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Will technology, trade and outsourcing further widen the wage gap between the best- and worstpaid
workers?
Right now, the economic winds seem to be blowing that way. "America's long-term problem isn't
too few jobs," Robert Reich, the former Clinton administration labor secretary now at Brandeis
University, wrote in a Wall Street Journal opinion article last December. "It's the widening income
gap. The long-term solution is to spur upward mobility by getting more Americans a good
education, including access to college. There will be plenty of good jobs to go around. But too
few of our citizens are being prepared for them."
Without a major change in policy, such as an increase in the minimum wage or restraints on
immigration, or a seismic shift in the economy, such as a surge in unions or limits on imports, the
economic forces widening the gap between wages of winners and losers appear strong.
A lot depends on what happens to the latest victims of change, the white-collar analogs of the
steelworkers, auto workers and other blue-collar workers pushed aside by trade and technology in
the 1980s and 1990s. Some were forced to compete for poorly paid jobs with unskilled workers,
including recent immigrants, pushing wages at the bottom down. Others, often with government
aid, got skills needed to move up a notch.
"Rather than thinking of a career ladder," says Mr. Lorenzo, the Michigan community-college
president, "we've started to refer to it as rock climbing. It's no longer a rung-by-rung clear linear
progression." Some auto mechanics never mastered the repair of cars as manufacturers stuffed
them with computer chips; others learned how to diagnose the computerized auto engine as well
as the faulty fuel pump and prospered.
Today, the sophistication of computers and spread of overseas outsourcing threaten many of the
jobs that replaced old factory jobs.
So there is another fork in the road. The low road takes these middle-skilled workers into
competition for jobs washing, baby-sitting, serving and nursing the elite educated well-paid
classes -- pushing down wages at the bottom. The high road takes them to jobs more skilled than
those they lost, the jobs that Chinese and Indians may do someday, but not yet.
Those who bet on the high road inevitably call for better educating American workers so they
have skills to stay one step ahead of jobs that computers and foreign workers do. It is clear that to
be a successful middle-skilled worker in the U.S. takes increasingly more schooling.
But education is a slow escalator. Harvard University President Lawrence Summers calls it "the
ultimate act of faith in the future."
"There are two kinds of lies that politicians tell about outsourcing," says Mr. Levy, the MIT
economist. "One is that we can turn it all back. But even if you cut off all trade, technology can do
the same things to workers. The other is that education is all that matters. That's true, of course,
but only in the long run."
workers?
Right now, the economic winds seem to be blowing that way. "America's long-term problem isn't
too few jobs," Robert Reich, the former Clinton administration labor secretary now at Brandeis
University, wrote in a Wall Street Journal opinion article last December. "It's the widening income
gap. The long-term solution is to spur upward mobility by getting more Americans a good
education, including access to college. There will be plenty of good jobs to go around. But too
few of our citizens are being prepared for them."
Without a major change in policy, such as an increase in the minimum wage or restraints on
immigration, or a seismic shift in the economy, such as a surge in unions or limits on imports, the
economic forces widening the gap between wages of winners and losers appear strong.
A lot depends on what happens to the latest victims of change, the white-collar analogs of the
steelworkers, auto workers and other blue-collar workers pushed aside by trade and technology in
the 1980s and 1990s. Some were forced to compete for poorly paid jobs with unskilled workers,
including recent immigrants, pushing wages at the bottom down. Others, often with government
aid, got skills needed to move up a notch.
"Rather than thinking of a career ladder," says Mr. Lorenzo, the Michigan community-college
president, "we've started to refer to it as rock climbing. It's no longer a rung-by-rung clear linear
progression." Some auto mechanics never mastered the repair of cars as manufacturers stuffed
them with computer chips; others learned how to diagnose the computerized auto engine as well
as the faulty fuel pump and prospered.
Today, the sophistication of computers and spread of overseas outsourcing threaten many of the
jobs that replaced old factory jobs.
So there is another fork in the road. The low road takes these middle-skilled workers into
competition for jobs washing, baby-sitting, serving and nursing the elite educated well-paid
classes -- pushing down wages at the bottom. The high road takes them to jobs more skilled than
those they lost, the jobs that Chinese and Indians may do someday, but not yet.
Those who bet on the high road inevitably call for better educating American workers so they
have skills to stay one step ahead of jobs that computers and foreign workers do. It is clear that to
be a successful middle-skilled worker in the U.S. takes increasingly more schooling.
But education is a slow escalator. Harvard University President Lawrence Summers calls it "the
ultimate act of faith in the future."
"There are two kinds of lies that politicians tell about outsourcing," says Mr. Levy, the MIT
economist. "One is that we can turn it all back. But even if you cut off all trade, technology can do
the same things to workers. The other is that education is all that matters. That's true, of course,
but only in the long run."
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