Despite all the shiny new high-tech businesses, the vast majority of new jobs in the U.S. are in workaday service industries—like health care, hospitality, retail and building services—where pay is mediocre.
Automation is splitting the American labor force into two worlds, The New York Times reports. There is a small island of highly educated professionals making good wages at corporations like Intel or Boeing, which reap hundreds of thousands of dollars in profit per employee. That island sits in the middle of a sea of less educated workers at businesses like hotels, restaurants and nursing homes that generate much smaller profits per employee and stay viable primarily by keeping wages low.
As a result, economists are reassessing their belief that technological progress lifts all boats, and, instead, are beginning to worry about the new configuration of work.
Recent research has concluded that robots are reducing the demand for workers and weighing down wages, which have been rising more slowly than the productivity of workers. Some economists have concluded that the use of robots explains the decline in the share of national income going into workers’ paychecks over the last three decades. Read the full story.