroit bankruptcy, discovery of penicillin, Donner party, Downton Abbey, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, feminist movement, financial innovation, full employment, George Akerlof, germ theory of disease, glass ceiling, high net worth, housing crisis, immigration reform, impulse control, income inequality, income per capita, indoor plumbing, industrial robot, inflight wifi, interchangeable parts, invention of agriculture, invention of air conditioning, invention of the telegraph, invention of the telephone, inventory management, James Watt: steam engine, Jeff Bezos, jitney, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, labor-force participation, Loma Prieta earthquake, Louis Daguerre, Louis Pasteur, low skilled workers, manufacturing employment, Mark Zuckerberg, market fragmentation, Mason jar, mass immigration, mass incarceration, McMansion, Menlo Park, minimum wage unemployment, mortgage debt, mortgage tax deduction, new economy, Norbert Wiener, obamacare, occupational segregation, oil shale / tar sands, oil shock, payday loans, Peter Thiel, pink-collar, Productivity paradox, Ralph Nader, Ralph Waldo Emerson, refrigerator car, rent control, Robert X Cringely, Ronald Coase, school choice, Second Machine Age, secular stagnation, Skype, stem cell, Steve Jobs, Steve Wozniak, Steven Pinker, The Market for Lemons, Thomas Malthus, total factor productivity, transaction costs, transcontinental railway, traveling salesman, Triangle Shirtwaist Factory, Unsafe at Any Speed, Upton Sinclair, upwardly mobile, urban decay, urban planning, urban sprawl, washing machines reduced drudgery, Washington Consensus, Watson beat the top human players on Jeopardy!, We wanted flying cars, instead we got 140 characters, working poor, working-age population, Works Progress Administration, yellow journalism, yield management

In the case of the automotive parts industry, the effects of globalization included a decline in median wages from $18.35 in 2003 to $15.83 per hour in 2013.12 Immigration accounted for more than half of total labor force growth in the United States over the decade between 1995 and 2005.13 A complementary measure is that the share of foreign-born workers in the labor force steadily grew from 5.3 percent in 1970 to 14.7 percent in 2005.14 Economic research supports the view that immigrants reduce the wages of domestic workers by a small amount and that the effect is greatest on domestic workers lacking a high school degree. Many low-skilled immigrants disproportionately take jobs and enter occupations already staffed by foreign-born workers—for example, restaurant workers and landscape services—and thus their main effect is to drive down wages of foreign-born workers, not domestic workers. The previous literature has noted the fact that among high school dropouts, wages of domestic and foreign-born workers were almost identical up to 1980, but by 2004, foreign-born workers earned 15–20 percent less.15 Downward pressure on wages in the bottom 90 percent would have occurred even if there had been no erosion of unionization nor a growth of imports or immigration.

This transformation has been dubbed the “polarization hypothesis” and has been extensively documented in recent years by labor economists.16 Upper-level jobs such as those held by managers and professionals are often called “non-routine abstract” occupations. Middle-level jobs such as those held by assembly-line manufacturing workers, bookkeepers, receptionists, and clerks have been called “routine” occupations, whereas those at the bottom have been called “manual” jobs. One result of the loss of middle-skilled routine jobs is that middle-skilled workers are forced to compete for low-skilled manual jobs, thus raising the supply relative to the demand for manual workers. The result has been a decline in wages for those with relatively low skills, high school graduates and high school dropouts, as shown below in figure 18–3. The overall level of wages is reduced as the composition of employment shifts from relatively well-paid manufacturing jobs to the wide range of typically low-paid jobs in retail, food services, cleaning, and groundskeeping.

This is 12 percent less than the average value of the minimum wage in the 1960s, expressed in 2014 prices.4 Over the same 50 years, real compensation per hour rose by 115 percent, an indicator of how inadequate was the legislated real value of the minimum wage in keeping up with overall compensation.5 Standard economic theory implies that an increase in the minimum wage would raise the unemployment rate of the low-wage workers. However, a substantial body of economic research indicates little or no employment effect. The current economic situation of 2015–16 is a particularly appropriate time to raise the minimum wage, as the U.S. labor market currently has a record number of job openings and is creating low-skill jobs at a relatively rapid rate. Earned Income Tax Credit The EITC rewards low-income parents for working and has had a large positive effect on net income for its beneficiaries. It has also achieved dramatic improvements in the well-being of children in those families, including a reduction in the incidence of low birth weight, an increase in math and reading scores, and a boost in college enrollment rates for the children who benefited.


pages: 299 words: 83,854

Shortchanged: Life and Debt in the Fringe Economy by Howard Karger

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big-box store, blue-collar work, corporate social responsibility, credit crunch, delayed gratification, financial deregulation, fixed income, illegal immigration, labor-force participation, late fees, London Interbank Offered Rate, low skilled workers, microcredit, mortgage debt, negative equity, New Journalism, New Urbanism, offshore financial centre, payday loans, predatory finance, race to the bottom, Silicon Valley, Telecommunications Act of 1996, telemarketer, underbanked, working poor

In fact, when the labor force grew by 16.7 million workers in the 1990s, 6.4 million of them were foreign-born.2125 The 1990s saw large-scale geographic dispersion among newly arriving immigrants. While in earlier years most new immigrants clustered in a few large cities, such as Los Angeles, New York, and Chicago, the 1990s witnessed a spread to the Midwest, New England, and the mid- and South Atlantic regions. In some parts of the country, almost the entire labor-force growth between 1996 and 2000 was due to immigration.22 New immigrants commonly fill low-skill, blue-collar jobs, since a large number have less than a high school education. About 33% of immigrants have not finished high school, compared with 13% of natives. Not only do immigrants possess fewer educational skills than native workers, but also many of their skills don’t translate into the American workplace.23 Between 2000 and 2002, about 3.3 million illegal immigrants entered in the United States.

For example, the growth of the alternative financial sector is a sign of serious structural economic and labor market problems, which include stagnant wages coupled with the rising prices of necessities (such as housing, health care, pharmaceuticals, and energy); a labor market increasingly marked by little employment security; a rising number of jobs that pay hourly wages without benefits; and the rapid creation of low-skilled and temporary jobs. The fringe economy is also tied to the increasing disparity of wealth in the United States. In 2004 the top 29,000 Americans had as much income as the bottom 96 million. In 1970 the bottom third of all Americans had more than ten times the income of the top 1/100 of 1%, or the top 29,000. By 2000 they were equal because the bottom third’s income fell while the top group’s income went through the roof.4 In short, it’s easy to blame the fringe economy for what is essentially an economic and labor market problem.


pages: 265 words: 74,941

The Great Reset: How the Post-Crash Economy Will Change the Way We Live and Work by Richard Florida

banking crisis, big-box store, blue-collar work, car-free, carbon footprint, collapse of Lehman Brothers, congestion charging, creative destruction, deskilling, edge city, Edward Glaeser, falling living standards, financial innovation, Ford paid five dollars a day, high net worth, Home mortgage interest deduction, housing crisis, if you build it, they will come, income inequality, indoor plumbing, interchangeable parts, invention of the telephone, Jane Jacobs, Joseph Schumpeter, knowledge economy, labour mobility, low skilled workers, manufacturing employment, McMansion, Menlo Park, Nate Silver, New Economic Geography, new economy, New Urbanism, oil shock, Own Your Own Home, pattern recognition, peak oil, Ponzi scheme, post-industrial society, postindustrial economy, reserve currency, Richard Florida, Robert Shiller, Robert Shiller, secular stagnation, Silicon Valley, Silicon Valley startup, sovereign wealth fund, the built environment, The Wealth of Nations by Adam Smith, Thomas L Friedman, total factor productivity, urban decay, urban planning, urban renewal, white flight, young professional, Zipcar

It is not, for instance, just a period of temporary layoffs of manufacturing workers, who will be picked up again as the economy recovers. This is a moment of significant creative destruction; older manufacturing firms, jobs, and industries are being destroyed, and new industries, occupations, and firms are being created. In this kind of situation, it’s much harder for workers, particularly low-skilled ones, to find jobs where they live. In today’s economy and the economy of the future, geographic mobility is required to match workers and their skills to appropriate jobs. We cannot escape the reality of the conflict of two great dreams: the dream of unlimited economic opportunity and the dream of owning a single-family home. We’ve seen the ways in which the importance of home ownership became overblown and began to undermine the economy; how it consumed an ever-larger share of income for far too many, constraining their lifestyle and sometimes even bankrupting them; and how it encouraged massive, unsustainable growth in places where land was cheap and the real estate economy dominant.


pages: 494 words: 28,046

Empire by Michael Hardt, Antonio Negri

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Berlin Wall, Bretton Woods, collective bargaining, colonial rule, conceptual framework, discovery of the americas, Dissolution of the Soviet Union, equal pay for equal work, European colonialism, Fall of the Berlin Wall, feminist movement, Francis Fukuyama: the end of history, global village, Haight Ashbury, informal economy, invention of the printing press, invisible hand, labour mobility, late capitalism, low skilled workers, mass immigration, means of production, Monroe Doctrine, New Urbanism, open borders, Peace of Westphalia, post-industrial society, postindustrial economy, Scramble for Africa, The Wealth of Nations by Adam Smith, union organizing, urban planning, William of Occam

Robert Reich calls the kind of immaterial labor involved in computer and communication work ‘‘symbolic-analytical services’’—tasks that involve ‘‘problem-solving, problem-identifying, and strategic brokering activities.’’ 19 This type of labor claims the highest value, and thus Reich identifies it as the key to competition in the new global economy. He recognizes, however, that the growth of these knowledge-based jobs of creative symbolic manipu- 291 292 PASSAGES OF PRODUCTION lation implies a corresponding growth of low-value and low-skill jobs of routine symbol manipulation, such as data entry and word processing. Here begins to emerge a fundamental division of labor within the realm of immaterial production. We should note that one consequence of the informatization of production and the emergence of immaterial labor has been a real homogenization of laboring processes. From Marx’s perspective in the nineteenth century, the concrete practices of various laboring activities were radically heterogeneous: tailoring and weaving involved incommensurable concrete actions.


pages: 353 words: 98,267

The Price of Everything: And the Hidden Logic of Value by Eduardo Porter

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Alvin Roth, Asian financial crisis, Ayatollah Khomeini, banking crisis, barriers to entry, Berlin Wall, British Empire, capital controls, Carmen Reinhart, Cass Sunstein, clean water, Credit Default Swap, Deng Xiaoping, Edward Glaeser, European colonialism, Fall of the Berlin Wall, financial deregulation, Ford paid five dollars a day, full employment, George Akerlof, Gordon Gekko, guest worker program, happiness index / gross national happiness, housing crisis, illegal immigration, immigration reform, income inequality, income per capita, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Jean Tirole, John Maynard Keynes: technological unemployment, Joshua Gans and Andrew Leigh, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, loss aversion, low skilled workers, Martin Wolf, means of production, Menlo Park, Mexican peso crisis / tequila crisis, new economy, New Urbanism, peer-to-peer, pension reform, Peter Singer: altruism, pets.com, placebo effect, price discrimination, price stability, rent-seeking, Richard Thaler, rising living standards, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Silicon Valley, stem cell, Steve Jobs, Stewart Brand, superstar cities, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, trade route, transatlantic slave trade, transatlantic slave trade, ultimatum game, unpaid internship, urban planning, Veblen good, women in the workforce, World Values Survey, Yom Kippur War, young professional, zero-sum game

Data on the impact of income inequality on health and segregation are drawn from Richard Wilkinson and Kate Pickett, The Spirit Level: Why More Equal Societies Almost Always Do Better (New York: Bloomsbury Press, 2010); and Joseph Gyourko, Christopher Mayer, and Todd Sinai, “Superstar Cities,” NBER Working Paper, July 2006. 125-127 The Vanishing Middle: The discussion of the impact of education on income growth draws from Claudia Goldin and Lawrence Katz, The Race Between Education and Technology (Cambridge, Mass.: Belknap Press of Harvard University Press, 2008); David Autor and David Dorn, “Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States,” NBER working paper, November 2008; Congressional Budget Office, “Changes in the Distribution of Workers’ Annual Earnings Between 1979 and 2007,” October 2009; Francine Blau, Marianne Ferber, and Anne Winkler, The Economics of Women, Men and Work, 5th edition (Upper Saddle River, N.J.: Pearson Prentice Hall, 2006); Bureau of Labor Statistics (www.bls.gov/news.release/wkyeng.t05.htm, accessed 08/08/2010); Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States,” 2008 (www.census.gov/prod/2009pubs/p60-236.pdf, accessed 08/09/2010); Bureau of Labor Statistics, “100 Years of U.S.


pages: 378 words: 110,518

Postcapitalism: A Guide to Our Future by Paul Mason

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Alfred Russel Wallace, bank run, banking crisis, banks create money, Basel III, basic income, Bernie Madoff, Bill Gates: Altair 8800, bitcoin, Branko Milanovic, Bretton Woods, BRICs, British Empire, business process, butterfly effect, call centre, capital controls, Cesare Marchetti: Marchetti’s constant, Claude Shannon: information theory, collaborative economy, collective bargaining, Corn Laws, corporate social responsibility, creative destruction, credit crunch, currency manipulation / currency intervention, currency peg, David Graeber, deglobalization, deindustrialization, deskilling, discovery of the americas, Downton Abbey, drone strike, en.wikipedia.org, energy security, eurozone crisis, factory automation, financial repression, Firefox, Fractional reserve banking, Frederick Winslow Taylor, full employment, future of work, game design, income inequality, inflation targeting, informal economy, information asymmetry, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Internet of things, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, Joseph Schumpeter, Kenneth Arrow, Kevin Kelly, knowledge economy, knowledge worker, late capitalism, low skilled workers, market clearing, means of production, Metcalfe's law, money: store of value / unit of account / medium of exchange, mortgage debt, Network effects, new economy, Norbert Wiener, Occupy movement, oil shale / tar sands, oil shock, Paul Samuelson, payday loans, Pearl River Delta, post-industrial society, precariat, price mechanism, profit motive, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, RFID, Richard Stallman, Robert Gordon, Robert Metcalfe, secular stagnation, sharing economy, Stewart Brand, structural adjustment programs, supply-chain management, The Future of Employment, the scientific method, The Wealth of Nations by Adam Smith, Transnistria, union organizing, universal basic income, urban decay, urban planning, Vilfredo Pareto, wages for housework, women in the workforce

The workforce of the global south will achieve higher living standards and at some point capital will react by introducing greater automation and pursuing higher productivity in the emerging markets. This will place the workers of China and Brazil on the same overall trajectory as the rich-world workforce, which is to become service-dominated, split into a skilled core and a precariat, with both layers seeing work partially de-linked from wages. In addition, as the Oxford Martin School suggests, it is the low-skilled service jobs that stand the highest risk of total automation over the next two decades. The global working class is not destined to remain for ever divided into factory drones in China and games designers in the USA. However, the struggle in the workplace is no longer the only, or most important, drama. In many industrial and commercial cities around the world, the networked individual is no longer a sociological curiosity, s/he is the archetype.


pages: 397 words: 109,631

Mindware: Tools for Smart Thinking by Richard E. Nisbett

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affirmative action, Albert Einstein, availability heuristic, big-box store, Cass Sunstein, choice architecture, cognitive dissonance, correlation coefficient, correlation does not imply causation, cosmological constant, Daniel Kahneman / Amos Tversky, dark matter, endowment effect, experimental subject, feminist movement, fixed income, fundamental attribution error, glass ceiling, Henri Poincaré, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, job satisfaction, lake wobegon effect, libertarian paternalism, loss aversion, low skilled workers, Menlo Park, meta analysis, meta-analysis, quantitative easing, Richard Thaler, Ronald Reagan, selection bias, Socratic dialogue, Steve Jobs, Steven Levy, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, William of Occam, Zipcar

A showily random procedure selected some of the participants to be “managers” and to assume supervisory responsibilities. Some were selected to be mere “clerks” who followed orders. Humphrey gave the managers time to study manuals describing their tasks. While they were studying them, the experimenter showed the clerks the mailboxes, filing system, and so on. The newly constructed office team then went about their business for two hours. The clerks were assigned to work on a variety of low-skilled, repetitive jobs and had little autonomy. The managers, as in a real office, performed reasonably high-skill-level tasks and directed the clerks’ activities. At the end of the work period, managers and clerks rated themselves and each other on a variety of role-related traits. These included leadership, intelligence, motivation for hard work, assertiveness, and supportiveness. For all these traits, managers rated their fellow managers more highly than they rated their clerks.


pages: 356 words: 91,157

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It by Richard Florida

affirmative action, Airbnb, basic income, Bernie Sanders, blue-collar work, business climate, Capital in the Twenty-First Century by Thomas Piketty, clean water, Columbine, congestion charging, creative destruction, David Ricardo: comparative advantage, declining real wages, deindustrialization, Donald Trump, East Village, edge city, Edward Glaeser, failed state, Ferguson, Missouri, Gini coefficient, Google bus, high net worth, income inequality, income per capita, industrial cluster, informal economy, Jane Jacobs, jitney, Kitchen Debate, knowledge economy, knowledge worker, land value tax, low skilled workers, Lyft, megacity, Menlo Park, mortgage tax deduction, Nate Silver, New Economic Geography, new economy, New Urbanism, occupational segregation, Paul Graham, Plutocrats, plutocrats, RAND corporation, rent control, rent-seeking, Richard Florida, rising living standards, Ronald Reagan, secular stagnation, self-driving car, Silicon Valley, sovereign wealth fund, superstar cities, the built environment, The Chicago School, The Death and Life of Great American Cities, the High Line, The Wealth of Nations by Adam Smith, Thorstein Veblen, trickle-down economics, Uber and Lyft, universal basic income, upwardly mobile, urban decay, urban planning, urban renewal, urban sprawl, white flight, young professional

Richard Florida and Charlotta Mellander, “The Geography of Inequality: Difference and Determinants of Wage and Income Inequality across US Metros,” Regional Studies, 2014, 1–14; Richard Florida, “The Inequality of American Cities,” CityLab, March 5, 2012, www.citylab.com/work/2012/03/inequality-american-cities/861; Richard Florida, “The Inequality Puzzle in U.S. Cities,” CityLab, March 7, 2012, www.citylab.com/work/2012/03/inequality-puzzle-us-cities/858. 14. David H. Autor, Lawrence F. Katz, and Melissa S. Kearney, The Polarization of the U.S. Labor Market (Cambridge, MA: National Bureau of Economic Research, 2006), http://economics.mit.edu/files/584; David Autor and David Dorn, “The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market,” American Economic Review 103, no. 5 (2013): 1553–1597; David H. Autor, Lawrence F. Katz, and Alan B. Krueger, “Computing Inequality: Have Computers Changed the Labor Market?,” Quarterly Journal of Economics 113, no. 4 (1998): 1169–1213; David H. Autor, Frank Levy, and Richard J. Murnane, “The Skill Content of Recent Technological Change: An Empirical Exploration,” Quarterly Journal of Economics 118, no. 4 (2003): 1279–1333. 15.


pages: 357 words: 99,684

Why It's Still Kicking Off Everywhere: The New Global Revolutions by Paul Mason

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back-to-the-land, balance sheet recession, bank run, banking crisis, Berlin Wall, capital controls, centre right, citizen journalism, collapse of Lehman Brothers, collective bargaining, creative destruction, credit crunch, Credit Default Swap, currency manipulation / currency intervention, currency peg, eurozone crisis, Fall of the Berlin Wall, floating exchange rates, Francis Fukuyama: the end of history, full employment, ghettoisation, illegal immigration, informal economy, land tenure, low skilled workers, mass immigration, means of production, megacity, Mohammed Bouazizi, Naomi Klein, Network effects, New Journalism, Occupy movement, price stability, quantitative easing, race to the bottom, rising living standards, short selling, Slavoj Žižek, Stewart Brand, strikebreaker, union organizing, We are the 99%, Whole Earth Catalog, WikiLeaks, Winter of Discontent, women in the workforce, working poor, working-age population, young professional

On the TV, as you struggle to get breakfast down, it’s always Fox News: no longer starring Beck, who’s been relegated to the radio after one outrageous claim too many, but folks indistinguishable from him. Presenters obsessed with the debt and deficit, determined to cut the healthcare of the poor, the pensions of the elderly, the farm payments of the Oklahoma ranchers, and the minimum wage. If you’re up early in a motel, you meet the people who earn the minimum wage. They are nearly always women. And these jobs are not full-shift jobs. They are low-skill, part-time jobs for people who, in the era of globalization, cannot find anything better than microwaving burgers and cleaning greying bedsheets for $7.50 an hour. One motel blends into another. There’s a whiteboard in the reception: Welcome Brad and Stacey, ‘thanks for choseing us’ and a bunch of other misspelt words announce a party for the newly graduated Brad. Which college? ‘Ha, no sir, infantry basic training.’


pages: 370 words: 112,602

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit Banerjee, Esther Duflo

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Albert Einstein, Andrei Shleifer, business process, business process outsourcing, call centre, Cass Sunstein, charter city, clean water, collapse of Lehman Brothers, congestion charging, demographic transition, diversified portfolio, experimental subject, hiring and firing, land tenure, low skilled workers, M-Pesa, microcredit, moral hazard, purchasing power parity, randomized controlled trial, Richard Thaler, school vouchers, Silicon Valley, The Fortune at the Bottom of the Pyramid, Thomas Malthus, urban planning

The factory was typically located in a village that had low wages to start with, and in those villages, the growth of factory employment did much more for wage growth than agricultural productivity growth resulting from the famed Green Revolution. Furthermore, the poor gained disproportionately from industrial growth, because higher-paid employment became available even to those with low skills. Once such a job does materialize, it can make a tremendous difference in the lives of the people who get it. The middle class spends much more on health and education than the poor. Of course, in principle, it may be that patient, industrious people, inclined to invest in the future of their children, are better able to hang on to good jobs. But we suspect that this is not the entire explanation, and that this spending pattern has something to do with the fact that parents in better-off households have steady jobs: A stable job can, by itself, change people’s outlook on life in decisive ways.


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pages: 236 words: 67,953

pages: 504 words: 143,303

Why We Can't Afford the Rich by Andrew Sayer

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accounting loophole / creative accounting, Albert Einstein, asset-backed security, banking crisis, banks create money, basic income, Bretton Woods, British Empire, call centre, capital controls, carbon footprint, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, high net worth, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Dyson, job automation, Julian Assange, labour market flexibility, laissez-faire capitalism, land value tax, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, Plutocrats, plutocrats, popular capitalism, predatory finance, price stability, pushing on a string, quantitative easing, race to the bottom, rent-seeking, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, The Nature of the Firm, The Spirit Level, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, Winter of Discontent, working poor, Yom Kippur War, zero-sum game