Paul Krugman correctly identifies the fallacy of the prevailing wisdom about education:
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, nonmanual jobs — is in the firing line. Conversely, jobs that can’t be carried out by following explicit rules — a category that includes many kinds of manual labor, from truck drivers to janitors — will tend to grow even in the face of technological progress.
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. Notably, with production workers in manufacturing down to about 6 percent of U.S. employment, there 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. Roombas are cute, but robot janitors are a long way off; computerized legal research and computer-aided medical diagnosis are already here.
And then there’s globalization. Once, only manufacturing workers needed to worry about competition from overseas, but the combination of computers and telecommunications has made it possible to provide many services at long range.
and stumbles as he nears the finish line:
We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages.
Can he really believe that unions will be able, in the long term, to garner wages for their members above the market clearing price? Unions work by limiting membership; those able to perform the work and willing to perform it for a wage below the union wage become unemployed. That’s how the system works. Even a 100% unionized workforce would just drive jobs overseas faster or make automation that much more attractive.
My solution is don’t raise the bridge, lower the water. Strip the subsidies from those who are getting them now. Examples: our current banking laws constitute an enormous subsidy to bankers. They are not laws of nature.