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Is there a more endangered species than the American worker? Threats abound: Offshoring, robots, trade, the gig economy. And even if they survive, wages will continue to stagnate. Same as it ever was for this victimized creature of modern, globalized, tech-enabled capitalism.
Or perhaps the US labor market is a bit more resilient than assumed. And I’m not just talking about the low jobless rate and rising real wages, especially at the bottom. So many worrisome predictions just haven’t panned out.
For instance — back in 2007, economist Alan Blinder predicted the combo of fast computers and broadband internet made nearly 30 percent of jobs offshore-able. But a new analysis by Upwork economist Adam Ozimek found “no relationship between job growth and offshoring risk.” Instead of hiring overseas workers, there’s a growing relationship with remote work right here in America. Ozimek: “By enabling more remote work opportunities, technological advancement provides greater freedom, more flexibility, shorter commutes, and the potential to redistribute those opportunities within the US.”
Or remember how the fast-expanding gig economy was going to turn many of us into piecemeal workers struggling to cobble together a decent living from an Uber drive here and assembling Ikea furniture there? Yet in The New York Times, economics writer Neil Irwin points out that “the share of the work force earning income reported on IRS Form 1099 — the typical way that independent contractors are paid — rose by one percentage point from 2007 to 2016,” according to a recent paper. What’s more, that research also found growth in the IC sector was “driven by individuals whose primary annual income derives from traditional jobs and who supplement that income with platform-mediated work.” So we are not yet a nation of full-time part-timers.
There’s plenty more good news if one cares to look. Decades of stagnating wages? Using the PCE inflation gauge, the wages of a typical worker have increased by 32 percent over the past three decades, notes my AEI colleague Michael Strain in a Bloomberg column. The China trade shock? It may have also accompanied a China trade boom. And while we don’t know yet how AI and greater automation will affect jobs in the coming years, there’s good reason to think machines will as always complement human workers and create new tasks rather than render us obsolete. Of course, none of this nearly fits into the “capitalism is broken” thesis.
Perhaps the US labor market is a bit more resilient than assumed. So many worrisome predictions just haven’t panned out.
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