by Paul Krugman | OP-ED columnist, The New York Times
“In 1786, the cloth workers of Leeds, a wool-industry center in northern England, issued a protest against the growing use of ‘scribbling’ machines, which were taking over a task formerly performed by skilled labor. ‘How are those men, thus thrown out of employ to provide for their families?’ asked the petitioners. ‘And what are they to put their children apprentice to?’
“Those weren’t foolish questions. Mechanization eventually — that is, after a couple of generations — led to a broad rise in British living standards. But it’s far from clear whether typical workers reaped any benefits during the early stages of the Industrial Revolution; many workers were clearly hurt. And often the workers hurt most were those who had, with effort, acquired valuable skills — only to find those skills suddenly devalued.
“So are we living in another such era? And, if we are, what are we going to do about it?
“Until recently, the conventional wisdom about the effects of technology on workers was, in a way, comforting. Clearly, many workers weren’t sharing fully — or, in many cases, at all — in the benefits of rising productivity; instead, the bulk of the gains were going to a minority of the work force. But this, the story went, was because modern technology was raising the demand for highly educated workers while reducing the demand for less educated workers. And the solution was more education.
“Now, there were always problems with this story. Notably, while it could account for a rising gap in wages between those with college degrees and those without, it couldn’t explain why a small group — the famous ‘one percent’ — was experiencing much bigger gains than highly educated workers in general. Still, there may have been something to this story a decade ago.
“Today, however, a much darker picture of the effects of technology on labor is emerging. In this picture, highly educated workers are as likely as less educated workers to find themselves displaced and devalued, and pushing for more education may create as many problems as it solves.
“I’ve noted before that the nature of rising inequality in America changed around 2000. Until then, it was all about worker versus worker; the distribution of income between labor and capital — between wages and profits, if you like — had been stable for decades. Since then, however, labor’s share of the pie has fallen sharply. As it turns out, this is not a uniquely American phenomenon. A new report from the International Labor Organization points out that the same thing has been happening in many other countries, which is what you’d expect to see if global technological trends were turning against workers.
“And some of those turns may well be sudden.”