With a collaborator, we examine the relationship between the polarization of labor demand and technological change. Using cross-sectional data from the United States Census and a non-parametric method to decompose employment change into supply-side and demand-side effects, my research demonstrates that technology reduces the demand for mid-wage jobs. Individuals who work at the bottom and are looking to access the desirable jobs at the top must leap over a chasm of weak labor demand. While this is consistent with previous evidence, the empirical contribution is that technology also reduces the demand for jobs that require highly experienced workers. As a result, education and training are less likely to be effective in the future because skill acquisition is not by itself a solution to the central problem, especially for impoverished adults already in the labor force. This paper is available upon request. The evidence also points to a capital-intensive economy characterized by a growing ability to produce economic output alongside a growing inability to connect that output to quality employment growth.
Figure 1: Employment change 1980 - 2008, by different skill proxies
(a) Wages
(b) Age
(c) Education