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By Root 1181 0

In a now famous essay in Foreign Affairs, he argues that while we recognize the pressures placed on manufacturing jobs by international competition, technology ensures that service jobs are now similarly exposed. Since the service sector is a much larger part of the economy, Blinder estimates that 28 million to 42 million jobs will be “susceptible” to being shipped offshore—jobs such as those of customer-service representative and stock analyst, which we tend to think of as local. Blinder understands the benefits of free trade but worries that the new wave of offshoring is so big and fast that Western societies will have difficulty adjusting. The crucial distinction for the future, he argues, might be not between highly educated and less educated workers but between those jobs that can be done abroad and those—such as that of nurse or pilot—that cannot.

You can divide the American workforce in many ways, but however you slice it, you see the same trend. People who get paid a decent wage for skilled but routine work in manufacturing or services are getting squeezed by a pincer movement of technology and globalization. David Autor, an MIT economist, has done an important study on what he calls “the polarization of job opportunities” in America. Autor finds that job growth divides neatly into three categories. On one side are managerial, professional, and technical occupations, held by highly educated workers who are comfortable in the global economy. Jobs have been plentiful in this segment for the past three decades. On the other end are service occupations, those that involve “helping, caring for, or assisting others,” such as those of security guard, cook, and waiter. Most of these workers have no college education and get hourly wages that are on the low end of the scale. Jobs in this segment, too, have been growing robustly.

In between are the skilled manual workers and those in white-collar operations like sales and office management. These jobs represent the beating heart of the middle class. Those in them make a decent living, usually above the median family income ($49,777), and they mostly did fine in the two decades before 2000. But since then, employment growth has lagged the economy in general. And in the Great Recession, it has been these middle-class folks who have been hammered. Why? Autor is cautious and tentative, but it would seem that technology, followed by global competition, has played the largest role in making less valuable the routine tasks that once epitomized middle-class work.

As this hollowing out of the middle suggests, there really isn’t a Third World anymore. China, India, and the United States all compete on a level playing field. What, then, is America’s competitive advantage? The answer lies in something the economist Martin Wolf noted. Describing the changing world, he wrote that economists used to discuss two basic concepts, capital and labor. But these are now commodities, widely available to everyone. What distinguishes economies today are ideas and energy. A country must be a source of either ideas or energy (meaning oil, natural gas, coal, etc.). The United States has been and can be the world’s most important, continuing source of new ideas, big and small, technical and creative, economic and political. But to do that, it has to make some significant changes.

A Do-nothing Politics

The United States has a history of worrying that it is losing its edge. This is at least the fourth wave of such concern since 1945. The first was in the late 1950s, a result of the Soviet Union’s launch of the Sputnik satellite. The second was in the early 1970s, when high oil prices and slow growth in the United States convinced Americans that Western Europe and Saudi Arabia were the powers of the future, and President Nixon heralded the advent of a multipolar world. The most recent one arrived in the mid-1980s, when most experts believed that Japan would be the technologically and economically dominant superpower of the future. The concern in each of these cases was well founded, the projections