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Tyler Cowen on Inequality, the Future, and Average is Over
Tyler Cowen of George Mason University and blogger at Marginal Revolution talks with EconTalk host Russ Roberts about his latest book, Average is Over. Cowen takes a provocative look at how the growing power of artificial intelligence embodied in machines and technologies might change labor markets and the standard of living. He tries to predict which people and which skills will be complementary to smart machines and which people and which skills will struggle. Listen: Tyler Cowen on Inequality, the Future, and Average is Over
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The American Dream, RIP?
This article originally appeared in The Economist COULD America survive the end of the American Dream? The idea is unthinkable, say political leaders of right and left. Yet it is predicted in “Average is Over”, a bracing new book by Tyler Cowen, an economist. Mr Cowen is no stranger to controversy. In 2011 he galvanised Washington with “The Great Stagnation”, in which he argued that America has used up the low-hanging fruit of free land, abundant labour and new technologies. His new book suggests that the disruptive effects of automation and ever-cheaper computer power have only just begun to be felt. It describes a future largely stripped of middling jobs and broad prosperity. An elite 10-15% of Americans will have the brains and self-discipline to master tomorrow’s technology and extract profit from it, he speculates. They will enjoy great wealth and stimulating lives. Others will endure stagnant or even falling wages, as employers measure their output with “oppressive precision”. Some will thrive as service-providers to the rich. A few will claw their way into the elite (cheap online education will be a great leveller), bolstering the idea of a “hyper-meritocracy” at work: this “will make it easier to ignore those left behind”. Mr Cowen’s vision is neither warm nor fuzzy. In his future, mistakes and even mediocrity will be hard to hide: eg, an ever-expanding array of ratings will expose so-so doctors and also patients who do not take their medicines or otherwise spell trouble. Young men will struggle in a labour market that rewards conscientiousness over muscle. With incomes squeezed, many Americans will head to the sort of cheap, sun-baked sprawling exurbs that give the farmers’-market-and-bike-lanes set heartburn. Many will accept rotten public services in exchange for low taxes. This may sound a bit grim, but it reflects real-world trends: 60% of employers already check the credit ratings of job candidates; young male unemployment is high and migrants have been flooding to low-tax, low-service Texas for years. The left is sure that inequality is a recipe for riots. Mr Cowen doubts it. The have-nots will be too engrossed in video games to light real petrol bombs. An ageing population will be rather conservative, he thinks. There will be lots of Tea-Party sorts among the economically left-behind. Aid for the poor will be slashed but benefits for the old preserved. He does not fear protectionism, as most jobs that can… Read more…
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Tyler Cowen on the Middle Class
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Economist Tyler Cowen On The End Of Average
US inequality is hitting record highs again, we learned last week. Higher than Gatsby levels. The USA pins the needle for inequality globally. Higher than China. Higher than India. Americans have generally been unruffled by that, but then the 20th Century brought our greatest time of equality. In this century, says my guest economist Tyler Cowen, inequality will explode in the US. You’ll be rich or you’ll be Mexico-style poor. He’s OK with that. Nobel Prize-winning economist Joe Stiglitz is not. They’re both with us. Up next On Point: equality and inequality in America. Listen: Economist Tyler Cowen On The End Of Average
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Tyler Cowen Predicts an Imbalanced Economic Future
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A Dearth of Investment in Young Workers
This article originally appeared in The New York Times ONE of the most troubling features of the slow economic recovery is that it has largely bypassed young people. This doesn’t bode well for the future of the American economy. For Americans aged 16 to 24 who aren’t enrolled in school, the employment picture is grim. Only 36 percent are working full time, down 10 percentage points from 2007. Longer term, the overall labor-force participation rate for that age group has dropped 20 percentage points for men and 14 points for women since 1989. This lack of jobs will damage the long-term careers of a big chunk of the next working generation. Not working after you finish school very often means missing out on developing the skills and habits that will serve you well later on. The current employment numbers are therefore like a telescope into the future labor market: a 23-year-old who is working part time as a dog walker, yoga instructor or retail clerk may be having fun, but perhaps will receive fewer promotions as a 47-year-old. One culprit in this situation may be the higher minimum wage enacted in 2009, but the root causes run much deeper. Employers appear to be more risk-averse, more concerned about overhead costs and less willing to invest in developing young workers’ skills. And that seems true across a wide variety of sectors. In the legal profession, for instance, there is less interest in hiring junior associates and grooming them for partner status. Colleges and universities are often more interested in hiring adjuncts than tenure-track young faculty members. And publishing houses, instead of providing a big advance upfront and investing in young authors over a series of books, now expect many writers to earn their share of a book’s revenue through royalties. If we consider how many jobs are being advertised, without asking whether they are being filled, the labor market seems to be booming. If we measure labor market progress in terms of actual hiring, however, it’s clear that the economy is recovering slowly. Employers appear to be looking around for workers but then holding out for the very best candidates, and, if need be, making do with few new hires or none at all. These are signs of a world where next year’s business income is less certain, and many employers take greater care to keep weaker workers off the corporate team. Some employers would… Read more…