Have computer, will earn more

June hourly wages tick up, but long-term, inequality will only grow.


Andrew Leonard
July 7, 2006 10:14PM (UTC)

The baleful influence of computers on society rears its ugly ahead again today, thanks to a New Economist link to a Bureau of Labor Statistics paper on computers and wage inequality. We've examined this before, the thesis that technological progress is the primary actor fueling the steady growth in wage inequality in the United States since 1980. But while the theory has been around for awhile, apparently empirical evidence has been in short supply. Not anymore. Using Canadian workplace survey results, two BLS researchers find clear evidence that people who use computers enjoy faster wage growth than people who don't. (But don't content yourself with firing off a few e-mails and hoping for a raise; spreadsheet users, desktop publishers and computer-aided-design whizzes get the best rewards.)

So plug that in with everything else that less-skilled workers in the industrialized world have to worry about: the deflating value of the minimum wage, the loss of union power, competition from cheap labor abroad. When technological progress itself is to blame for increasing inequality, society has a problem.

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Though you wouldn't necessarily know it from the White House spin on today's employment and wage statistics. Al Hubbard, a member of the President's Council of Economic Advisers, told MarketWatch that even though the 110,000 new jobs created in June were considerably under economist expectations, the White House is still very happy with its "34 months of consecutive job growth" and "delighted" that hourly wages grew by 3.9 percent over a year ago -- the fastest rise in five years. Finally, says Hubbard, wage growth is beginning to track along with productivity increases.

We'll see about that. With the economy generally slowing all around, the wage bump might be just a temporary blip. Oddly, a substantial portion of the growth in wage earnings came from the construction sector, which actually lost 4,000 jobs in June, likely as a result of the slowing housing sector. Hard to see how wage growth in that domain is going to keep up.

But it's the longer-term trends that are the most worrisome. Technological progress and the use of computers in the workplace aren't going away; if those factors truly are the major force behind growing wage inequality, then that problem is just going to get worse, absent a sustained push from the government to direct Marshall Plan-scale resources into education.

A laptop in every K-12 pot, anyone?


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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