That Used to Be Us_ How America Fell Behind in thted and How We Can Come Back - Friedman, Thomas L. & Mandelbaum, Michael [41]
Did employers do this because they have gotten meaner over the last twenty years? No. They did it because the hyper-connecting of the world both enabled them to do it and required them to do it before their competitors did.
Over the past decade this process eliminated a lot of American jobs, but the booming economy both disguised it and cushioned us from its effects, argues Rajan. How so? “By creating a huge housing bubble and a huge credit bubble to artificially sustain people’s standards of living,” he explained. “In effect, we created an industry—housing construction—to absorb all the unskilled labor” that would otherwise struggle to find jobs in a super-competitive marketplace. Once the housing and credit bubbles blew up, though, many workers found themselves literally up in the air. The bursting of the housing bubble wiped out a whole swath of low-skilled blue-collar jobs (many of the people who were building the houses) just when the intensification of globalization wiped out a whole swath of low- and mid-level white-collar jobs (many of the people who were buying the houses).
There is no question that stimulating the economy with short-term measures meant to increase demand (tax cuts, low interest rates, and increased government spending) would help revive some of these jobs. We do have a serious demand problem. But we also have a new structural challenge in the labor market that can only be addressed by more education and more innovation.
Here is a simple example of what is happening across the economy. For twenty years, Colorado ski resorts sold lift tickets that you clipped to your jacket for a lift operator to punch each morning when you took your first ride to the top of the mountain. These were relatively unskilled jobs that attracted mostly young people from around the world who came to America on temporary visas for the winter season. Their ID badges would often say what country they were from, and it was always fun for skiers to engage them: “Hey, you’re from Argentina. We were just there last year.” Then, with automation and digitization, the lift tickets were made with bar codes and the hole-punch tools were retired and replaced by handheld scanners, but the resorts still needed crews of unskilled workers to scan the tag on each skier’s jacket. In 2010, the Snowmass resort adopted a different system. Your lift ticket is now a credit-card-size piece of plastic with a microchip embedded in it. You slip the card into a jacket pocket. At the lift-line entrance, instead of stopping to get your ticket punched, you walk through a turnstile equipped with a sensor that automatically reads your card and, after picking up the signal, lets you pass through with a green light—an E-ZPass for skiers. There is no one from Argentina or Colorado checking your ticket with a welcoming smile. Instead of four lift employees, one at each gate, there is just one person, standing to the side, operating the whole system from a computer screen. One more highly skilled and no doubt better-paid employee and a computer have replaced four lesserskilled, lesser-paid employees.
This shift is happening all through the workplace—improving productivity for every company, wiping out whole categories of jobs, and raising the bar for higher-skilled ones.
Who Ate My Job?
In September 2010, Harvard University’s Lawrence Katz and MIT’s David Autor, two labor economists, produced a paper for the National Science Foundation entitled Grand Challenges in the Study of Employment and Technological Change, which helps explain how this phenomenon is playing out today.
The big change wrought by the merger of globalization and the IT revolution, argue Katz and Autor, was the creation of “a labor market that greatly rewards workers with college