Then, how do we start creating new apprenticeship programs and new capital infusions to take some of the hard-working ethic of people in places like Paintsville and create jobs? And how do we use technology to allow people to stay where they are and still work?
This is the good case for technology. People often make the bad case of robots and automation taking everybody’s jobs. But what if virtual reality actually allowed you to stay in Paintsville and work for a company in Michigan? Then, you think, okay, if that’s how people are making a living, those might not be 9-to-5 jobs. Maybe they’ll have to do multiple jobs. Maybe it won’t be a union job. How are we going to have economic security then?
Lowrey: Right, how do you protect against the fissured workplace, people making poverty wages at jobs without benefits.
Khanna: That’s where the expansion of the Earned Income Tax Credit comes in. We’re not divorcing it from work, but we’re realizing two things. One that people are working hard and they’re not earning a middle-class wage. They’re not earning what they think they deserve for that work. And the nature of work has changed because unions have lost bargaining power.
The fruits of the economy and all the advantages of technology and globalization have gone far more to the investor class and the professional class and not as much to the working class. Partly because of the loss of labor unions, partly because of things like a lack of antitrust enforcement, policies that have privileged shareholder returns.
How do we make up for that? That’s where this idea came of a trillion-dollar proposal came from. We would give a 20 percent raise to the bottom 20 percent of households in the income distribution, to compensate them for the stagnancy of wages since 1979.
Lowrey: Why tie it to the Earned Income Tax Credit? This is not necessarily an argument I agree with, but if you think that automation is going to start eliminating these jobs, you’re not just going to have wage stagnation. You’re going to have a lower employment-to-population ratio, and higher unemployment.
Khanna: It’s a mixed case. I think automation will eliminate certain types of jobs—lower income, lower-skilled jobs in manufacturing. But nobody knows whether it’s going to change the job basket of the 21st century, or be net positive, or net negative.
Lowrey: So you don’t think robots are coming for everyone’s job.
Khanna: No, the statistics don’t show that.
Lowrey: It’s a common belief out there in Silicon Valley.
Khanna: The jobs of the 21st century aren’t just going to be programming robotics and advanced manufacturing. It’s going to be elder care—we have an aging population—and childcare. The 21st-century mix of jobs is probably going to be different than the 20th-century mix. If you talk to manufacturers out in Michigan, rarely do you hear, “Oh, we’ve got this problem. We’re hiring all these robots and we can’t hire people.” I’ve never heard someone tell me that. They say, “Oh, we have all these jobs but we don’t have people of the right skill set for these jobs.”