Does Tech Own the Inequality Problem?

"Opportunity is who we are. 

And the defining project of our generation is to restore that promise."

– President Obama, 2014 State of the Union

In a past blog post last summer, I fretted that the latest wave of innovation – as amazing as it is – was not showing up in US worker productivity.  At the time of my writing, the US Bureau of Labor Statistics had provided some pretty depressing data, with very modest productivity gains in 2011, 2012 and Q1 2013.

Fortunately, in the last year, the productivity numbers have shown a major uptick.  It appears that our society and our businesses are getting more adept at absorbing all the new technology of the Internet Revolution.  Unfortunately, the beneficiaries of the greater productivity – presumably driven by the boom in cloud computing, precision manufacturing, wireless broadband and other major infrastructure improvements – are America's elite.

A recent analysis by one of my favorite economic pundits, John Mauldin (who tends to be pretty conservative in his political views), provides some good data that drives this conclusion home.  The chart below shows that full-time, full-year wages for male workers (presumably the female statistics would be clouded by a narrowing of the gender wage gap over this period) have grown strongly for the more educated workers over the last few decades and dropped dramatically for the less educated workers.

Further, if you take a close look at the jobs that are likely to be further impacted by our massive, secular shift towards automation, they are the very jobs that middle and lower educated workers hold.  The chart below characterizes how disruptive technology will be to certain job categories.

Politicians are spending a lot of time talking about the inequality problem in America.  If you consider how much automation and software disruption that is ahead of us, it is clear that the problem is about to get much, much worse.

What role will the technology industry play in dealing with the societal implications?  I hope a large and positive one.  The industry can not allow itself to be represented by the Tom Perkins of the world.  Leaders in the technology industry need to step up and own the inequality problem.  

That's not to say technology leaders should be slowing down our march towards disruption.  As economist Joseph Schumpter pointed out, creative destruction is a powerful, positive force.  But tech leaders need to work hard to improve the underpinnings of our education system (see Khan Academy), broken immigration system (see FWD.us) and other aspects of our society such that creative destruction does not equate to opportunity destruction.  I love it when I read about tech leaders getting more engaged in policy and civic activities.  Let's see more of it.

4 thoughts on “Does Tech Own the Inequality Problem?

  1. It is a scary future for those who do not have the skills to survive and thrive in the information age. I agree with you, Ted, about the need to rethink our obsolete educational model.

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  2. Dintersmith: The first chart Mr. Bussgang reproduced above can be found in chapter 9 of “The Second Magine Age,” the book you are referring to.

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  3. The best work on the impact of innovation on the labor force is being done by Andy McAfee and Eric Brynjolffson at MIT. They have a new book out, which is great. Without a doubt, innovation is systematically eliminating the routine, structured jobs in the economy. The skills our kids need to have coming out of school are totally different from what was required 50 years ago. Sadly, the much overrated Khan Academy doesn’t do much more than bring efficiencies to an obsolete education model.

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