No, technology isn’t going to destroy the middle class
History suggests an Optimistic Possibility
H.C. Williams)
JAMES BESSEN | The Washington Post
Wages for ordinary workers in textile mills were stagnant for the first few decades of the Industrial Revolution. But as the technology matured, wages rose more quickly.
Is technology killing the middle class? In his new book, "Average Is Over: Powering America Beyond the Age of the Great Stagnation," Tyler Cowen predicts a world in which 10 to 15 percent of the population are skilled at working with the smart machines of the future. He believes they will become extremely wealthy, while everyone else will face stagnant or falling wages.
To many people, such a gap between a meritocratic elite and most workers would be deeply unsettling. But is the bleak world depicted by "Average Is Over" really around the corner? There are good reasons to be skeptical.
People have been predicting that technology will kill the middle class since Karl Marx. They have generally been wrong. But over the long run, technology has made large numbers of ordinary workers relatively wealthy.
Thanks to technology, the average wage in the United States today is over 10 times what it was 200 years ago, after adjusting for changes in the cost of living.
And what these examples show is that there are still plenty of mid-skill, mid-income jobs for people working with these new technologies.
Based on current evidence, there is no reason to think that only 15 percent of future workers will be capable of complementing machines in ways that generate significant value.
Still, it is true that in recent years, not enough well-paying jobs have been created quickly enough to offset the loss of well-paying industrial-age jobs. But history suggests that this may prove temporary for a reason that Cowen has identified: the skills needed to work with new machines often cannot be taught in school, at least not initially. The workers who have mastered those skills are mostly self-taught, and only a minority of workers have the talents required to learn in this fashion. But that doesn't mean the rest of the population can't learn these skills.
Cowen sees a growing gap between the cognitive elite and everyone else, and concludes that these trends will accelerate in the next few decades. But history suggests a more optimistic possibility: as information technology matures, the economy will create a growing number of opportunities for moderately-skilled workers to develop skills that complement intelligent machines. Once that happens, today's extreme income disparities will begin to moderate, and the plight of America's middle class will stop looking so bleak.