June 16, 2013

MEGAN MCARDLE: When Work Disappears: What do we do with people whose livelihoods are destroyed? This phenomenon is appearing all over. My colleague Ben Barton is working on a very interesting book about the future of the legal profession that catalogues all the ways technology and market forces are chewing up lawyers. When I finished his (surprisingly sunny) conclusion, I emailed him this quote from Arthur Allen Leff:

The radically unknown is always frightening (at least to those making out all right as is), especially considering how many lives can be lashed to pieces as a new distributional curve flails about, desperately seeking a new equilibrium.

There’s a lot of flailing going on, and there has for years been insufficient concern about what all the folks on the left half of the bell curve are going to do with their lives — only now it’s looking like the left 2/3 or maybe 3/4. I’m not sure what to do either. Here are my thoughts from a decade ago. I note that when the economy picked up, we heard less of that talk for a while. But I do think there’s something structural going on, not just an economic cycle.

The interesting thing, too, is that Paul Krugman, in the column Megan is responding to, flat-out admits that sending people to college doesn’t help much. In fact, it can hurt. For the book I’m working on now (basically a combination and substantial expansion of The Higher Education Bubble and The K-12 Implosion) I’ve been looking at research finding that students going in to college with identical “predictors” in terms of grades and test scores have very different trajectories coming out based on family income. The “strivers” with good scores but poor family backgrounds may actually do worse than if they hadn’t gone to college at all, as they often get distracted into partying and graduate with low grades and an overhang of student debt, winding up in jobs that they could have gotten without “investing” in college at all. One student’s father is quoted as comparing colleges’ sales pitches to TV infomercials. . . .

Of course, it’s not just technology that’s killing jobs. Regulation is killing jobs, too:

About 40% of Mr. Puzder’s employees are part-time and therefore exempt from ObamaCare’s coverage mandates. “That percentage of employees will probably go up. Everybody is hiring more part-time employees,” he says, though he is quick to add that “we’re not firing anyone to hire” part-time workers. “Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours.”

Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. “You’re going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don’t have to pay benefits for any of those things.”

Krugman doesn’t seem focused on this problem.