Where Have All the Jobs Gone?

As the US presidential campaign heats up, everyone waits breathlessly for each month's employment statistics, brought to us of course by the US Department of Labor and the US Census Bureau, using data from the monthly Current Population Survey. The last two months' worth of data suggest a slowing of job growth and Thomas Edsall has taken on this issue in his blog today in the New York Times.

The issue of the disappearing middle is not new, but credible economists have added a more threatening twist to the argument: the possibility that a well-functioning, efficient modern market economy, driven by exponential growth in the rate of technological innovation, can simultaneously produce economic growth and eliminate millions of middle-class jobs.

Michael Spence, a professor at N.Y.U.’s Stern School of Business, and David Autor, an economist at M.I.T., have argued that this “hollowing out” process is a result of twin upheavals: globalization and the hyper-acceleration of technological progress.

However, it turns out that the entire discussion is about technological advance, and how that may be driving workers from the labor force (read Karl Marx's Das Capital for one of the earlier versions of this theory). Missing is the discussion about "globalization," which really means the transfer of jobs to the growing working force in developing countries (actually, Marx talked about this, too, except that he was thinking of the growing population of England, not of developing countries). If we ignore the impact of population growth on the current economic situation in the rich countries, we are never going to understand what is happening in the world.