The new politics of time

by | Jan 17, 2014

Real terms median wages have been stagnating in developed countries since the mid-1970s, when – as David Schweickart notes in this terrific paper (h/t Casper Ter Kuile) – growth in wages first became uncoupled from growth in productivity. So what caused this shift, which is right at the heart of the issue of the ‘squeezed middle’?

Partly, of course, it’s about the effects of trade, as globalisation meant that developed country workers found themselves competing with workers in the developing world. But, argues economist David Autor, the more significant factor has actually been technology, and the automation of routine work. The effect, he continues, has been what he calls the ‘polarisation’ of the job market, with job opportunities declining in both white and blue collar ‘middle-skill’ occupations.

This week’s Economist has a cover story on technology and jobs, observing that what we’ve seen so far is just the beginning (emphasis added):

From driverless cars to clever household gadgets (see article), innovations that already exist could destroy swathes of jobs that have hitherto been untouched. The public sector is one obvious target: it has proved singularly resistant to tech-driven reinvention. But the step change in what computers can do will have a powerful effect on middle-class jobs in the private sector too.

Until now the jobs most vulnerable to machines were those that involved routine, repetitive tasks. But thanks to the exponential rise in processing power and the ubiquity of digitised information (“big data”), computers are increasingly able to perform complicated tasks more cheaply and effectively than people. Clever industrial robots can quickly “learn” a set of human actions. Services may be even more vulnerable. Computers can already detect intruders in a closed-circuit camera picture more reliably than a human can. By comparing reams of financial or biometric data, they can often diagnose fraud or illness more accurately than any number of accountants or doctors. One recent study by academics at Oxford University suggests that 47% of today’s jobs could be automated in the next two decades.

So what should we do about this? The Economist leader concludes by arguing that the approach favoured by the left (and now George Osborne too) – big hikes in the minimum wage – is dead wrong, in that it will just accelerate the shift from humans to computers. Instead, they argue, “better to top up low wages with public money so that anyone who works has a reasonable income, through a bold expansion of the tax credits that countries such as America and Britain use”.

That’s a fair point, but it doesn’t really engage with the larger issue, of who harvests the benefits of the extraordinary productivity gains we’ll see over the next 20 years. Last week, I quoted Keynes speculating on the world in 2030, and imagining an economy in which

…we shall use the new-found bounty of nature quite differently from the way in which the rich use it to-day, and will map out for ourselves a plan of life quite otherwise than theirs … What work there still remains to be done will be as widely shared as possible – three hour shifts, or a fifteen-hour week …

Might the avalanche of technology coming our way bring that vision within reach? One interesting ‘weak signal’ in the background is the new interest – from both left and right, as the NYT’s Annie Lowrey observed in November last year – in the idea of an unconditional basic income paid to all, as of right (not as a means-tested benefit that depends on being in work or in poverty, therefore).

As the Economist pointed out in a response to her piece, a universal payment along these lines wouldn’t do much to reduce inequality of income (never mind wealth). But it would go a long way towards giving everyone, rather than just capital, a share of the winnings from technology, and the beginnings of a strategy for dealing with a world in which there’s less work to be done.


  • Alex Evans

    Alex Evans is founder of the Collective Psychology Project, which explores how we can use psychology to reduce political tribalism and polarisation, a senior fellow at New York University, and author of The Myth Gap: What Happens When Evidence and Arguments Aren’t Enough? (Penguin, 2017). He is a former Campaign Director of the 50 million member global citizen’s movement Avaaz, special adviser to two UK Cabinet Ministers, climate expert in the UN Secretary-General’s office, and was Research Director for the Business Commission on Sustainable Development. He was part of Ethiopia’s delegation to the Paris climate summit and has consulted for Oxfam, WWF UK, the UK Cabinet Office and US State Department. Alex lives with his wife and two children in Yorkshire.

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