Will Middle-Wage Jobs Disappear?

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A few controversies ago, researcher-scholar Vivek Wadhwa and TechCrunch's Michael Arrington got into it over whether it makes sense for kids with entrepreneurial leanings to get a college degree.


After all, as this SiliconValley.com piece points out, Microsoft's Bill Gates wasn't the only tech entrepreneur to drop out. So did Apple's Steve Jobs, Oracle's Larry Ellison, and Yahoo's Jerry Yang and David Filo. (It also lists Google's Sergey Brin and Larry Page, though they left PhD programs at Stanford University. I don't think that counts.)


Then there was a study of 2,300 undergraduates that found 45 percent showed no significant improvement in critical thinking, complex reasoning and writing by the end of their sophomore years. As reported in the book, "Academically Adrift: Limited Learning on College Campuses," the study found that the students simply weren't asked to do much. Half of them had no class that required writing 20 pages during the previous semester and one-third did not have a course that required reading even 40 pages a week, according to this Associated Press story on Yahoo News. After four years, 36 percent of students showed no improvement. (And business schools wonder why MBA candidates can't write?)


That's the backdrop for the buzz about a piece in The New York Times by Paul Krugman pointing to legal research as an example, saying:

... the idea that modern technology eliminates only menial jobs, that well-educated workers are clear winners, may dominate popular discussion, but it's actually decades out of date.
The fact is that since 1990 or so the U.S. job market has been characterized not by a general rise in the demand for skill, but by "hollowing out": both high-wage and low-wage employment have grown rapidly, but medium-wage jobs-the kinds of jobs we count on to support a strong middle class-have lagged behind.

My colleague Lora Bentley, who is a lawyer, sent back my note on Krugman's piece and this Times article on the rise of ever-smarter e-discovery software with a one-word reaction: depressing.


Krugman says:

The belief that education is becoming ever more important rests on the plausible-sounding notion that advances in technology increase job opportunities for those who work with information-loosely speaking, that computers help those who work with their minds, while hurting those who work with their hands.

He points out that computers excel at routine tasks, "cognitive and manual tasks that can be accomplished by following explicit rules." And that includes the work of many so-called "knowledge workers." He goes on:

Therefore, any routine task-a category that includes many white-collar, nonmanual jobs-is in the firing line. Conversely, jobs that can't be carried out by following explicit rules-a category that includes many kinds of manual labor, from truck drivers to janitors - will tend to grow even in the face of technological progress.

My colleague Ann All has been following the rise of automation for a while, noting that offshoring isn't the only threat to U.S. jobs.


Meanwhile, this Los Angeles Times piece points to the reaction of economist Brad DeLong, who worries that U.S. wages will take a hit. He says it's a matter of supply and demand. As more students go to college, their skills are not so hard to find. Of course in IT, while many jobs babysitting equipment have disappeared, employers still say they have real difficulty finding people with other specific skills. For instance, I've recently written about three hot disciplines-business analysts, analytics and health informatics-that are crying out for highly skilled workers.


The LA Times piece also quotes automation expert Martin Ford, who takes a darker view:

If there's anything left of the American Dream, it is the idea that if you work hard to educate yourself, you'll have a better shot at prosperity. If that promise comes up short, it may ultimately destroy the incentive for broad-based pursuit of education.

He suggests this could stymie our whole economy, which is based on consumption:

When a worker is replaced by a machine, that machine does not go out and consume. So we should be very worried-not just amused-that robots are replacing lawyers, and that Watson can beat us at "Jeopardy!"

Do you agree? Do you see this as our future?