Forex

The future of work

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ATLANTA – I hadn’t driven far beyond the city before I came across what seemed to me to be the future, in the form of a Waffle House beside the Interstate highway.   These restaurants are ubiquitous across the South; in method, if not in menu, they are equal and opposite to McDonald’s.

At McDonald’s, nearly all the workers are in the back, tending the machines. At Waffle House, everybody is out front: ten or twelve staffers standing around behind a counter, everybody from the manager to a pair of griddle cooks whose backs were turned to me. The little restaurant contained a dozen counter seats and perhaps a dozen booths.

I was thinking about the lecture I had heard 36 hours before at the annual meeting of the Allied Social Science Associations, Work of the Past, Work of the Future, by David Autor, of the Massachusetts Institute of Technology.  Autor is best-known for his description, with David Dorn and Gordon Hanson, of the geography of the rapid decline of US manufacturing work, especially after China entered the World Trade Organization in 2000 (“The China Shock”).

Ben Bernanke, incoming American Economic Association president, had invited him to speak. The Ely lecture is one occasion at the meetings, apart from the AEA presidential address, when nearly everything else comes to a halt.

Autor began by reminding listeners of the shrinking middle of the wage structure since 1980. Employment in high skill categories has been steadily rising since then (management, professional, technician), and in low-skill jobs (health and personal services, cleaning and protection, operator/laborer); but more steadily declining in middle-skill employment (production, office administration, and sales). Middle-skill work had has been disappearing mainly in the cities, as workers have been replaced by software of one sort or another.

Next he described his surprise at the geography of the trend. Historically, rural areas were younger than the cities. He knew that the average population of rural areas had grown older. He had not known, until 72 hours before, that cities had become relatively younger than the countryside.

“I was so amazed by the figure that Juliette [Fournier, his co-author] and I did a complete clean room operation and reconstructed all the data from the get-go,  just to be sure that there was not an error.”

There wasn’t.  In the 1950s, rural counties were an average five years younger than cities.  By the 1990s, city and country were about the same.  But by 2010, cities were six years younger than rural areas.  Rural counties had aged twelve years in the second half of the twentieth century, thanks to the emptying-out of the young; cities had aged an average of only two.

Why?  Because the kids who used to move to cities for school, only to leave for the suburbs or for home, were now staying there – perhaps because cities are safer than they used to be, perhaps because wages are higher there, perhaps because opportunity is greater.  That’s great, said Autor, but it is not clear there is a similar set of opportunities anywhere for less-educated workers of any age.

Autor asked whether new jobs coming into existence might fill in the middle, or contribute further to the bifurcation. It is not as easy to categorize new jobs as it sounds. Using a new measure based on periodic revisions to occupational classifications collected by the Census Bureau, Autor sorted emergent work into three broad categories: “frontier jobs”; “wealth work”; and “last-mile” jobs.

The terms were his; the method was developed a decade ago by economist Jeffrey Lin, of the Federal Reserve Bank of Philadelphia.  The Census tracks 500 or so broad occupational groups, but underlying are some 36,000 job titles within them.

Frontier work, or Jetson jobs, after the early sixties sitcom of a family living in the distant future, are what you would expect:  high-wage jobs requiring much education, usually predominantly performed by men. The frontier keeps moving: in the 1980s, the category included word-processing supervisors and drone pilots; today, molecular physicists, wind-turbine technicians, and echo cardiographers.

Wealth work involves catering to the comfort and well-being of the affluent, A large or larger set of jobs than frontier, requiring low to moderate education, a majority of them performed by women.  New jobs in the 1980s included gift wrappers and hypnotherapists.  By the 1990s, family marriage counselors, finger nail formers, and baristas had appeared.  In the Oughts, oyster openers and sommeliers appeared in sufficient numbers to rate a mention.

Last mile jobs take their name, not from the distance to someone’s front door, but rather from the length of time before artificial intelligence software takes over the task completely. These are the husks of jobs which for the most part already have been  automated, said Autor;  Ghost Work: How to Stop Silicon Valley from Building a Global Underclass, in the title of Microsoft anthropologist Mary Gray’s forthcoming book.  From tamale-machine feeders in the 1980s to vending- machine attendants in the 1990s to Amazon packagers and underground cable locators today, these jobs are grueling, low paid, and most probably won’t be around for long. Often they can be done almost anywhere in the world.

Wages? The new work doesn’t pay much differently than old work in the present day:  $18.78 an hour for the average of all workers; $26.89 for workers in Frontier jobs; $18.49 for Wealth work, and $15.28 for the Last Mile trades. In short, said Autor, it is a great time to be young and educated, but it isn’t clear where a land of opportunity is to be found for adults with no college.

Some of this will be familiar to readers of The New Geography of Jobs (Houghton Mifflin Harcourt, 2012), by Enrico Moretti, of the University of California at Berkeley. That book had same galvanizing effect on impressions of the changing landscape of opportunity, as did Edge City: Life on the New Frontier (Anchor, 1991), by Joel Garreau, twenty-five years before.  Moretti vaulted to the editorship of the Journal of Economic Perspectives.

Where Autor went an important step beyond, it seems to me, is in his assessment of rural opportunity. Work in non metropolitan areas is changing much more slowly than elsewhere, he said: job structure, skill structure, wage structure, are all more stable. “People often say… I’ve said it myself, Why aren’t people moving out of Tennessee to some big city where they could get higher wages?  Well, it’s much less obvious to me than before that the opportunity really exists…”

He concluded with a conjecture: “I suspect the fall in geographic mobility means something different from what I used to think – barriers of some sort, costs in the way.  Increasingly I see it as a slowing of the moving out of places because they were thought to be unattractive, [because] increasingly, they are [attractive].

And that’s what I saw in the Georgia Waffle House, and the rural and semi rural counties around it. Wealth is a relative phenomenon, and as long as you can afford cable television and $5 for a waffle, some sausage, and a cup of coffee, life in the countryside may be preferable in many respects to work in the office towers of downtown Atlanta.  If you can afford to, you might as well stay home.

Returning to Somerville, Massachusetts, a rapidly gentrifying city of 100,000 situated next to Cambridge and just across the Charles River from Boston, I heard one phrase in particular of Autor’s lecture ringing in my ears – to the effect that heightened pursuit of opportunity in cities had implications for politics and social structure there.

In a Democratic primary in Massachusetts’ Seventh Congressional District last September, Ayanna Pressley defeated Michael Capuano.  Capuano was a ten-term progressive Congressman well positioned in the Democratic Party’s’s leadership. Pressley was a Boston city councilor who had successfully led a campaign for more city liquor licenses. Here is what one veteran political analyst had to say about the race.

Before Election Day, experts had pegged the probable turnout at between 50,000 and 80,000 – the kind of turnout that in this district is historically older and white, an advantage for Capuano.  In fact, he won 42,000 votes, a total that in any other year would have meant a win.  This time it meant an 18,000-vote drubbing

Why? 106,000 people showed up to vote in this primary, in effect at least 25,000 new voters. And given where turnout surged, it’s clear the bulk of these voters came from Millennial and Gen X outposts, where voters were primed to vote for a candidate like Pressley – young, female and African American and, in their minds, the true progressive in the race.

Somerville, Capuano’s hometown, is one such outpost.  Formerly a blue-collar city known derisively as Slummerville, today it is home to soaring real estate prices, trendy restaurants and a largely white hipster and tech worker population.  Eighteen thousand people voted in a city that generally sees 10,000 or 12,000 for a primary or municipal election.  Capuano, who played an instrumental role in transforming the city as mayor in the 90’s, eked out a slim 137 vote in the thriving city he helped create.

Trump’s misogyny and racism did the rest. The changing composition of superstar cities is a big story on every beat.

The post The future of work appeared first on Economic Principals.

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