The day after the Obama-Bush event, The Times published an article about the growing use of software to perform legal research. Computers, it turns out, can quickly analyze millions of documents, cheaply performing a task that used to require armies of lawyers and paralegals. In this case, technology is reducing the demand for highly educated workers.
And legal research isn’t an isolated example. As the article points out, software has also been replacing engineers in such tasks as chip design. More broadly, the idea that modern technology eliminates only menial jobs may dominate popular discussion, but it’s decades out of date.
The fact is that since 1990 or so, the U.S. job market has been characterized not by a general rise in the demand for skill, but by “hollowing out”: Both high-wage and low-wage employment have grown rapidly, but medium-wage jobs — the ones we count on to support a strong middle class — have lagged behind. And the hole in the middle has been getting wider.
Why is this happening? The belief that education is becoming ever more important rests on the notion that advances in technology increase job opportunities for those who work with information — loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.
Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” Therefore, any routine task — a category that includes many white-collar, non-manual jobs — is at risk. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor — will tend to grow.
And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate. There simply aren’t many assembly-line jobs left to lose.
Meanwhile, quite a lot of white-collar work currently carried out by well-educated, relatively well-paid workers may soon be computerized.
And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but computers and telecommunications make it possible to provide many services at long range. And research by my Princeton colleagues Alan Blinder and Alan Krueger suggests that high-wage jobs performed by highly educated workers are, if anything, more “offshorable” than jobs done by low-paid, less-educated workers.
So what does all this say about policy?
Yes, we need to fix American education. In particular, inequalities Americans face at the starting line — bright children from poor families are less likely to finish college than less able children of the affluent — aren’t just an outrage; they represent a huge waste of the nation’s human potential.
But some things education can’t do. The notion that putting more kids through college can restore the middle-class society we used to have is wishful thinking. It’s no longer true that a college degree guarantees a good job, and it’s becoming less true with each passing decade.
So if we want a society of shared prosperity, we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so ordinary workers have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
But we can’t get where we need to go just by giving workers college degrees, which may be tickets to jobs that don’t exist or don’t pay middle-class wages.
Paul Krugman writes for The New York Times.