Too Soon We Get Old Too Late We Get Smart

I see that the editors of the New York Times have finally gotten wise to something I’ve been pointing out for years:

Blaming robots, though, while not as dangerous as protectionism and xenophobia, is also a distraction from real problems and real solutions.

The rise of modern robots is the latest chapter in a centuries-old story of technology replacing people. Automation is the hero of the story in good times and the villain in bad. Since today’s middle class is in the midst of a prolonged period of wage stagnation, it is especially vulnerable to blame-the-robot rhetoric.

And yet, the data indicate that today’s fear of robots is outpacing the actual advance of robots. If automation were rapidly accelerating, labor productivity and capital investment would also be surging as fewer workers and more technology did the work. But labor productivity and capital investment have actually decelerated in the 2000s.

While breakthroughs could come at any time, the problem with automation isn’t robots; it’s politicians, who have failed for decades to support policies that let workers share the wealth from technology-led growth.

So far, so good. Unfortunately, they lurch from there into proposing the usual suspects:

When automation on the farm resulted in the mass migration of Americans from rural to urban areas in the early decades of the 20th century, agricultural states led the way in instituting universal public high school education to prepare for the future. At the dawn of the modern technological age at the end of World War II, the G.I. Bill turned a generation of veterans into college graduates.

When productivity led to vast profits in America’s auto industry, unions ensured that pay rose accordingly.

Corporate efforts to keep profits high by keeping pay low were countered by a robust federal minimum wage and time-and-a-half for overtime.

Fair taxation of corporations and the wealthy ensured the public a fair share of profits from companies enriched by government investments in science and technology.

IMO the problem is much simpler than that. Slow wage and productivity growth are being caused by a slack labor market which in turn has been produced by importing large numbers of foreign workers.

Chasing the will o’ the wisps of education or unionization won’t get you anything except higher wages for college administrators and union officials. Unionization was an effective way of producing higher wages during a period when the labor market was tight not slack. In other words it was the labor market not the unionization.

More on higher education later.