Paul Krugman on “degrees and dollars”

In a recent column in the New York Times, economist Paul Krugman sought to refute the conventional wisdom that more education automatically leads to increased economic opportunity:

The belief that education is becoming ever more important [to individuals’ economic success] 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.

Some years ago, however, the economists David Autor, Frank Levy and Richard Murnane argued that this was the wrong way to think about it. Computers, they pointed out, excel at routine tasks, “cognitive and manual tasks that can be accomplished by following explicit rules.” 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.

And here’s the thing: Most of the manual labor still being done in our economy seems to be of the kind that’s hard to automate…

Krugman argues that the kinds of jobs that fueled the rise of the American middle class during the 20th Century are decreasing while relatively few new high-skill and low-skill jobs replace them.


2 responses to “Paul Krugman on “degrees and dollars”

  1. Myles Boylan

    As an economist that studies the impact of technology, I agree that technological advances have rendered obsolete many jobs that were once the bulward of the American middle class. As a result, we have become overwhelmingly a nation of service providers; but many of these services are purchased on a discretionary basis, creating insecure jobs. Another source of job losses is the huge number of jobs that have been created by international companies with American names (that were once predominantly US-based) in other nations (or moved from the US there). Even 911 responders in some localities are located in India! Also, there has been a large displacement of US-based firms due to competitive advantages of foreign based firms in so-called basic industries (autos, steel).

  2. Myles,

    Thanks for your thoughtful comment. If the U. S. continues to be an economy based on providing services, do you see any industries that could renew the American middle class?


    M. G. Saldivar