It's Professionals vs Everyone Else in the K-Shaped Recovery
K-Shaped Recovery Bites the Unskilled
Cashiers, retail clerks, servers, and hotel maids and others in the service sector already had jobs that were slated for robots.
Covid accelerated the pace.
There are now two Americas as Covid Divides Workers into groups.
Even before the pandemic, “Automation can explain labor share decline, stagnant median wages and declining real wages at the bottom,” says Daron Acemoglu, a professor of economics at the Massachusetts Institute of Technology. “It’s the bottom that’s really getting hammered.”
Another factor that could increase economic inequality is that, as in all recessions, many small businesses will be wiped out. According to Yelp, 73,000 businesses in the U.S. listed on its website have already closed permanently since March, including bars, restaurants, gyms, salons and shops.
“I believe our field has a mind-set that will lead to a large humans-to-robots replacement for certain types of work,” says Odest Chadwicke Jenkins, a roboticist and professor of computer science and engineering at University of Michigan. “My worry is that robotic technology will be used to simply reduce costs by automating highly populated jobs—for example, vehicle driver, manufacturing, logistics,” he adds.
Blame the Robots? Covid?
It's easy to blame robots, or Covid, or progress in general.
I have yet seen one mainstream article blame the Fed's cheap interest rates, the push for $15 wages, labor unions, or the cost of tuition.
Every one of those accelerated inevitable trends.
The bankruptcy reform act of 2005 which made student debt not dischargeable in bankruptcies compounded the woes of those with worthless degrees and no skills.
Spotlight on the Fed
In addition to artificially cheap interest rates which lowered the cost of capital, the Fed actively promotes 2% inflation, without having any idea how to measure it.
The Fed has blown serial bubbles of increasing amplitude over time, leaving the have nots deeper and deeper in huge unrecoverable holes.
Then, when the jobs vanish in the inevitable bust, the academics blame robots,
Yes, Covid accelerated the push to robots, but so did the Fed and so did Progressives pushing for $15 an hour for people with zero skills.
The Recovery Will Have Many Shapes, Not One
On July 1, I noted The Recovery Will Have Many Shapes, Not One.
We can add a new shape to the list: K.