Things to Come

In a thought-provoking column in the New York Times Thomas Edsall explains why the drift of working class voters away from the Democrats is not at all surprising:

In a September 2022 paper, “Tasks, Automation and The Rise In U.S. Wage Inequality,” Acemoglu and Pascual Restrepo, an economist at Boston University, found that automation “accounts for 50 percent of the changes in the wage structure” from 1980 and 2016, reducing “the real wage of high-school dropout men by 8.8 percent and high-school dropout women by 2.3 percent.”

Task displacement — the replacement of workers with machines — has wide-ranging adverse impacts, they write: “A 10 percentage point higher task displacement is associated with a 4.4 percentage point decline in employment between 1980 and 2016, and a similar 3.5 percentage point increase in nonparticipation (in the work force).”

Dani Rodrik, an economist at Harvard’s Kennedy School, emailed me to say that “it is extremely unlikely that we will create an employment miracle in manufacturing.” Even if the CHIPS and Science Act, which President Biden signed in August, is “successful in reshoring some manufacturing,” he argued,

I am afraid that will do very little to create good jobs for U.S. workers without college or advanced degrees. Semiconductors and advanced manufacturing are among the most capital- and skill-intensive sectors in the economy and ramping up investment in them — as worthwhile as it may be on geopolitical grounds — is one of the least effective ways of increasing demand for labor where it is most needed.

In addition, Rodrik wrote:

Many of America’s competitors have successfully increased the share of manufacturing in G.D.P., including Taiwan and South Korea. But in none of these cases has the employment share of manufacturing bounced back up. In fact, to my knowledge, there has never been a case of sustained reversal in the downward trend of the manufacturing employment among advanced economies.

There is, Rodrik observed,

broad and compelling evidence, from Europe as well the United States, that globalization-fueled shocks in labor markets have played an important role in driving up support for right-wing populist movements. This literature shows that these economic shocks often work through culture and identity. That is, voters who experience economic insecurity are prone to feel greater aversion to outsider groups, deepening cultural and identity divisions in society and enabling right-wing candidates to inflame (and appeal to) nativist sentiment.

In an April 2021 paper, “Why Does Globalization Fuel Populism? Economics, Culture, and the Rise of Right-Wing Populism,” Rodrik wrote that he studied

the characteristics of “switchers” in the 2016 presidential election — voters who switched to Trump in 2016 after having voted for Obama in 2012. While Republican voters were in general better off and associated themselves with higher social status, the switchers were different: they were worried about their economic circumstances and did not identify themselves with the upper social classes. Switchers viewed their economic and social status very differently from, and as much more precarious than, run-of-the-mill Republican voters for Trump. In addition to expressing concern about economic insecurity, switchers were also hostile to all aspects of globalization — trade, immigration, finance.

The irony of this abounds. The low-hanging fruit for manufacturing and lot of other jobs for individuals without college or professional degrees was already picked long ago. Why, then, do we continue to import such workers in the millions? Furthermore the task displacement that is primed to bear the greatest fruit is among professionals. I’ll just cite one example. Judges can be replaced by expert systems. Not only would such systems be as good as human judges they would be better. They could keep track of every precedent, know the entire background to the extent it could be known. They would not be swayed by emotion, political considerations, or personal benefit.

What prevents that? It isn’t the technology. The technology was available decades ago. The professionals themselves prevent it.