Tuesday, July 10, 2012

Is labor lumpish in whitewater times?

Krugman is famously dismissive about claims of structural aspects to underemployment (though years ago he wasn't as sure). DeLong, I think, is less sure.

Krugman points to the uniformity of underemployment. If there were structural causes, wouldn't we see areas of relative strength? It seems a bit much to claim that multiple broad-coverage structural shocks would produce such a homogeneous picture.

Fortunately, I fly under the radar (esp. under Paul's), so I am free to wonder about labor in the post-AI era complicated by the the rise of China and India and the enabling effect of IT on financial fraud. Stories like this catch my attention ...

Fix Law Schools - Atlantic Vincent Rougeau  Mobile

... the jobs and high pay that used to greet new attorneys at large firms are gone, wiped away by innovations such as software that takes seconds to do the document discovery that once occupied junior attorneys for scores of (billable) hours while they learned their profession..

Enhanced search and discovery is only one small piece of the post-AI world, but there's a case to be made that it wiped out large portions of a profession. Brynjolfsson and McAfee expand that case in Race Against the Machine [1], though almost all of their fixes [1] increase economic output rather than addressing the core issue of mass disability. The exception, perhaps deliberately numbered 13 of 19, is easy to miss ...

13. Make it comparatively more attractive to hire a person than to buy more technology through incentives, rather than regulation. This can be done by, among other things, decreasing employer payroll taxes and providing subsidies or tax breaks for employing people who have been out of work for a long time. Taxes on congestion and pollution can more than make up for the reduced labor taxes.

Of course by "pollution ... tax" they mean "Carbon Tax" [1]. The fix here is the same fix that has been applied to provide employment for persons with cognitive disabilities such as low IQ and/or autism. In the modern world disability is a relative term that applies to a larger population.

If our whitewater times continue, we will either go there or go nowhere.

[1] They're popular at the "Singularity University" and their fixes are published in "World Future Society". Outcasts they are. Their fan base probably explains why the can't use the "Carbon" word, WFS/SU people have a weird problem with letter C. 

See also:

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