Don't Blame Technology for Income Inequality

Tim Noah, in a great series on the Great Divergence in American equality, advises us not to fault technology for the rich getting so much richer. He has two good reasons.

First, technology has improved in every developed country, but the Great Divergence is specific to the United States:

Cashiers, typists, welders, farmers, appliance repairmen (this last already so obsolete that no one bothers to substitute a plausible ungendered noun)--the moderately skilled workforce is hollowing out. This trend isn't unique to the United States. The Japanese have a word for it: kudoka. David Autor, an MIT economist, calls it "job polarization," and he has demonstrated that it's happening to roughly the same extent within the European Union as it is in the United States. But Autor readily concedes that computer-driven job polarization can't possibly explain the entire trend toward income inequality in the United States, because income inequality is much greater in the United States than it is in Europe.

Second, the Great Divergence started in the early 1970s, before the computer revolution mainstreamed:

Another problem that arises when you try to attribute the income-inequality trend to computers is that the Great Divergence began in the late 1970s (see Figure 2), well before most people had ever seen a personal computer. By the late 1990s, as businesses stampeded to the Internet, inequality slackened a bit. If computers were the only factor driving inequality, or even the main factor, the opposite should have happened.

Read the whole thing at Slate.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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