Advertisers crack jokes about the end times and turnip lattes as inflation bites into the wallets of many consumers. But in the US, unemployment is rising, and not just among the young and the old, but for all workers, whether the jobs pay as much as $17 an hour or $9.50 an hour—and, as we have seen in recent months, many of those jobs don’t pay enough to live on.
Unemployment in the United States is on the rise. So is consumer inflation. So is the cost of living. And the question, not so far from the minds of many Americans, is why is this happening?
A big part of it is likely to be technological. Since the late 1980s, we have added more than 1.5 million jobs every year, to add to our current total of 11.9 million working-age Americans, most of them not in professional or managerial jobs, and many not in high-paying ones either. There are many reasons this has happened, but in many ways it is the result of the expansion in the scale of our economy and the changes wrought by it.
In fact, in the 1980s, some economists worried that the end was near, as we became poorer, and there was no obvious way out. But a number of developments since then, beginning in the late 1990s, have greatly improved the prospects for workers in this country.
First, automation. Companies used to have to use people to pick the products they made, but now, thanks to technology—in cars, computers, robots, and many other products—they use equipment that is not much different from that which people use themselves. There are fewer workers, but the jobs pay more, and the number of workers employed is increasing.
Second, globalization. Companies previously had to produce their goods in factories that made the products for which they competed globally—the products of some other country. Today, they compete with goods made in the US by other companies, by other countries. Global competition has led to lower costs, and often lower prices,