Wednesday, July 30, 2014

"Libertarian author" says economic growth must overcome inequality from a job market bifurcated by technology

duarto Cowen has an interview in the New York Times, with Tyler Cowen, “libertarian” author of “Average Is Over: Powering America Beyond America Beyond the Age of the Great Stagnation” (Dutton, 2013), in a column called “Income Inequality and the Ills that Befall It”, in the print version in the New York Times Business Day on Wednesday, link here
Cowen believes that technology has bifurcated the job market, making urgent skills highly compensated (sometimes even for teenage workers self-taught well enough) but replacing more humdrum jobs with automation.  Cowen believes that economic growth is even more critical now to raise living standards for those with lower incomes.   Those with higher “IQ’s” will always accumulate more wealth.   
Yet there can be a problem in that those with higher living standards still depend on unseen sacrifices by others.  There are also some manual jobs that Americans don’t want (like migrant harvest workers) and dangerous work, done in difficult conditions (like during extreme weather or storms or fire) that become more difficult to get done.  But innovation can make these jobs safer – just like it can make infrastructure more secure and can address long term problems like climate change.  

Update: Aug. 6, 2014

On Yahoo!, Aaron Task and Beth Ann Bovino argue that income inequality does hurt economic growth, and one more of education per worker would add to growth, link here. She argues also that income inequality hurts investment in critical infrastructure.  

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