The Homa Files

I don’t often quote Bill Clinton (except for “depends on what the meaning of the ‘is’ is”) … but he’s on the mark with this one …

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Slate, The Great Divergence: The United States of Inequality, Sept. 8, 2010

Bill Clinton said more than once when he was president, “What you earn is a function of what you learn.”

That had always been true, but Clinton’s point was that at the close of the 20th century it was becoming more true, because computers were transforming the marketplace. A manufacturing-based economy was giving way to a knowledge-based economy that had an upper class and a lower class but not much of a middle class.

The top is occupied by a group  labeled “symbolic analysts.”

These are people who “simplify reality into abstract images that can be rearranged, juggled, or experiment with” using “mathematical algorithms, legal arguments, financial gimmicks, scientific principles, psychological insights,” and other tools seldom acquired without a college or graduate degree.

At the bottom were providers of “in-person services” like waitressing, home health care, and security.

The middle, once occupied by factory workers, stenographers, and other moderately skilled laborers, is disappearing fast.

Did computerization create the Great Divergence?

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In the 1950s, at the dawn of the computer age, people first began to worry that automation would bring about mass unemployment.

Computers represented an entirely different sort of new machine.

Previously, technology had performed physical tasks.

Computers were designed to perform cognitive tasks.

Theoretically, there was no limit to the kinds of work computers might eventually perform … “a system of almost unlimited productive capacity which requires progressively less human labor.”

The kinds of jobs computers tend to eliminate are those that require some thinking but not a lot — precisely the niche previously occupied by moderately skilled middle-class laborers.

Consider the sad tale of the bank teller. Over the last 30 years, people pretty much stopped ever stepping into the lobby of their bank; instead, they started using the automatic teller machine outside and eventually learned to manage their accounts from their personal computers or mobile phones.

Contemporary culture is so fixated on the computer revolution that the very word “technology” has become an informal synonym for “computers.”

But before computers we witnessed technological revolutions brought on by the advent of the automobile, the airplane, radio, television, the washing machine, the Xerox machine, and too many other devices to name.

Most of these earlier inventions had much the same effect as the computer—that is, they increased demand for progressively higher-skilled workers.

Full article:
http://www.slate.com/id/2266025/entry/2266508/

This entry was posted on October 22, 2010 at 6:49 am and is filed under Economics, Education - Academics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.