In a period of record-low productivity growth, Thomas Friedman (6/26/18) tells us the robots are taking all the jobs. Hey, no one ever said you had to have a clue to write for the New York Times. Here’s the punch line:
From 1960 to 2000, Quartz reported, US manufacturing employment stayed roughly steady at around 17.5 million jobs. But between 2000 and 2010, thanks largely to digitization and automation, “manufacturing employment plummeted by more than a third,” which was “worse than any decade in U.S. manufacturing history.”
The little secret that Friedman apparently has not heard about is the explosion of the trade deficit, which peaked at almost 6 percent of GDP ($1.2 trillion in today’s economy) in 2005 and 2006. This matters, because the reason millions of manufacturing workers lost their jobs in this period was decisions on trade policy by leaders of both political parties, not anything the robots did. That changes the story of the collapse of political parties (the theme of Friedman’s piece) a bit.
Friedman’s confusion continues in the next paragraph:
These climate changes are reshaping the ecosystem of work—wiping out huge numbers of middle-skilled jobs—and this is reshaping the ecosystem of learning, making lifelong learning the new baseline for advancement.
These three climate changes are also reshaping geopolitics. They are like a hurricane that is blowing apart weak nations that were OK in the Cold War—when superpowers would shower them with foreign aid and arms, when China could not compete with them for low-skilled work, and when climate change, deforestation and population explosions had not wiped out vast amounts of their small-scale agriculture.
The reason that highly skilled workers are benefiting at the expense of less-educated workers is because we have made patent and copyright protection longer and stronger. It is more than a little bizarre that ostensibly educated people have such a hard time understanding this.
We have these protections to provide incentives for people to innovate and do creative work. That is explicit policy. Then we are worried that people who innovate and do creative work are getting too much money at the expense of everyone else. Hmmm, any ideas here?
Remember, without patents and copyrights, Bill Gates would still be working for a living.
One more item: China competes with “low-skilled” work in the United States and not with doctors and dentists because our laws block the latter form of competition. There was nothing natural about this one, either. Yes, this is all in my (free) book, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer.
Dean Baker is a senior economist at the Center for Economic and Policy Research in Washington, DC. A version of this post originally appeared on CEPR’s blog Beat the Press (6/27/18).
Featured image: cc photo by Charles Haynes