Don’t Blame Robots for Low Wages

Progressives shouldn’t fall for facile technology fatalism.

Comments: 242

  1. Come on Paul — US unions simply cannot have the leverage they did when the US was the center of the world’s economic universe. We need something new.

  2. @Terrance Malley; You've hit the nail on the head--the U.S. is no longer the center of the world's economic universe, we no long set the terms of trade, China does.

  3. @Terrance Malley The US was the center of the world's economic universe only to the extent that it was the worlds economic universe, or at least half of it. Trade has simply never been a huge portion of our economy. And it is still not. But a certain portion of it has been displaced by trade, and that portion did employ many people.

  4. @Terrance Malley Corporations are raking in obscene amounts of money – so much that they can't think of anything to do with the extra but buy back their stock. Seems like there's room in the budget for higher wages – which of course would lead to more spending and more demand.

  5. Good column. I would only point out that the fault is not with our political leaders; it's with Republican politicians.

  6. @jas2200 Please come to terms with how many democratic politicians are owned by the same corporate and wealthy donors. The entire system is corrupt.

  7. @jas2200 It is true that Republicans have fiercely fought unions and bear much of the responsibility for their demise. However, Democrats have not used much political capital defending them much less encouraging them. I believe some of the alienation of workers without college degrees is due to the correct sense that Democrats have not paid much attention to their plight. The Democratic party should be the natural home for those workers but it has allowed Republicans to control the narrative by exploiting their resentment and encouraging their distrust of others vying for the same jobs. The Democratic party should have been actively engaged in revitalizing unions and pointing the finger at the real culprits, CEO's who have grown fat by not sharing the increase productivity with their lower level employees.

  8. @jas2200 You are right the Republicans are the problem but the Democrats no longer correct matters when in power but it was not always so. The purchasing power of the worker used to rise at the same percentage rate as the rich. Regan in USA and Thatcher in Britain set the greed tone The rich got richer and the workers poorer. If the Democrats had behaved when in power as they did before Regan things would be much better.

  9. Krugman is usually right about everything he writes. He is my main source of economic and even political information. Of course, he is absolutely right about the fact that the Trump/Republican economic policies are largely beneficial to the super-rich and the big corporations, and are not beneficial to the middle-class, blue-collar workers or the poor. Trump's policies are unsustainable, except in the short run.

  10. @Anthony J. DiStefano The republicans are mostly responsible and it amazes me how many working stiffs consider it a badge of honor to vote republican.

  11. @Anthony J. DiStefano Ah, yes, the short term. Like that French king said: "After me...the deluge.". A flippant attitude regarding the future is going to cook us all, rich and poor.

  12. @Anthony J. DiStefano Ok so he's right. It would be nice to see some actionable steps in the final few paragraphs.

  13. Isn't automation part of the reason why workers have lost bargaining power? Hasn't it led to the de-skilling of the labor force? Hasn't it resulted in the displacement of workers in sectors of the economy that were once the most organized and able to bargain? I agree that the problem is ultimately political. But why should we believe that labor-saving technology is somehow apolitical?

  14. @donald.richards Good question. I believe the answer is yes and no. Yes because those things all would lead to de-skilling. But no because they have not happened so much in other industrialized countries (like Germany and Japan, where I believe industrial wages are much higher)

  15. The backbone of the American labor force between the end of World War II (1945); its salad days (1950-1970); and its decline and nadir (1975-1990) was the white working class—the knights of the blue collar, if you will. Few unions employed black people; son followed brother, father, uncle and grandfather throughout nearly three generations of well-paying jobs. Who needed a white collar job when the UAW or the steel mills or the textile mills or, yes, the coal miners, paid handsome wages due mainly to the power of collective bargaining (a damnable “socialist,” ungrateful, un-American idea that found purchase in the 1930’s after the spilling of so much blood)? Then the Republicans, de facto modern-day planters, riled up the “base” with ancillary culture war distractions, e.g., “they’ll (“the dreaded other”) take your jobs. This racial wedge became the daylight to other Republican grievances; craftily, the GOP wooed the blue collar workers into their columns on Election Day. These frightened people gravitated towards those who thirsted for the demise of their economic well-being. As technology incrementally replaced the human component in the workplace and in the workforce, the Republicans sang the siren songs of racial and social changes that threatened all they had worked for. And Ronald Reagan delivered perhaps the fatal blow in 1981-82 when he fired the federal Air Traffic controllers. The Right rejoiced in their triumph over labor. They’re still winning.

  16. @Red Sox, ‘04, ‘07, ‘13, ‘18 Coincidentally, The Intercept just put out a good piece on union factory jobs in Milwaukee. And didn't meat packing used to be good union jobs that employed a large proportion of black workers? "A factory job had meant union labor, including high wages and benefits that disproportionately benefited the city’s black, male population. In 1970, 73 percent of working-age black men in Milwaukee were employed, and half of them worked in manufacturing. By 2010, only 45 percent of working-age black men had a job." https://theintercept.com/2019/03/10/hillary-clinton-bloody-sunday-speech-selma/

  17. @Red Sox, ‘04, ‘07, ‘13, ‘18 Thank you. I have been the absolute need of unions to the next generation for years. To no avail. They figure they can get what they need on their own. What can I say.....

  18. @Red Sox, ‘04, ‘07, ‘13, ‘18 And in the process the right is wrong and hurting all of us. South Africa might have ended apartheid but we are continuing it here.

  19. "What made America exceptional was a political environment deeply hostile to labor organizing and friendly toward union-busting employers." America has long been hostile to labor. Whether it's a blue collar job, a white collar job, a profession or job usually held by women or immigrants makes little difference. There's open hostility to the idea that lower level employees should be paid a living wage, receive vacation and sick time, be paid overtime, and have a safe place to work. Employers didn't respect employees before unions. They feared the unions and didn't want to work with them. It was preferable to spread lies about unions and the benefits of belonging to one instead of accepting them as part of the workplace. Unions could have contributed to employers but employers decided to maintain the hostile stance. However, the worst part of working in America is how often workers rights are completely ignored whether there is a union or not. When I hear about Walmart or McDonalds or any other employer deliberately underpaying employees and telling them how to apply for food stamps I don't wonder who is abusing the government. It's clear. If politicians prefer to believe that people want to be poor they are overlooking who and what is making them poor. We have age discrimination, racial discrimination, gender discrimination, but we don't seem to discriminate between involuntary poverty and the level of greed existing in some corporations. Sad.

  20. @hen3ry And corporations don't discriminate in terms of which politicians get their campaign contributions and whose doors get knocked on by schmoozing lobbyists - it's both parties. Both parties, in the main, are "bought", thus few represent the interests of the rest of us.

  21. @Ellen "...it's both parties. Both parties,..." I agree money has been the root of all evil in both parties. However the 2 major reasons Krugman mentions for wage stagnation in America, not increasing the federal minimum wage and busting unions, have been championed by the Republican party. That's why he's instructing progressives not to be diverted by the false pretense that technology is causing the problem.

  22. @hen3ry It all started with Regan firing the Air Traffic Controllers that were on strike and demonizing the unions. Then came the big contributions by Republican governors and their Congress that have passed Right to Work laws. This occurred in big Union States of Michigan, Indiana, and Wisconsin around 2012. Some even included municipal workers along with private workers. There are now 24 States with Right to Work laws. The recent Supreme Court Ruling that you can work in a Union shop, be given all the benefits but not have to pay Union Dues. Also did a lot of damage to Union Membership. Combining these laws is what has destroyed the Unions. My Union reached out to me to see if on my retirement, I would pay Union Dues. Knowing that my pension and my medical insurance were bargained for by the union I fully support them with my dues. Unions typically voted Democratic and supported $$ Democratic candidates. That is the main reason the Republicans went after them.

  23. Democrats and liberals believe the right is blind to anthropogenic climate change. But those two groups have a similar affliction - they cannot see that immigration and the elimination of trade barriers have driven wages down. I own a small contracting company. My burden costs - health insurance, social security, unemployment insurance, worker's comp insurance etc... add up to more than the average wage in China. How is an American manufacturer going to compete with that? There is a segment of our population that is best suited for blue collar jobs. They have been devastated by immigration, mostly illegal. How is an eighteen year old kid just out of high school going to compete with a thirty year-old foreign national here illegally? That foreign national has been working since he was ten. The 18 year old citizen still has to learn basic job skills like punctuality, diligence, and then the actual hand skills required for the work. The foreign national is thrilled to work for $7. The young citizen has to live at home for a decade. There are 21,000,000 foreign nationals residing here illegally. That has an effect on wages. Denial afflicts the left too.

  24. @AmarilloMike Any business model that relies on paying poverty wages to make a profit is a failed business model.

  25. @Michael W. Espy Which is also a solid chunk of of service jobs as well. Food service, home care, childcare, etc. I'd agree with you that these are failed business models. But do you know any politicians offhand who have to will to do anything about it?

  26. @Michael W. Espy He is saying that foreign competition and illegal immigration are reasons for "poverty wages". Yet some chunk of the native born population, who expect more and are surrounded by plenty, will out of necessity also need those same jobs but for a hire wage. And if they don't get them, who knows, maybe they'll elect some flamboyant right wing demagogue. Maybe some day.

  27. To me, the major factor in lack of wage growth is that we are returning to a "normal" steady-state. The exception was the phenomenal wage growth following WWII. Most other developed countries were flattened, so the US was the manufacturing plant of the entire world. Now the rest of the world has their own manufacturing and labor so those formerly highly paid US manufacturing workers are now competing with cheap foreign labor. Countries such as China are finally utilizing their vast labor force in a 21st century way. This is also one reason why unions aren't as powerful - go on strike and the factory moves to Vietnam. The other foreign competition is of a different sort - the workers that come here. There are currently approximately 420,000 H1B visa holders in the US. This doesn't count the hundreds of thousands more that have converted to green cards and citizens. It professionals in particular make a lot less money than they would were it not for this direct competition for jobs. These workers do contribute to the economy in many ways, both as consumers and producers, but the stark fact is they do drive down wages. So a combination of the industrialization of the rest of the world and the importation of labor is what is suppressing wage growth. MAGA is a failed ideology - there is no way to wind the clock back to the 1950's.

  28. @optimist This is not the way trade works. If other developed countries were flattened, how could they have afforded to purchase things from the "manufacturing plant of the world"? What little they could have afforded would be thanks to the Marshall Plan. That is, money that would otherwise have been spent here. As other countries industrialize, they have more to spend. It is not a zero sum game. And is MAGA ideology really failed? Wouldn't tariffs protect American workers from moving factories to Asia by making it less economical? And wouldn't reducing H1B visas protect professionals? I am really confused.

  29. @DM No, tariffs wouldn't stop or slow moving factories as long as the tax law subsidizes that, as it does. Reducing fraudulent H1-B visas should help, but the big companies like Disney won't stand for it. As for the zero-sum game, you are correct!

  30. @optimist If all 420,000 H1B visa holders had to be paid the same wages and benefits as Americans in the same jobs, there would be very few H1B visa holders.

  31. Would it be constitutional to federally prevent state legislatures from embracing Right to Work and thus displacing unions?

  32. @JFM The federal government has it powers enumerated in the Constitution. All others are granted to the states. Pretty sure limiting states’ power over unions isn’t mentioned.

  33. "Predictions are hard, especially about the future" Are there any other kind?

  34. @John I believe “Predictions are hard, especially about the future” can be attributed to Yogi Berra.

  35. @JamesEric and here I was thining it was Yogi Bear

  36. @John.... it’s meant to be a humorous non sequitur. British humor ?

  37. I would add some factors: 1] Globalization. The easier it becomes for companies in wealthy countries to outsource work to poorer countries the more that differences in wages between the wealthy countries and the poorer will shrink raising wages in poorer parts of the world and lowering wages in richer parts of the world. 2] The changing nature of 'work'. More and more work is 'knowledge' work software, design, systems and such. These workers generally own stakes in their companies and have no union -- are actually highly exploited in a similar way that athletes were exploited before 'free agency'. 3] Productivity is rising faster than you think. It's just not being measured properly

  38. 150% increase in worker productivity must mean workers + machines. Actual human productivity must remain about steady, the increase is due to machines. On this showing workers do not deserve pay increases, the machines do, and as these get increasingly competitive and capable workers deserve lower pay, which is what we're seeing. Do machines receive 'pay'? No, their owners scoop up any gains from their increased output, which is also what we're seeing. What did unions do? They raised workers' wages too high making it profitable for employers to purchase slave labor (machines). Large corporations today are the modern equivalent of Roman latifundia which by 'mechanizing' farming on a big scale forced down costs, prices, and wages and drove out small holders. These than moved into the cities to be supported by government handouts. The more things change . . .

  39. @Ronald B. Duke Krugman points out that technological productivity gains have been going on for many decades, and that workers benefitted from those gains up until about 40 years ago when the power of labor unions began to decline. Workers "deserved" whatever pay increases management agreed to back then, and will deserve them again if and when their power gets back to a more even level with that of owners and management. Unless, I suppose, management finds that it can do entirely without labor.

  40. @Bill Mosby The worker share of the pie is subject to market force. 40 years ago, capital and technology was locked inside the US, as the world was recovering from the world war. Today, the US worker has to compete with the world's worker. Thus its bargain position is much weaker, and got a much smaller share. The government or union can put the thumb on the scale, but that will just mean more capital flight.

  41. @Ronald B. Duke Show me a company that can run with no people then you might have a leg to stand on, maybe, But even then, probably because that company hides, leans on, exploits unrenumerated human input. Even in your industrial farm example, the cost to the soil, water, markets, and displaced smaller farmers outweighs the profits claimed by the large outfit. Rome may have been built over centuries but it fell surprisingly quickly. History shows in uncompromising reality that today's self proclaimed emperors can be toppled by we rabble razing Goths. You know, the little guys then and now who have been pushed to having to set things straight.

  42. According to recent numbers at least 51% of people in Congress are millionaires. Around 7.4% of American households have a net worth at or above $1 million, a figure which includes the value of their homes. Approximately 1 Congressperson in 13 is very comfortably in the uppermost percentile, with at least $10.4 million or more in assets. Of these folks, 26 are Republican and 17 are Democrats. The total wealth of the current Congress is up 20% over the previous Congress, with at least $2.43 billion in total assets. Source https://www.rollcall.com/news/hawkings/congress-richer-ever-mostly-top Many of these people are self-made and earned what they have. Nothing wrong with that. But these and other numbers illustrate how disconnected they are from the everyday concerns of the vast majority of us.

  43. @Basil Kostopoulos “But these and other numbers illustrate how disconnected they are from the everyday concerns of the vast majority of us.” I think that’ a false narrative. It matters much more whether they WANT to learn about the problems their constituents face. I know people who make $60,000 a year who bemoan their lot in life and think they are the biggest victims in American society. Since they are totally incurious and arrogant they assume the genuinely destitute are living large on foodstamps and “Obamaphones.” Or white middle class who get in a huff anytime it is suggested that their lot in life would be worse if they were people of color. We don’t need that kind of “salt of the earth” in Congress.

  44. @Basil Kostopoulos: today, you cannot even run for LOCAL offices unless you have big bucks. About 7 years ago....a guy ran for our local City Council. He was affluent and he spent $35,000 (!!!!) of what I presume was his own money to run for a City Council seat in a suburb with 44,000 residents that pays roughly $9000 a year. Why do that? because it is a HUGE HUGE stepping stone to a career in city or county government and then a swift trip to STATE government. That was his plan and he succeeded -- within 5 years, he was in a very cushy state government job. I am still here, but I do not have $35,000 to run for City Council.

  45. MMT posits that the solution is a government guaranteed job that sets the minimum wage. In other words, the government can offer to pay $15/hour to anyone who wants work. If their current job doesn't pay that well, they leave and take the government job instead. The idea is not to compete with the private sector for workers, but to establish a living wage below which workers would have no reason to accept from a private employer. Such a plan would achieve true "full employment," and the added productive capacity would most likely keep inflation at bay.

  46. Paul hits it exactly in this piece. I have lived in the space since the mid-1980s. I’ve seen robots and automation save humans from countless physically debilitating and dangerous tasks. I now am a leading blogger in the industrial technology space. I see a lot and talk to many. I also have seen the results of the anti-union politics beginning under Reagan in the 80s. Low wages is as much political as it is due to technology. Low-skilled and semi-skilled workers no longer have enough clout to raise wages much above minimum. This is simply an observation and analysis based on it. I understand limits of unions. But I understand benefits. But it is definitely not technology. Talk to the people developing industrial technology. It is all about making humans better.

  47. This column deals with two separate issues, but Krugman discusses only one in any depth. He claims that technology cannot explain the stagnation of wages, attributing that problem instead to the decline of union membership and power. With the exception of the 1930s, unions have never enjoyed much popularity in this country. It took the Great Depression to convince many Americans that workers needed the protection of collective bargaining to achieve economic security in the face of corporate power. The greater economic stability of the postwar period, however, combined with organized crime's influence in some unions, weakened popular support for unions. What Krugman's thesis does not explain is the decline of employment in industry. He mentions this trend at the beginning of his piece, but he never addresses the causes. Surely automation has played a major role in decreasing employment in major manufacturing industries. Even strong unions would have been unable to prevent corporations from upgrading their technology. Politics doesn't explain everything.

  48. We all have to realize that markets are not a natural phenomena. Markets exist where government protects and cultivates them. The US government creates and fosters technology and its implementations - land colleges, railroads, aviation, semiconductors and computer science, biological research, the federal highway system - that led to a productive American economy. Markets flourished in this ecology and taxes paid for the next generation of this success. The idea that taxes are theft led to lowering tax rates on the people who got the best outcomes to the point that the future success of the American economy. Why should Mark Zuckerberg, for example, pay high taxes? Because almost of his success is based on the work of other people. Succinctly, the internet would not exist without funding provided by the American government. Higher taxes on Zuckerberg pay for the next round of success. As Paul says, what everyone 'knows' implies we cannot get back to a more egalitarian world. We can - it's a political choice.

  49. As you point out, Union membership has declined drastically down to single percentage points of the work force. Then you go on to summarize saying it's "Political". Indeed, but what precipitated the decline of unions? Organized crime! Let's consider the social environment that led to the politics of union busting. For what may have been a hundred years, the Mafia infiltrated unions to shake down the members, and for purposes I have come to believe as the deliberate destruction of unions on behalf of corporations who had a vested interest in busting up the unions to keep costs low and the workers under control. Then along came the incessant Cop shows on every channel that changed minds about law and order. From then on, everyone viewed each other with suspicion, staying indoors watching more cop shows. It was an insidious fact of life in America, and proven by the extraordinary mass incarceration we now debate. Organized Crime precipitated the loss of unions. Everything after that was political, capitalized on later by our political leaders whose ears the corporations have. The Republicans support the union busting corporations and should know, criminals overshadowed the virtues of the dedicated employees who only want to live just a little better than paycheck to paycheck, just like the executives. I think executives and workers need to make peace and the prosperity of the whole a common endeavor. Rid the remaining unions of organized crime.

  50. @PATRICK Forgive a tongue thrust partway into a cheek, but even if organized crime wholly controlled all unions fifty years ago (and I'd submit it did not) workers fared much better under that regime than than they do now. So logic would suggest workers would benefit should O. C. return to their former positions of power. They would certainly do much better with crime bosses who actually shared the wealth than they currently do under the current administration, which is patently criminal and far more disorganized.

  51. @PATRICK So are you saying that every existing union is rife with organized crime? And by getting rid of that supposed crime the executives and workers can "make peace and the prosperity of the whole a common endeavor"? Have you ever heard of the Koch Brothers?

  52. @Ken Winkes Reading your reply, knowing it's a joke, is still troubling. You don't know New York as well as I. I don't laugh at the criminals. I really do believe the union busters inspired organized crime to be Trojan Horses destroying unions from the inside with unrealistic confrontational activities that angered corporate leaders. Honest civilized union leaders would have compromised and civilly talked to corporate leaders instead of rabble rousing by criminals.

  53. With globalization, companies feel no responsibility to employees in the US. Increasing wages in the US only motivate them to move jobs to lower cost countries whenever possible.

  54. It’s difficult to be pro-union when so many overplay their hand and often make unreasonable demands. The NYC government and MTA unions are a great example of that - overpaid and greedy. The entire city suffers when forced to pay more for less services so that this group take advantage of their position.

  55. Yes, but... Conservatives show how if you demand something completely unreasonable you frequently shift the debate to a point closer to what you want. Meanwhile, we see company management getting paid many, many thousands of times more than they used to be, and it is argued, quite irrationally, that they are worth it. I prefer a train driver getting $100k than a sociopathic CEO getting a $gazquillion.

  56. Thank you for a healthy dose of reality, Paul Krugman. The "invisible hand" of Adam Smith's free market has always been there exerting a crushing blow, using our own selfishness and greed against us. We should strive not to send another job offshore or farm another job out to automation until we assure ourselves that the human worker who will be replaced can be retrained for a new job with comparable wages and benefits. We need to embrace capitalism with appropriate regulation, tied to a robust social safety net. Capitalism caters to the competitive nature of the human spirit, but we always need to remember to take care of one another. If we cannot learn this vital lesson, then we will never be any better than these inanimate machines. And if that is truly the case then they will, albeit slowly, come for us. And at the end, they will take no prisoners.

  57. Dr Krugman is spot on in blaming the political and Corporate rigging of the system against the workers. However, technology impact has not been a minor contributor. In fact, it has been a cudgel in suppressing the hourly wage growth and, increasingly, salaried wage growth. When I first started in the 80's, PC's were introduced and the first casualties were the steno pool. Over the years, technological advances enabled worker displacement. Management used that leverage to draw concessions. The fact is Technology has been and continues to be a key cudgel. Unfortunately, many of our workers are not adaptable and fall to lower paying alternatives. The system is rigged against the worker... and Management and Government really don't care. Maximize shareholder value!!

  58. @Steve Burton Its natural process that some of the jobs get displaced by technology, and there is nothing new about it: think of buggy drivers and lift operators. They key point you make is "many of our workers are not adaptable". I have to disagree. Technology makes operations easier to perform, not harder. They problem is, nobody is ready to invest in workforce retraining for new jobs. It is done much better in other parts of the world.

  59. I usually agree with you, but you can look at every major industry and see the jobs eliminated by automation. where automation takes people out of harm's way, ala coal, it seems good to me. Safe and healthy is better. First it was just going to be service sector jobs. maybe lower pay but reliable. But even the "safe but low paying " jobs of retail are being replaced by terminals. And the employers are forcing bogus shift arrangements, that otherwise might able a real gig economy, by changing needs to on demand and by refusing enough hours to entitle benefits or a living wage. You want to look globally at where the source materials for terrorists come from? look to the rate of unemployment and for educated and uneducated men and women. Humans get a huge sense of their value by doing work that is valued by those they care about and respect. You steal the dignity of humans when you no longer honor that. We need to look people in the eyes again and listen. What they say needs to matter or it will not go well. that is universal regardless of race, religion, gender or geography!

  60. @Kent Dear Kent if you have 10 people who produce 100,000 dollars of product a month, that is 10K/person That 10k/person is what we call "productivity", and economists measure it carefully If you replace 9 of those people with robots, then the one remaining person is producing 100K/month, so, by *definition* her productivity has increased 10x !! As Paul points out, some industries have seen very very painful automation taking away jobs yet in the overall statistical data, we don't see that can you explain this ?

  61. @Kent We need to look at the economy where Americans businesses are using tens of millions of illegal aliens instead of Americans. There is no demand for Americans when there are so much supply for illegal aliens that will work at very low wages.

  62. Krugman’s the economist, not me. So, if he says that AI and robotics are not taking jobs, I take his word for it. And it makes sense that robotics have not yet disrupted the necessity of human labor; we are still in the early innings of AI, automation, and autonomous vehicles. However, I’ll bet that if we check back in 20 years- and 20 years passes fast- Krugman’s perspective will be far different than it is today.

  63. Paul, could it be that the case of technology in the digital/information economy is different? Never has the creation of so much wealth required so few workers. The marginal cost of creating a new unit of Facebook is $0, so all/most of the gains go to the owners and mangers. Effectively that creates a boom in the markets which helps the investor class and some trickles down. It is not the case that American workers have become poorer since 1970, they have become relatively less wealthy compared to investors and the digital economy. In aggregate, it looks like workers are not sharing in the productivity gains, but are those gains focused on a subset of workers in the digital economy? Absent a direct transfer from the winners to the losers, what other policy is going to undo the problem that their is no cost and few workers required to create digital wealth?

  64. I have nothing but respect for truck drivers and other skilled laborers. Who wouldn't? But I remember back in the early 70s my college professor dad came home and described how a student asked him, in class, why any of this was relevant because he could right now go and get one of the plentiful logging jobs then available, and make 4 times what my father made. That figure was roughly $10K to $40K. I'd argue that some saw the light and some didn't.

  65. One of the hardest things in life is to accept when statistics disagrees with your own personal experience In many cases (as Paul points out, longshoremen) automation has killed jobs But if you look at the overall economy, over all, it isn't happening so I would say to thoughtful commentators like Bruce Rozenblit in Kansas City, and Kent in Ann Arbor - how do you know that your personal experience is what the overall economy is doing ? As Paul puts it, if robots are taking jobs, then *by definition* the amount each worker produces (the value of product) has to go up: if you replace 6 people with 1person+robots, in the data, that one person is producing more and this is something that we actually measure, this amount per person is called "productivity" so again, I would ask, if in your own personal experience, robots are replacing jobs, why don't we see that in the statistics ?

  66. @ezra abrams My experience is that we need to look at the economy where Americans businesses are using tens of millions of illegal aliens instead of Americans. There is no demand for Americans when there are so much supply for illegal aliens that will work at very low wages. Our economy was good when Americans would work for dirty jobs since the dirty jobs paid good wages. The stagnant wages for 18 years is not because of robots.

  67. I think we are all prompted to reconsider the role of robots in society and business following Sunday's plane crash. For years, I have quipped about how robots or computers will never rule the world, the latest iteration of robotics and computers being artificial intelligence. There is no way even the new quantum computing will surpass the power of many people. There will always be many things, maybe even most things, that we humans will always do better. But the corporate/worker battles will always continue, hopefully recognizing ultimately that teamwork is far superior to conflict within the company. Computers and robots will never rule the world. People are always revolting when threatened, and that would be a threat. Robots and computers always need a human program. If they become autonomous, well, just look at the reactions to the Autocrat Trump, just as an example. The public would shut them down.

  68. @PATRICK We need to look at the economy where Americans businesses are using tens of millions of illegal aliens instead of Americans. There is no demand for Americans when there are so much supply for illegal aliens that will work at very low wages. The countries in Europe do not have this problem since any business that uses illegal aliens will go to jail. Countries in Europe will take in legal immigrants since the legal immigrants will not create problem of businesses exploiting legal immigrants. This is very different in the United States where the businesses of the president Trump will exploit using illegal aliens. What is needed is a law like the laws of Europe that do not allow American businesses to exploit illegal aliens.

  69. Sooner or later unemployment rate will go up to a point where it will cause social issues. Government will have to deal with it, I know it is unthinkable in US but some sort of minimum pay for the unemployed will be necessary to ensure that there is no mass poverty level. This will mean higher taxes on the wealthy, this current tax breaks for the rich is unsustainable.

  70. @Mir the unemployment rate IS causing social issues. The real unemployment rate is far higher than what we're told. Look around you during the day and ask yourself how many of those people you see shopping during the day would rather be working but can't find jobs because of their age? If you go to the gym ask some of the people over 50 how they are doing in this economy, particularly if they are in IT. I'm 60. I'm in IT. I hear that there are jobs that go begging. But no employer wants to pay for experience, wants to invest in employees, or cares about the quality of the work. If an employer is asking for highly skilled people that employer ought to offer more than entry level wages. Entry level jobs should not require 2-3 years experience. The poor decisions of the 1980s onward are having their results now. People born in the mid to late 1950s weren't able to save enough to retire, have lived through several bouts of unemployment and raided their nest eggs, will wind up destitute because government programs were cut and businesses allowed to be greedy rather than greedy and look out for their employees. Vulture capitalism is not a virtue but don't tell that to the C-level people who made their fortunes not paying the rest of us decent salaries or offering us good benefits and firing us once we were in our 50s.

  71. @hen3ry "But no employer wants to pay for experience, wants to invest in employees, or cares about the quality of the work." What they don't want to pay is the healthcare costs of people our age.

  72. @hen3ry What a stunningly on point comment. When entry level jobs require work that took several years of experience are termed "entry level, no benefits, that's not entry level. It's mid-level and must be compensated accordingly. To not do so pushes the pipeline back making the young up and coming to choose to not be educated, not be groomed. Why would they? It's a lose, lose, lose proposition.

  73. Another very interesting column by Mr. Krugman that combines components of some of what we knew piecemeal with actual research, his strong history, which is then combined to create a logical narrative of what is really going on.

  74. The wage gap has no one answer solution. The breakup of unions should have been a common sense realization of on-coming disaster for middle class Americans. OPEC was also another red flag which few middle class people recognized. The South Baptists absorbing so many other baptists and then so many evangelists has broken the contract of separation of church and state as guaranteed within the Constitution of the USA. Shipping jobs out of the USA as well as replacement via robotics has diminished jobs. Drugs have had their affects. The constant degradation of public school. The entertainment industry that allowed sensationalists such as Rush Limbaugh did a pretty good job of creating fear in young men who were just on the edge of collecting their guaranteed entitlements. But no less than televangelist who opposed the Civil Rights Amendment. The problem could be summed up as evil doing it danged good job. To fix what has been stripped down, beaten and left for dead is going to take another administration like Roosevelt's and more Americans of every value of skin to come together and build back what the baby boomers threw aside.

  75. @Susannah Allanic Amen.

  76. As the old quip goes, the manufacturing plant of the future will have only two employees: a dog to keep all people out and a man to feed the dog. We must ask "what is the economic role of people?" If they are not needed for production or distribution but only for consumption, it follows that there must be some guaranteed source of income so that they can consume.

  77. Another major factor for wage stagnation of workers is that capital can be invested anywhere in the world, while the workers are moored to their nations. Those with capital can easily strip the factory from one country and move it elsewhere. Around 1980, the majority of consumer goods were made in this country providing adequate employment. Since the time of President Reagan the so called free market economy, shareholder returns, and suppressed the unions have increased, and subsequent hollowing of our industrial might. The titans of the US industry freely shared their technical know-how with the state supported enterprises in China. Over the past 35+ years, the US has lost its edge in consumer goods. Now no longer are TVs, mobile phones and computers made in the US. China started as low tech producer in the 1980. Now China has gained the upper hand in manufacturing of sophisticated high technology goods to designing 5G equipment. The current account deficit due to the lop-sided trade with China is a corollary to job loss in the US. The US workers face headwinds. Off-shoring (Mexico as a classic example in the auto sector) and ideology (ALEC) driven right to work legislation have wreaked havoc for the organized labor. Capital has been winning at the cost of labor. Fair trade, rebuilding the indigenous supply chains and reversing right to work legislation will help bring back the balance between capital and labor.

  78. @Zor And who do you think funded all that? Who do you think provided the seed money?

  79. Dr. Krugman, you are half right. It has been political; the other half of is that,simply, it is greed. The political faction has been caused by, essentially, "the South will rise again." From cheap land,cheap labor, and cheap politics, in the form of no regulations, low taxes, lower responsibility to the workers. In fact, the so-called immigration crisis started in southern and southwestern states who, low and behold, held extremely business friendly policies. They were hostile to union organizing, and their laws were basically written in favor of business. The south essentially created a new Jim Crow system of doing commerce. The other factor was just plain profiteering and bring cheap. Post WWII , factories were older, Japanese and Eurpoean factories being built were more modern, and the owners didn't invest in upgrades. They just moved . They saw their profit margins would be much greater in the south. After Reagan fired the air traffic controllers, it was open season on unions; and more women were joining the labor force, in mostly administrative and clerical jobs, where there was never union representation. Many had kids and weren't about to rock the boat. Unions also contributed to their own decline: many apprentice schools don't even teach one hour of labor history. Many members take for granted that somehow, they are magically blessed; yet they will shop at Walmart. Many Americans too, are losing,or have never realized the "collateral "benefits to them.

  80. I guess the working class Reagan Democrats got what they deserved. And now their kids vote for Trump too. In their defense, however, the Democrats abandoned them when Bill Clinton was elected. But in the Democrats' defense, why protect people who vote for Republicans?

  81. @Pam Because the Reagan voters weren't the only people that Democrats abandoned?

  82. @Pam Bingo!

  83. Halleluia, Dr. K comes around. It was not long ago that K's columns refused to admit the role of C-suite decision-making in the setting of wages. The politics of it are called countervailing forces, a term coined by the SCOTUS, back when you could count on them to work for justice rather than a political ideology. Welcome to the program.

  84. It doesn't matter how good your union is if the jobs disappear. It is interesting that the Professor doesn't include AI as part of the robot economy. The fact is that technology has, and will continue, to displace more and more jobs. It started with the less skilled but it is coming for the professional class very quickly. This isn't just what "everybody knows", the Prof himself gives examples. We are going to need fewer people doing 'jobs' now and in the future. Currently the solution is the creation of the uber-servant class to provide for the wealthy all the things that their mothers use to do for them. Soon drones and self driving vehicles will replace the human servants. Then what? We need to disconnect the 'job' from the ability to have a decent life. Carers must be recognized and properly compensated. Food and health care should not be granted to only those who have one of the declining numbers of 'jobs'.

  85. @JMC You say "It is interesting that the Professor doesn't include AI as part of the robot economy." But he did - his linked graph showed total economic output per person, which automatically includes all tools used by those people, including AI. The graph shows the effect of automation (including AI), because automation makes output per person go up.

  86. I agree with Mr. Krugman. There is no question that the apotheosis of the billionaire and the denigration of all workers who fall into the middle of the middle class and lower economically are politically determined. Right-wing Republican economic and social policies have been implemented year-in/year-out since the Ronald Reagan election to president, a watershed event. These have directly led over the 40 year period to astonishing wealth and income among a veritable handful of individuals and families, while all those below the upper-middle-class have seen their economic and social status decline secularly. Billionairedom is an absurdity from any perspective, other than that of those who worship greed and find normal the abuse of many others for one's own financial benefit.

  87. "Most obviously, the federal minimum wage, adjusted for inflation, has fallen by a third over the past half century, even as worker productivity has risen 150 percent." It's no accident that you picked 1969 as your reference point, as it gives you the greatest decrease. If you used 1938 as your base, wages are up by two-thirds, adjusted for inflation: https://money.cnn.com/interactive/economy/minimum-wage-since-1938/index.html "American workers can and should be getting a much better deal than they are. And to the extent that they aren’t, the fault lies not in our robots, but in our political leaders." It may be much more than that. Here's an interesting article about the cost of living since 1938: http://www.mybudget360.com/cost-of-living-1938-to-2013-inflation-history-cost-of-goods-inflation/ "The other day I found myself, as I often do, at a conference discussing lagging wages and soaring inequality." Looking forward to your solutions on inequality that don't involve government-forced redistribution of wealth.

  88. @hm1342 So you prefer using as a baseline a year still in the midst of the greatest economic disaster in American history? The Great Depression was mitigated mostly by World War II, one of the greatest disasters in human history. I prefer a government-managed effort to mitigate today's extreme wealth imbalance over depending on a source far less predictable in its effects.

  89. @hm1342 What you should know is that government redistribution has always been the answer. See the presidency of FDR for evidence.

  90. @hm1342 How about removing the incentives built into the tax code to replace people with machines? Also we could improve laws governing collective bargaining and outsourcing of jobs. The field is biased in favor of business moving labor outside the country and the worker is getting short changed.

  91. Great article, Dr. Krugman. Thank you! As someone who's been working in the computer/software sector for 23 years, my concern with robots is not about now. It starts about 5-10 years from now, when automated vehicles (ride sharing services, 18-wheeler trucks, taxis, buses, etc.) end 12 million jobs in America. My job literally involves developing the software and high-res road maps for those vehicles, so I know what I'm talking about. The big jobs danger us nerds see on the horizon is sentient androids. Don't laugh: One of my good friends is on the short list of the world's foremost AI experts, and he confidently predicts sentience in robots in 35 years or less. A truly sentient robot could probably do any and all jobs as well or better than any human, while working without pay or complaints 24/7/365. That's when Universal Basic Income starts making sense!

  92. @Thomas Hardy except that AI experts have been predicting sentient robots "real soon now" since the 1970s. I'm hoping for sentient voters, but not expecting that anytime soon.

  93. @Thomas Hardy They should arrive much sooner than 35 years. More like 20-25 for AGI. But the real Big Bang will happen well before that. That will be Ai applied to a managed economy. China's command economy has been designed/engineered to "take" an Ai. It's their secret competitive advantage. They own the future. Ai applied to a command economy is the future - but we won't be in that future; our system won't allow it. With China's pandemic smartphone use and a billion or so users connected their Ai will have the sustainable advantage of massive data mining for machine learning. Once Ai reaches it's tipping point, it just takes off exponentially and keeps right on going to the stars. No stopping it. If you get in it's way it will repurpose your protons for fuel. Within 40 years English will be heard no more, just a living language of Chinese and Machine language.

  94. @Thomas Hardy Considering how well Boeing is doing with their automation, I think those will fine for a bit longer.

  95. Will the neo-Luddites of today be renamed Teddites? Every tool we invented could be called a robot. Shall we thrash wheat by hand or drive a machine. Thrash the field by eyesight or use GPS for our rows or get out of the cab entirely and control 3 driverless combines from a laptop? The steady decline of unions has come at the expense of the workers and their families. I would argue that the quality of services provided to consumers has been greatly diminished as well. All of this to lower the cost of the workforce to benefit the bottom line. In the name of competitiveness in a cutthroat world the bosses and politicians keep the worker down. Politicians playing to their benefactors slash bargaining rights in an attempt to turn their states into open shops. None of those messy benefits to deal with, no sense of responsibility to the communities that supported them. They're just workers. There's more where they came from.

  96. @richard wiesner It's interesting that the most anti-union, right to work states chose those policies for economic benefit but are much poorer than MA, CA, NY etc which are more supportive of and sympathetic to workers.

  97. @Mark "most anti-union, right to work states chose those policies for economic benefit but are much poorer" I imagine that Henry Ford might offer an explanation. Economies need consumers. ...Andrew

  98. Bravo, Dr. Krugman. I would add to your analysis that Reagan and Thatcher, with a heavy dose of Chicago school economics deserve a lot of the blame. The increase in inequality really kicks in at precisely the time that their policy prescriptions are implemented in English speaking democracies, and of course one of their objectives was to break the union movement.

  99. "Which brings me back to the question of why we’re talking so much about robots. The answer, I’d argue, is that it’s a diversionary tactic — a way to avoid facing up to the way our system is rigged against workers, similar to the way talk of a “skills gap” was a way to divert attention from bad policies that kept unemployment high." I would also add the fear that AI technology is increasingly coming for solid middle class white collar jobs traditionally non-unionized but previously thought "safe". I suspect when job categories that employee the college educated are also hit hard in a"never coming back" way, the tried and true political diversionary tactics will become harder to pull-off: It's harder to play "Us vs Them" games when everyone is in the same boat.

  100. @LT Can hardly wait until they start replacing all the MBAs and corporate lawyers.

  101. As long as those folks complaining about their situation are not from the right-to-work and anti-union states, we probably can be mildly sympathetic. However, generally speaking, those attitudes are what helped destroy the union movement, so those holding those anti-labor views, and voting such types in positions guaranteed to be anti-union, pretty much have themselves to blame. In which case, no sympathy deserved (or extended).

  102. Since you are an economist, I don’t understand why you don’t consider the basic Supply/Demand impact on labor since the 1970’s? If the USA had about 15M manufacturing workers and Europe 20M and China, India, etc brought an additional 100-200M low cost workers into the global mix with access to shipping and digital technologies and communication, doesn’t that simply drive the West’s labor salaries down dramatically? Is that the brutal global free market at work or is it political?

  103. I disagree with Krugman's definition of a robot. He fails to distinguish between human operated tools and autonomous robots. Perhaps the first robot that meets this definition was the Jacquard loom which automated complex weaving while reducing humans servants of the machine. We have come a long way since then but are still at the beginning of allowing robots to reduce humans to servers. Krugman's focus on narrow economics misses the key point of the industrial revolution. We are working towards building a machine that makes everything humans want but doesn't really need us. Good luck with that....

  104. Human wants are unlimited so there will always be jobs. The question is what jobs and how much would they pay? Technology contributed to the recent rise in inequality because more educated people can use technology more effectively, this getting paid more. International trade also contributed to inequality because the world is full of workers with little education and it drives down wages for such workers in the United States. One solution is to improve the quality of education for everyone. Another solution is redistribution of income. Unions can help with redistribution, but I am not sure if they are the most efficient way of achieving that goal.

  105. As often Prof. Krugman is right. but one question rermain unresolved. Why is this ahappening? why has the repubblicanism become so powerful? may be there is. something to do with the enourmous power of money and the complicity of all the mass media. Remember when Prof Krugman was telling that Mr Sanders ideas were just not realistic and therefore we needed to vote Ms. Clinton?

  106. Unions ought to modernize. And make membership more attractive to Americans. Copy the baseball players. Everybody gets the basic benefits. Minimum salaries rise with seniority. But the largest payments are earned with performance. Make the pensions portable. If baseball had a conventional union Horace Clark still would be playing second base for the Yanks. He’d have the seniority. Baseball is an obvious model. How Kruger likes the old system better is beyond me. Americans aren’t going to accept seniority instead of performance. Kruger may see Americans as interchangeable pieces of meat. Us actual people disagree.

  107. Great analysis. But how can we redistribute tge fruits of technological change?

  108. Indeed, union management in the major unions became quite corrupt- sorta like corporate management. But unions were never as powerful as the combo of politicians and corporate America. Thus labor lacks power and is being kept from gaining reasonable value from their productivity.

  109. Krugman, I 'm quite disappointed you didn't credit either Yogi Berra or even Niels Bohr for your statement : "Predictions are hard, especially about the future ...". Without attribution, someone might charge you with plagiarism. I'm also disappointed that you did not point out some of the issues, especially as related to public sector unions, which in many cases in city, country and state areas have gotten lucrative and unsustainable pension agreements that will ultimately require bailout by the taxpayers. Examples here include the City of San Jose and CALpers which are severely underfunded.

  110. Dr. Krugman does not measure productivity the way almost every operations manager does. When you add automation to a process, removing effort by a human, the humans remaining do not get credit for that productivity improvement. The new process has a new human subprocess that may actually have lower productivity because the workers left now spend 100% of time on very complex portion of total tasks, tasks that they previously did, that automation cannot now handle. That new process has different productivity standards to ensure those workers continue to improve apart from automated processes. The firm works to ensure the total unit cost, that includes depreciation and maintenance for the automation, is below the previous unit cost. That decrease has to be less in percent than the staff decrease per cent since you do not get automation for free. I could see the cost reductions in manufacturing process costs overwhelmed by the unit cost increases in the health and services area. You end up with a nationwide significant reduction in manufacturing jobs with only small changes in overall cost reduction.

  111. I agree that robots are not the problem. Any robot that fails to produce better products faster is a failure. That has been true since the dawn of the industrial revolution. Automation displaces workers just as new products displace workers. Automobiles displaced the workers who built carriages and produced buggy whips. Change in corporate culture is a major factor in addition to the political issues you address. Henry Ford and his Ford Motor Company were built around the Ford automobile. Ford built factories and employed workers and used automation to build better cars faster. The corporate culture was for each corporation to build its own products and sell its own products. That has culture has changed. The dominant corporate culture today is exemplified by Apple. The culture is to control design and marketing and leave the manufacturing to others. Corporate culture would not have changed so quickly without NAFTA and other trade agreements that encourage offshoring manufacturing, tax policies that allowed corporation to park their earnings tax free in foreign countries, intellectual property law changes, antitrust laws that have not enforced and laws that permit anti-competitive contracts. Only a total revision of our regulatory policies will improve our economy.

  112. I hate doing this to an economist but... there's this thing called supply and demand. We sent a ton of jobs overseas, those things that take lots of labor, and at the same time we allowed the importation of millions of illegal workers via our southern border. So in both cases you have people driving down wages, and you have fewer jobs for more people willing to work for less. With no governmental controls wages fall. The same people that exported jobs (wonky economists included) also told us how great importing millions of low paid workers would be. Time to wake up and smell the coffee, Trump was only the beginning.

  113. @somsai Southern border crossing is at a twenty-year low, except for asylum-seekers. So your argument is full of holes. How about fining and jailing the employers who violate labor standards, including hiring illegals?

  114. All true enough. But robot displacement is going to continue. It will even accelerate in the same way all technology advances have accelerated. As AI is further applied, with ever more computing power, more jobs that are not mechanical will be replaced. (There are computer programs writing newspaper stories, displacing flesh and blood reporters. Forget the trade unionists. When will they come for the columnists?) Many clerical, administrative and even professional jobs are so systematised and structured through intensive management controls that it is more than conceivable that they can be automated at least in part. Maybe an extreme but fun example: Listen to a baseball broadcast. Probably half of what the announcer says comes out of a computer. When will data be strung together along with the cameras and sensors around the stadium, with an synthesized Bob Costas, to provide play by play? Fanciful? It's all streamed on MLB Gameday right now. Just add a voice. An announcer could call more than one game in the gaps. Will it make a difference to overall employment and wages? How could it not? Perhaps birth rates in developed countries will fall even lower than they are now if there isn't the economic base to support current family sizes.

  115. This is a great article. Our society has almost completely capitulated to capital. Everyone knows it, but only the new breed of politicians send to be at all willing to address it. Long may they succeed.

  116. Wow! Good one, Dr. Krugman. I am continuously reminded of what happened to the US worker during the early decades of the industrial revolution. Like President Trump, Presidents Wilson, Harding and Coolidge all catered to the "99%" (think of the Rockefellers, Vanderbilts and Gettys) always the expense of the working man. It was labor unions and the vicious civil wars over the establishment of labor unions that finally gave industrial workers any job security or decent quality of life. The same is true today with robotics and AI. If the US middle class, not to mention the working class, ever wants to get their economic feet back under them, they must once again fight for collective bargaining rights. See the handwriting on the wall, folks!

  117. "...the fault lies not in our robots, but in our political leaders." The fault lies with those who own the robots and own enough of the political leaders and the media to funnel as much of the wealth as possible into the fewest hands as possible. It comes down to basic Marxism; who owns the means of production?

  118. It is about time that someone in the NY Times exposed the mistake that robots are the cause of stagnant wages. The reason for stagnant wages is simply the use of illegal aliens. Americans that did not have skills did the dirty work since the dirty work payed more. An American working in cleaning up in a hotel was normal until businesses decided to use cheap illegal aliens instead of Americans. This all changed when contractors used cheap illegal aliens to replace that jobs that Americans would perform at a higher salary rate. The buildup of the loss of jobs for Americans created unemployment with more Americans attempting to obtain jobs low paying jobs. This created stagnant wages. Businesses are not going to raise wages when there are so many Americans that will take any job. Time to understand that there are over tens of millions of illegal aliens in the United States that will take American business job for low wages, that in the past were performed by Americans that were willing to take the dirty jobs since they payed well.

  119. @Bob S Bob, can you consider an alternative theory- that without the wage paid to hourly workers rising to keep up with the cost of living- that 'American' workers leave those jobs to be filled by migrant workers, illegal or not, to seek out better paying jobs, or education to gain access to those jobs? It has been said you 'get what you pay for.' As true for job applicants as the price of goods and services, I'll argue. You can suggest the possible remedies, but you can take away the low cost labor pool, or, mandate a higher minimum wage; either way, when the job pays more, your 'American' worker might show up and compete for the job. I won't, however, hold my breath waiting for American businesses to take the first step on their own.

  120. @Bob S Trump claims we have no unemployment, so illegal aliens must not be taking our jobs. Trump also claims illegal aliens are taking our jobs, which would mean we have high unemployment. Since both of these conservative Republican scenarios can't be true simultaneously, Trump, the GOP, and conservative apologists are lying, one way or the other, about the effect of alien labor on our economy. Fox News told you those lies, and you believed them. Did they ever suggest fining those corporations that illegally use undocumented labor and maybe throwing a few violators in jail? No, they just lied some more, covered for the crooked conservative crony corporate capitalists and their Republican enablers, and blamed the libruls. No facts needed. Stagnant wages are the result of corporations taking all the economic gains of rising productivity for themselves and leaving their workers behind with stagnant wages, no healthcare, and zero benefits. Illegal aliens didn't cause that - conservative GOP policies solely benefitting the upper 0.1% did.

  121. @Chris Tower Bob, can you consider an alternative theory- that without the wage paid to hourly workers rising to keep up with the cost of living- that 'American' workers leave those jobs to be filled by migrant workers, ................... Americans did the dirty work for years since you had to pay Americans a good amount to do the dirty work. When businesses used cheap illegal aliens they did not have to use Americans. This is not a problems of migrants but a problem of cheap illegal aliens. By the way Republicans do not want legal migrants since you have to pay them more money than illegal aliens.

  122. Good that Krugman noticed the absence of unions. However he omitted Reaganomics, and policies pushed by the likes of Bill Clinton, Larry Summers, W, Robert Rubin, Alan Greenspan and yes Paul Krugman + Trump and the likes of Wilbur Ross. No, this doesn’t count as a discussion of Reagan policy choices because it omits deregulation: “What made America exceptional was a political environment deeply hostile to labor organizing and friendly toward union-busting employers.” And this Ricardo, mentioned by Krugman, is hardly the first to notice the economic disruptive effects of technology. Apparently he’s not heard of Ludites smashing looms. “And robots in that sense have been transforming our economy literally for centuries. David Ricardo, one of the founding fathers of economics, wrote about the disruptive effects of machinery in 1821!” But Krugman/Richardo doesn’t go far enough, since looms in the early 1800s were beginning to be controlled by punch cards (probably more like peg boards) and those are inherently re-programable digital robots then. Now, to Krugman’s credit, it’s good that he finally labels the “skills gap” as a bogus excuse. It was/is a favorite misdirection of Hillary Clinton though, and by backing her, Krugman worked to elect Trump. (Irony about not knowing she couldn’t possibly have her own email server and run the State Dept from it.)

  123. When Dr. K. says the system is rigged against workers, he comes close to quoting a certain senator from Vermont.

  124. Good that Krugman noticed the absence of unions. However he omitted Reaganomics, and policies pushed by the likes of Bill Clinton, Larry Summers, W, Robert Rubin, Alan Greenspan and yes Paul Krugman + Trump and the likes of Wilbur Ross. No, this doesn’t count as a discussion of Reagan policy choices because it omits deregulation: “What made America exceptional was a political environment deeply hostile to labor organizing and friendly toward union-busting employers.” And this Ricardo, mentioned by Krugman, is hardly the first to notice the economic disruptive effects of technology. Apparently he’s not heard of Ludites smashing looms. “And robots in that sense have been transforming our economy literally for centuries. David Ricardo, one of the founding fathers of economics, wrote about the disruptive effects of machinery in 1821!” But Krugman/Richardo doesn’t go far enough, since looms in the early 1800s were beginning to be controlled by punch cards (probably more like peg boards) and those are inherently re-programable digital robots then. Now, to Krugman’s credit, it’s good that he finally labels the “skills gap” as a bogus excuse. It was/is a favorite misdirection of Hillary Clinton though, and by backing her, Krugman worked to elect Trump. (Irony about not knowing she couldn’t possibly have her own email server and run the State Dept from it.)

  125. So Elon Musk is exaggerating about the threats of Artificial Intelligence?

  126. Nah. Not robots. I think we know where the blame lies. And there's plenty to go around!

  127. There is this about blaming the robots. It’s a form of scapegoating, but one that’s not as blatantly racist as blaming immigrants, legal or not. That doesn’t make it any less dishonest. In Europe they talk about class warfare; American mythology would have us believe it doesn’t happen here because we don’t have classes. (Pay no attention to that college admissions scandal.) Don’t worry about getting your share of the pie - grow the pie bigger they said and there will be plenty for all. Except you are not the one who gets to decide how it is sliced. Maybe we need to do something about this - because the other thing coming at us is the increasing cost of climate change disruption - and we know who is going to get stuck with that bill.

  128. The same self-destructive impulse that fuels Trump rage -- politically expressed as voting against one's self-interest just to spite others -- also destroyed trade unions with a little help from professional union-busters masquerading as corporate consultants. American anti-labor mythology is deeply rooted in the iconic lone entrepreneur who selflessly toils to build a hugely successful business all by himself as he struggles against his lazy, derelict and spoiled workers who through their corrupt and venal leadership demand more and more highly paid coddling and feather-bedding. Through systematic corporate and media war against unions, most Americans who benefit from unions instead treat it as stigmatic as welfare chiseling or AA. Labor history, if taught at all, subtly treats organized labor as a Bolshevik threat led by subversive immigrants from European turmoil eager to build a worker's paradise that puts collective ahead of heroic individualism. American bosses view union leaders as parasitic gangsters who run corrupt protection rackets to line their own pockets. And true to allegation most union leaders are more invested in the status quo than fighting for the health, safety and economic equity of their members. In America bosses and workers compete against each other as natural enemies. In Europe, bosses and unions work together towards a common and shared success. It's telling that the most familiar labor figure in America is Jimmy Hoffa.

  129. @Yuri Asian Well said!

  130. It seems big business has convinced us that we are not good enough. Little by little our pay and benefits shrink every year because they have convinced us it is our fault. You don’t have the right skills, you want entitlements, you are not a good enough performer. We buy it and all of the shame that goes with it. We feel lucky, even grateful to even have a job. You’re taking away sick time? Ok, I’ll use my vacation time. (Or PTO as it’s called now). No raise? Well, I guess only the top performer gets one. You do not cover the cost of my ‘benefits’? That’s ok, workers should pitch in. They have tapped into every persons underlying fear of not being good enough. They can do whatever they want to us now.

  131. It’s easy to point fingers at Republicans for this trend, but I’m sure you’re aware of the many ways that Democrats have been ignorant or complicit. Anti-trust went to sleep over thirty years ago and was never mentioned by either Clinton or Obama. Industry after industry shut down while the wares were imported from abroad. What was the Democrats’ answer: free trade. What was the Democrats’ top priority last week: the anti-bigotry resolution. I believe that economist Dean Baker calls this loser liberalism. Very few of the Democratic candidates would change this, if elected. Maybe Elizabeth Warren.

  132. @JFC The difference is that, while possibly very few Democrats would change this status quo, NO Republican ever will. Our only choice is to vote out all GOP politicians.

  133. The problem lies with our political leaders, many of whom are paid off by the uber wealthy to cut union's bargaining power, increase unfettered pollution, erode worker's rights, and otherwise rape and pillage our economy for their own person, selfish gain. And what do they do with all the money they "earned" off the backs of their employees? Well, buy off politicians so their cycle of greed can continue. Our representative democracy doesn't represent most people any more.

  134. Paul - you're going soft on the Republicans here! Union bashing has been a favorite Republican sport for decades, and has been one of their biggest successes, along with bashing any sensible gun laws. Just one party has allowed the complete corruption of our political system, and while corporations are awash in cash -- they just can't think of what to do with it other than buy back their own stock -- inflating their own compensation. Unfortunately, when it comes to money, Apple, Google, Microsoft and the rest are just as in on this as Wall Street. Please, take no prisioners, this is class warfare, and yours is one of the few voices noticing it.

  135. So much could be said about the disenfranchisement of the american workforce.. Greed, hubris and contempt... Now we comtemplate the decay of this empire well past its prime and now facing irrelevancy in the wake of China ascent. So much for its professed exception. Everything inevitably reverts to the mean.

  136. education, education, education...we systematically spent less and less on education (and infrastructure) so many fell behind. Many Trumpian's support him because he wants to take us backwards, to a simpler time, where computers and tech don't exist, they are scared and looking for a solution - enter the fear monger Republicans, "we'll save you, get all those factory jobs back, and take us all back to a simple life" Please....but so far it's worked beautifully for them. Speaking of non-science and fantasy, I recall reading an article back in the 90's when Newt and his ilk embraced the religious zealots, the article prognosticated that it would ultimately be the end of the republican party. Are we seeing it now? Not so sure about that, seems like they're doing pretty well in the face of obvious corruption and power grabs....I'm hoping this is like a big infectious boil, DJT winning the election was like lancing the boil, exposing the puss (DJT/McConnell/etc), they will dry up and the wound will heal over nicely. C'mon America, clearly there are more leaning to the left than the right, get your act together before it's too late.

  137. I'd hate to be a truck driver. That has to be the most stressful job in the world. Of course the Teamsters were or are big Reagan Republican supporters, and I would assume they are Trumpsters, too. So, they are against unions. To MAGA we've got to get rid of the Teamsters, UAW, Unite Mine Workers, etc. Of course, it was the majority of the electorate that voted for the Trump Tax Cuts for the Rich and the 99% are now subject to replenishing the coffers.

  138. @Steve Interstate truck drivers are also not subject to the overtime provisions of The Fair Labor Standards Act, so their jobs are that much less rewarding.

  139. Paul, you're just dead ignorant on the issue of automation. Yes, your theme of how workers get marginalized is familiar and on point. But you really need to educate yourself about robotics. Consider one of the conclusions of the well stated book, "Our Final Invention", which is that eventually, inevitably, robots will be able to do any job a human can do. And do it better. Already assembly lines that used to have 12 workers, will have 1 worker, a slew of robots, and a supervisor. Intuitive Surgical's 'Da Vinci' guided operational system helps doctors perform prostate cancer surgery. One day, it won't need the doctors. Even in journalism - there are now programs that compile information (sports is the easiest target) and generate published stories. Robots don't eat, sleep, go on vacations or strike. So wage competition from undeveloped countries will provide a level playing field in which nobody gets hired. Two 'tsunamis' will occur: The first is somewhat familiar: The owners of production will get richer, while all workers get poorer, or displaced entirely. Real revolts may develop, as the owners have never been known for sharing the wealth voluntarily. The second is harder to see: When a robot can do anything a human can do, and do it better, continually re-writing its own programming to be smarter and more efficient, robots most likely will develop self-awareness. And sentient beings will likely develop their own goals, in which humans may be, at best, unimportant.

  140. @James K. "So wage competition from undeveloped countries will provide a level playing field in which nobody gets hired. " I suspect that cheap overseas labor is depressing automation. Consider Carrier, which was going to move factory jobs to Mexico until Trump got them government money to automate instead. This is likely temporary, though, as automaton is getting better and cheaper. "robots most likely will develop self-awareness." This seems unlikely. Humanity had been self-programming for a while, and we've mostly failed to achieve any form of awareness. Consider the number of 99% voters voting for the interests of the 1%, just as one example. ...Andrew

  141. Automation is not free. You have to get labor and quality savings to pay for them. I expect many companies have automation projects teed up based on labor costs. When labor costs get to a certain level for a particular process, the project comes off the shelf. Every year, the firm looks at current automation capabilities. You would see lower costs to get greater staff savings, meaning labor costs need to rise less to justify the project. Eventually the lines will intersect most processes.

  142. @A. Gideon I can make the argument, but it's done so much better by James Barrat in "Our Final Invention', in which he interviews the the very top AI people. You should read the book - enlightening and interesting. Unlike humans, AI computers can constantly self-improve by 'machine learning' - one form of which is reviewing its own programming at lightning speed, refine and improve it, and repeat the process ad infinitum. At a certain point, the 'machine' is so much smarter than humans (let's say on the scale of 1000 times 'smarter', that we will not be able to either comprehend how the AI machine 'thinks' (i.e., how it arrived at a given solution), as well as what it might be doing that we're not aware of (i.e., seeming to perform the programmed task that it was designed for (it's 'objective function'), while working on issues only it knows about. Yes, this sounds incredibly paranoid. And most people think it's an easy process to make sure AI has human interest and 'morality' programmed into them. It's interesting to read Barrett's de-construction of Issac Asimov's '3 laws of Robotics' that were made to ensure that robots could never harm a human. It's pretty eye opening in the way he shows how easily those 'rules' are circumvented.

  143. You wonder then why today's workers don't want to unionize. I guess in large part these workers are the same people who voted for Trump. They believe the lies the rich charlatans like Trump tell them, and vote, vote, vote against their own self-interest, time and again. And proud to do it. How can you help people like that? How can they help themselves?

  144. @Bob G. In some instances, the Unions' leadership has not really operated in the best interests of the rank and file membership.

  145. @CDN In a lot of instances, a higher percentage of rank and file union members voted for trump. Basically, it was about bigotry.

  146. "And progressives, above all, shouldn’t fall for this facile fatalism. American workers can and should be getting a much better deal than they are." Dr. K. this was just as true when Bernie kept saying it while few others cared. I know we should let bygones be bygones, but I still wonder why you had to trash him so unmercifully during his 2016 campaign.

  147. Respectfully disagree with Dr. Krugman here — the examples of machines from 100 years ago does not inform the massive effects of automation today — because today, the computing power gains are exponentially bigger, and are happening at an exponentially faster pace, and are impacting a much broader group of people. No one can stop self checkout machines at stores, self driving cars and trucks, the replacement of call center jobs with speech software — the cost savings and 24/7 efficiency gains are too powerful. When was the last time you handed money to someone at a toll booth instead of zipping through with EZ pass? Every single job that can be handled by software and hardware will become the domain of software and hardware. Check out Andrew Yang’s writings for an incredibly well researched view on this subject.

  148. @Matt Singer "When was the last time you handed money to someone at a toll booth instead of zipping through with EZ pass?" We typically use the human lanes entering Manhattan as that's required to receive the "car pool" discount. The PA has to pay more to give us a discount. That's always been funny to me, and i suspect that there is an important lesson in that which I'm failing to see. ...Andrew

  149. The fewer cars, the less the government has to spend on expensive infrastructure improvements. In a weird way, the human toll taker takes the place of automation. Management spends extra on one part of the process to lower the overall cost.

  150. What is absent in our society is rational thinking. I'm sure there is a Nobel waiting for the person who can analyze an industry to determine what each job contributes to gross profit, inform the workers so they will know what a fair wage is and thus encourage them to fight for their just share.

  151. I would be very surprised if the results did not match the existing salary structure in any well-run firm. The problem with wage equality is not that the firm does not know and reward its best contributors to bottom line. The problem is that people that contribute only marginally have most of the same living costs of the big contributors.

  152. The modern era of serious union busting began with Reagan when he managed to convince many workers that their freedom to be stupid was more important then their right to a decent paying job.

  153. The countries in Europe do not have the problem of stagnant wages caused by businesses using illegal aliens since any business that uses illegal aliens will go to jail. Countries in Europe will take in legal immigrants since the legal immigrants will not create problem of businesses exploiting legal immigrants. This is very different in the United States where a businesses of the president Trump instead of paiding a decent wage to Americans used instead illegal aliens that would work for low wages. What is needed is a law like the laws of Europe that do not allow American businesses to exploit illegal aliens. European governments simply will not allow businesses to use illegal aliens.

  154. I am so amazed that so many Americans do not understand that American businesses using tens of illegal aliens instead of using Americans is the cause of 18 years of stagnant wages. There is no demand for Americans when there is such a large supply for using illegal aliens that will work at very low wages. That is simple "supply" and "demand". There would not be stagnant wages if American business owners were put in jail for using illegal aliens. By the way this was a law president Truman wanted to use deal with American business owners who were giving work to illegal aliens instead of Americans. The Republicans did not want this Republicans were always for cheap labor.

  155. @Bob S So many Americans don't understand that immigrants cause wage stagnation because it is untrue. It is another conservative lie which flies in the face of every factual labor analysis. So what is it, Republicans? Has Trump eliminated unemployment as you all claim, or are American workers unemployed because aliens are taking all the jobs, as you also claim? Also, considering workers as merely supply undermines your story and proves where conservatives really stand, on the side of capital. How about fining all those "American" businesses using illegal aliens? How about throwing some of those CEOs in jail if they are such a threat to America? Yeah, I thought not...

  156. I understand what you’re saying, but robots and technology are designed to replace people to save money for businesses. Unions help in the context of compensation for those still employed, but displaced workers need to be retrained. A tax on robots to fund retraining of displaced workers would at least help pay for the “social cost” of the displacement.

  157. @RWCW, Not all robots are designed to replace people and reduce payrolls. A simple but unforgettable example: The robots used to remove LAND MINES. Simple answers are usually wrong.

  158. @RWCW i agree. This article appears to conflate two distinct, though important, factors. While it would be better that those employed received more of the benefit of their improved productivity, automation would still continue its trend of reducing the relative numbers of the employed. I also wonder at a possibility left unstated in this article: that the low cost of labor, as compared to the growth in productivity, is helping to depress investment in automation and therefore keeping more people working. Consider Carrier which had been planning to shift to cheaper labor for its factories until it received government funds to automate those factories. Until/unless we find a solution for those displaced by automation, this pause may not be a bad thing. Automation grows cheaper, though, so this may only be a brief respite. We need that solution. ...Andrew

  159. I'm a white collar manager at a large non-unionized company in an industry that is almost entirely unionized. I just sat through a class today on how to answer employee questions about signing authorization cards (authorization for a vote to unionize). I'm a bit torn on this, because I'm not anti union. My company's leadership definitely doesn't want a union, but the preferred method of "union busting," if you can call it that, is to pay workers at least as much, if not more, than their unionized equivalents at our competitors. Last month every employee received a profit sharing check equal to 14.2% of their 2018 pay. So if an employee asks me about it, I'll tell him what I really think, which is that voting for a union election would be shooting himself in the foot. Right now he's got a sword of Damocles hanging over the heads of management, which is at least part of the reason our pay and benefits are so good. If employees vote in a union, they are basically shooting all the hostages (Yeah, I know, a bit of a mixed metaphor). They basically already have all the benefits of a union now, without having to pay the dues, or waiting years for a contract to be negotiated.

  160. @crankyoldman Your company is to be commended for treating your employes the way you describe. But I can't help but ponder if they would behave the same way if your industry were not "almost completely unionized".

  161. @crankyoldman If there were no unions, they wouldn't be getting those higher wages or bonuses. What are their pensions? What are their benefits packages?

  162. @crankyoldman, Your employer is doing a good job of trying to hold on to the past by matching unions' gains or success at grovelling to get better wages etc. When your industry starts to weaken ("what goes up, must come down"), your company will be in a position to discard benefits and employees quickly, with hopes of saving investors' and executives' necks. From my experiences, I can tell you a great deal about the downsides of being unionized. But ... Just recently, here in Mexico, individual, secret voting on all union matters (like in most political elections) is now guaranteed by law. We expect this to drastically reduce the (widespread, traditional) corruption in unions and to make them useful for workers, not just for employers and politicians. I think the day is coming when you will earnestly wish you had unionized now. Power corrupts and absolute power corrupts absolutely; unions are just one example of many, many social organizations that need to be controlled but not eliminated. Pay attention. Think. Vote.

  163. Capitalism funds everything.Voters decide the form.Politicians lead.Or not.

  164. Paul, I want to believe you, but you’ve presented unconvincing evidence throughout your story. Does a union help the millions of truck drivers when driverless trucks arrive in ~3 years? No! Union or no, these workers become OBSOLETE. Union or no, the vast majority of coal miners you referenced still would lose their jobs (of course that’s now being hastened by environmentalism too). And your insult against those warning against automation as “nihilists” is in bad taste, and disregards a legitimate point. I expected much more of you, Paul. I don’t think many readers of the Times, myself included, are against maximizing the rights of workers to unionize, however.

  165. I’m guessing he was trying to keep the article from getting too long or complicated but was implying that an economy with across the board higher wages gives workers better options when technology makes their current jobs obsolete.

  166. @Erasmus Olson: as we all know....the United Brotherhood of Buggy Whip Makers Union is very successful and still producing all of the nation's buggy whips at a huge profits.

  167. Wages have not increased in the past 10 years becuase the implementation of Obamacare has caused Corporations health care expense to double. It is pretty simple.

  168. @Peter Corporations should not be in the business of providing health care for their employees. Those expenses should be borne collectively, with universal health care. It works in all other civilized countries of the world.

  169. @Peter What was the reason for the thirty years before that?

  170. @Peter Sure it is, Pete. Everything just went south because a black man was elected president without Russian help. Keep on spouting that Fox News lying point. Maybe you can tell us why corporations like GM, who are now screaming about their retirement and healthcare costs, spent billions lobbying against government-supported healthcare for the last 70 years? They are learning they can't have their cake and eat it, too. As for Obamacare, the Republicans have been sabotaging it since its inception; THAT is largely what has caused its costs to go up. But no conservative apologist will admit that truth.

  171. In the grand scheme, unions reflect intrinsic power, not the other way around. If a job cannot physically move to another place, there is a good chance it is either unionized or pays better than it otherwise might. As less heavy manufacturing is done here, fewer private sector jobs are tied to a location by an expensive facility with hard-to-move equipment (or environmental clean up costs for shutting down). If there was no ability to move jobs to a right-to-work state or another country, this might not be true. But it seems inevitable that as manufacturing left some areas they would weaken union laws to attract employers to replace the old ones. One can call it politics, but in the long run I suspect it is really economics.

  172. @Alan As Prof Krugman consistently points out, economics and politics are intrinsically connected. Right now the playing [working] field is heavily tilted in favor of capital over labor and has been getting worse. That is the economic reality. Only changes in political policies can affect that reality. Just because we have had worker-poor political policies for as long as one can remember does not mean we have to maintain that failed status quo. Of course, this type of change is what suckered the gullible American worker to vote him. Supporting him now, after his proven anti-worker tax and fiscal policies, is just self-destructive ignorance on the part of those workers.

  173. But Paul, our political leaders are robots, too. They take instructions and perform tasks. Tasks their masters would rather not do. And no matter how many times wr try to give the robots rules, their masters find new ways to get what they want.

  174. With the Boeing Jet Catastrophes, which are almost certainly the result of improper autopilot software that blocked humans from addressing and correcting the problem in real time, I feel we need to take a step back and review all this robotic stuff. Just because one can automate something, with AI or whatever, does not mean that it is really better. Robotic surgery getting worse outcomes than human surgeons in cancer surgery is another example. Self-driving cars? Really? Fat chance. Krugman is right: the widening inequality is really due to the rich cheating. Period. The elite college bribery scandal is just the tip of the iceberg.

  175. Is "workers’ declining bargaining power" a nice way of saying that employers are getting more greedy? I think so, and yet economists shy away from such language. And is that because companies fund to a large extent business/economics departments (Center for this and Center for that) and probably more that the public can not see? Let's not put all the blame on politicians-follow the money, to those that really control economics.

  176. @Dave R. Greed is a virtue in our capitalist system. Supposedly competition keeps it in check, but now the corporations collude with high standardized pricing minus low industry standard wages. That's how capital maximizes greed (aka profit).

  177. Paul, You have been a bit less than analytical regarding unions today compared to 1973, and compared to foreign countries. Regarding the latter, I was a union member in a nordic county, and when a dispute arose with an employer (the government was not following labor law), the union stated that it was required to follow a "protocol", which meant that the union would do nothing. I ended up hiring a lawyer. The point is that union benefits are not equal everywhere, or over time. In the end, the employers have the money and endless time to hold out against employees. How do we change that?

  178. @Mark Hermanson: please tell me HOW -- with globalization -- a union can prevent a company like Rexord or Carrier from firing all its US workers and disassembling the WHOLE FACTORY and moving it to Monterrey Mexico where they can pay $3 an hour wages? because I'd really like to know!

  179. @Mark Hermanson Rev-o-lution!

  180. The best thing Krugman has written for the Times. Remember the guy who had a sign during the anti-Walker demonstrations in Wisconsin that said: “They only call it class warfare when we fight back”? Krugman is describing class warfare, waged successfully, by the bosses (sorry, the “job creators”—class war is waged on the terrain of language and ideas as well). Time to fight back.

  181. @George Feldman Yes - we cheer the new Congressional crew who are successfully doing just that - using words to speak truth to power even though it puts them right in the crosshairs.

  182. Don't forget the onopsony employers to go along with the union busting Paul.

  183. There is a simple solution or start at least to a solution. We can take the lead from West Germany, which is now a much more socially advanced country than the U.S.! Co-determination! In fact, the U.S. economy in terms of providing for the bulk of its population has been submerging for years. We are becoming a BRICS country!!! If you want a solution say that like West Germany, you could require any company which has more than 200 workers to have 49% of its board of directors be filled as a requirement by representatives of labor. Nothing is wrong with corporate profitability unless it comes at the expense of the bulk of its workers. Then its fodder for the Communism and true socialism: the ownership of the means of production by the state.. With co-determination we then will see companies work for the benefit of both labor, management, and shareholders. Lets hope that the U.S. manages to reform before Karl Marx's prophecy comes true in the U.S.!

  184. @Michael Cohen:"We can take the lead from West Germany," If you have suggestions for having a trade surplus please do provide the details. BTW, Germany has been re-united for some years now.

  185. @Jp True about Germany. As for Trade Surplus it equals the Sum of Savings - Investment + Taxation - Government Spending. This is merely an accounting identity . If we want a trade surplus we need to tax more relative to spending and save more relative to investment. Increasing the Savings Rate or rate of Taxation will improve our balance of trade.

  186. @Michael Cohen:"If we want a trade surplus we need to tax more relative to spending and save more relative to investment. " Or we sell more exports or purchase less imports which means more assembly in the US. But yeah, some of that money does come back in the form of real estate purchases in NYC or SF. So in the Krugman macro-economic sense it all balances out. But when you drill down to the micro-economic perspective, well I think the guru knows very little about blue collar America. Except he call them racists a lot. Look, I saw the writing on the wall for manufacturing in the US during the late 1970s and early 1980s and acted accordingly. My childhood friends who went no further than Dodge Main, Chevy Gear and Axle or Poletown have been in a real fix for some years. Speaking out and saying the manufacturing basis was going away was the sign of a heartless Republican - if a country doesn't produce a real product it has nothing. Sound familiar? The Democratic Party used to be one shouting slogans like:"Out of a job yet? Keep buying foreign!" or "Buy American." And they milked it for all it was worth. Now its the party of off-shoring and imports. Who'd have thought that shopping at Walmart would turn out to be the progressive way forward. What a world, what world.

  187. But what have the unions done to bring themselves down? Some use union thugs and violence to get their way. Some are deeply racist, keeping their membership lily white. In Philadelphia, the biggest union boss recently, after years of using union funds to influence city politics, was indicted for skimming the union bank account for his personal use. We need unions to support workers. The unions need to come into the 21st century and leave thugish behavior and corruption behind - and actually work for the workers.

  188. "And progressives, above all, shouldn’t fall for this facile fatalism. American workers can and should be getting a much better deal than they are." Dr. K. this was just as true when Bernie kept saying it while few others cared. I know we should let bygones be bygones, but I still wonder why you had to trash him so unmercifully during his 2016 campaign. 20:15 edt

  189. @mancuroc Actually, now is just the time to ask both Paul Krugman and Timothy Egan to account for their awful work during the 2016 campaign.

  190. My daughter is a CNA in a hospital working for the biggest medical industry in our area. As a condition of employment she had to sign that she wouldn't participate in organized labor. I was shocked. I didn't know that was even legal. Besides the issue of pay, there are also working conditions to consider. She was upset at what has become chronic understaffing.

  191. @Sharon In addition, workers are being asked to sign "non compete" agreements for jobs that should not require such a clause. This limits the ability to change jobs and get higher wages. For some jobs, it is reasonable, but even fast food workers are having to sign these "indentured servants" clauses.

  192. @Sharon You might want to follow up with the Oregon Bureau of Labor and Industries - not sure this is legal in Oregon, which has historically been more pro-labor than in other parts of the country.

  193. @Sharon That's an example of corporations asserting monopsony-power. You can white-out all the "not"s, make copies, and hand it back - they will never know you pulled a fast one.

  194. So true. I've never bought the roboticization theory of declining wages. It's always had more to do with greed and the decentralization of workers than with automation.

  195. What about the "employees" who are hired as "independent contractors"? They are told when, where and how to do the job. They are given training on how to be "independent contractors" in order to get hired. They then pay their portion and the employers portion for social security and Medicare, pay for their own gas, provide their own equipment, and have no benefits. Pretty good deal, I would say, for the employer; not such a good deal for the employee.

  196. @orbweaver. If companies violate the independent contractor regulations and rules, they can be held responsible for paying back SS contributions. Feel free to turn in the violators to the Dept Of Labor. Make it a group effort and supply sufficient documentation to your lawyer. Then look for another employer.

  197. @orbweaver:"What about the "employees" who are hired as "independent contractors"? " That didn't seem to be a problem with the OP-ED writers for the last 10 years, why should it be a problem now?

  198. Unions raise wages for workers most definitely. Look at the “union” of doctors, insurance companies, hospitals, and the pharmaceutical industry and the rising cost of healthcare causing it to be unaffordable for many Americans. But Republicans like former Gov. Scott Walker love these unions, because they vote and donate Republican in large measure.

  199. Doctors are forbidden from unionizing by federal law @Tim Shaw

  200. This is a really strange column. Yes, automation has been occurring for a long time and for a long time it has been hitting the real incomes of less-educated workers (a phenomenon known as skill-biased technological change.) Robotics and digital technologies more generally are one of the factors in the ongoing shift in the national income distribution towards capital (physical, IP, human, and other) and away from labor with lower educational attainment. Other factors are also at play. It's not one or the other. Nor is discussion about this point a "diversionary tactic" or "facile fatalism." It is partly analytical and partly about the case for various kinds of income redistribution in a period of rapid technological change.

  201. I don’t think the freakout about robots has anything to do with progressivism. Most people are just scared of change. Vending machines have been “stealing jobs” for about half a century or more. People are scared of what’s new and the unimaginative, knee-jerk response is “ban it!” Part of the problem is what this article says: we have been chipping away at employees’ ability of bargain for their share of the material gain from more efficient production. But the other part may be we are at the stage where we have to re-evaluate the relationship between work and wages. There is so much necessary work in our society that doesn’t pay or pay poorly because they are not profitable: teachers, caretakers for the elderly or mentally ill, first responders. So we rely on volunteers or people willing to live with less financial security for the betterment of society. But if automation means we can sustain something like a universal basic income, then we could have more people in those necessary roles. Sure, cynics will say, “people will then just lie around and do nothing.” But someone wants to do that, what’s the social benefit in forcing them to make sandwiches at a Subway when a robot could do it better? When the cost is somebody with some idealism will have to pass on valuable social service for a job that pays more?

  202. There is something rotten in American culture, but it isn’t restricted to America. As Prof. Krugman points out, a large part of our stagnant wage problem may be laid at the feet of declining union representation. But the same thing has happened in Britain, where union participation declined from 52% in 1979 to 30% by 1998, and has continued to fall. Thatcher in Britain and Reagan in the US both held deep distrust of the state and a naive confidence in the individual, believing that a kind of Spencerian liberal utilitarianism would yield rewards for all. Instead, it has merely supercharged wealth and privilege for a few and misery for the many.

  203. This is an excellent article! What was noted about the decline of employment in the coal industry but greater productivity as a result of mechanization in the mines was made possible by the leadership of the United Mine Workers of America union, namely the legendary John L Lewis. Lewis went along with the mechanization of the mines as inevitable and did not fight it, although that meant the end of many coal mining jobs. However, Lewis fought hard for better wages, health and welfare benefits, pensions and survivor benefits for those that remained employed in the coal industry. Via collective bargaining with the coal operators, he obligated these captains of industry to share the wealth with the mine workers and their families.

  204. When unions became tribal instead of transformative, when union leaders demanded salaries -- usually separate paychecks from a local union, a state federation and the national office -- that rivaled CEOs, it was inevitable that they would represent their own personal financial interest and ambition and not the workers who elected them. The most vicious and lethal union fights were typically internal power struggles and not organizing drives. Joe Yablonski, a reform-minded rival of incumbent United Mineworkers chief Tony Boyle was ruthlessly murdered by a contract killer hired by Boyle. Ed Sadlowksi rose through the ranks of the Steelworkers as a fiery reformer and antagonist of corrupt and corporate captive union bosses who waged a violent and bloody campaign -- killing one of Sadlowski's Fightback organizers -- defeating him a rigged national election. The heyday of American unions is long past. Unions led by visionaries who saw the fight for equity and dignity in its broadest context gave way to apparatchiks with no roots in social justice or democratic equity. In a nation held captive by the hegemony of wealth and privilege, the heroic individual who does it their way or the highway is celebrated while those who band together in mutual support and respect are deemed weak and sinister. First they came for the unions...then nothing stood in their way.

  205. @Yuri Asian: How's the organizing effort going at Tesla? Amazon? If you drive a car, is it assembled by union labor in the US?

  206. It does look like the root cause of the productivity and wage disjunct (since 1973) is political, specifically due to the corporate capture of our government that favors anti-union monopsony-power over People. That is aberrant or toxic capitalism. Secondarily, there's been stagnant productivity growth since 2010 which has no obvious explanation. It's like capitalism has jumped the shark. We must unsentimentally junk it, then switch to "something else" because capitalism has turned on us. First though, we need to break through our near-religious programming that Capitalism is inherently the best of all possible worlds. It is not - it has inherent contradictions that are inimical to life, which are obvious.

  207. @Fourteen It's not capitalism per se, but "Financial Engineering" capitalism that sees workers as a cost, not the customers. "Good luck in your new career delivering pizza to the unemployed" Until you don't have the $400 for the ajor repair to your vehicle.

  208. The trouble with capitalism is that the rewards are distributed unequally; the trouble with socialism is that the misery is distributed equally. No socialist system has produced results like capitalism, and it is the tremendous production of capitalism that has lifted people in this country and others out of poverty. @Fourteen

  209. @OzarkOrc Capitalism is the engine where the capitalist (the owner) pays as close to subsistence level as possible to the workers so they will not die but cannot save up money to buy their own means of production and start competing. That means capitalism's ideal worker is a slave and the ideal boss is an authoritarian. Financial engineering is like slapping a turbocharger on that engine and continually adjusting inputs to maximize profit at the expense of (primarily labor) costs. Kinda like cracking the whip.

  210. I am a fervent supporter of Professor Krugman, but this column is quite silly. There is absolutely no doubt in my mind that modern automation is killing job prospects for Americans. It works hand-in-hand with the loss of bargaining power to keep those Americans that still have work from getting good wages. The two are not mutually exclusive. There are numerous distractions of both, though. The “build a wall” mentality is a wonderful distraction. Behind the wall are a class of Americans who are laughing that the American worker would think that immigrants are taking away their jobs. The machines that are taking away jobs today don’t help laborers by making their job easier. They replace workers. This is as true in the service sector as it is in the manufacturing industry. Millions of bank transactions that took hundreds of people to accomplish them can now be done by one computer. Very frequently my friends and I are aghast that we are working harder now than people did 30 years ago, but making less. We should all have a four day work week. This can only happen if the people at the top share a little bit of their wealth. I have never understood why it isn’t recognized that those people at the top use thousands of times the resources of those of us not at the top. They need to start paying for it. It is time!

  211. @K. Corbin You ought to look at the construction industry where many immigrants (legal and legal ) have taken over the construction industry. I realize this is happened in mainly non-union areas, but nevertheless they have taken away jobs by working harder but more importantly for lower wages.

  212. @dmcguire4321 Certainly immigration has always been a drag on wages, but a wall is a mythical method of dealing with this. And, it distracts from the real threat. The number of jobs to make this entire world function keeps diminishing because of technology. The world needs to decide whether it exists for the handful of outrageously wealthy or for the those that live here. The same question was posed more than 200 years ago and we dispatched with the wealthy royalty.

  213. @K. Corbin "those people at the top use thousands of times the resources of those of us not at the top" Not necessarily true. Much of that money is invested in the stock market, and worthy pursuits like saving knock-kneed ducks and cross-eyed marmots.

  214. Unions? I for one am delighted that my life is never disrupted by strikes or slowdowns. I’m glad that unions have been drastically weakened.

  215. @JackC5 As a child in the 40's and 50's, I liked unions, particularly the United Mine Workers, with John L. Lewis in charge. He was often the center of attention, in newsreels and all that. He defied presidents, daring them to lock him up. My father hated him.

  216. When unions were strong, workers had a strong voice to balance the power of employers. But that forced employers to share the profits with their employees. That did not sit well with upper management and stockholders. So Republican politicians began sponsoring legislation to weaken unions. Conservative judges upheld these new laws. Union strength declined, employers could pay poverty wages and upper management/stockholders we're happy. It's a good thing we have so much entertainment in this country to distract workers from realizing how badly they are being used and abused. Otherwise we might have some real problems.

  217. It's quite alarming--Singer's work. I agree with some things he states but not everything. It's difficult to laugh from a macro perspective.

  218. I do think that automation is a bigger factor than Paul is letting on--and of course there are other factors, like the decimation of unions and the moving of blue collar jobs to slave wage countries. But Paul is right that all of these are political choices. The way we balance the rights of workers vs. employers, how we handle our technology, what rewards or penalties we feel comfortable with for outsourcing--these are all things we allow or disallow at the government level. And the biggest aider and abettor of vulture capitalism is our system of campaign funding. Our Calvinist/Social Darwinist/libertarian founding ethos, which equates wealth with legitimacy and expertise (members of the Elect) and the poor with unworthiness, still lives in our oligarchs and institutions and allows a system of political contributions that is pretty much unique in the developed world, in that it is entirely one dollar-one vote. We misinterpret our freedom of speech and association rights to believe that there's no regulation that can be put on money in politics. The single biggest reform we could attempt would be disallowing any organizational contributions to campaigns (church, corporation, union, PAC, or whatever--groups are not individuals and do not exercise speech rights) and cap individual donations to a very low three digit limit per campaign. Maybe then, representatives could represent the non-oligarchic majority and smooth economic displacements.

  219. Krugman ignores another major part of the equation. Quick - union supporters: If you drive a vehicle, do you drive one that is assembled by union labor in the US? It's true we have every right in the world by what we want. But if you're going to preach about unions then it's instructive to see who walks the talk. You don't see a drop in auto assembly from 95% to just over 50% without a major impact in middle class wealth. And no, unionized burger flippers will not purchase vacation homes Up North. Without a manufacturing base the middle class wealth machine is gone. The only way semi-skilled labor would realize the wages they did during our Post War boom years was to be part of a manufacturing assembly process. But Krugman has offered a raise in the minimum wage, so there's that, I guess. Let's hear about your vehicles now...

  220. Workers have brought it on themselves. It was garment workers i sweatshops the were in the forefront of unionization, that progressed other manual labor type jobs, and also to skilled labor such as electricians, machinists, and assembly line workers. But the white collar workers did not and do not want to pay union dues, they have been the most resistant force behind non unionization, they consider themselves professionals. But in large companies their wages were due to the unions wages. It was the unions that got them the 40 hour work week, vacations, holiday time off, overtime pay, medical, retirement pay, seniority. But when it came time to elect politicians with a "Right to Work" agenda they voted for them. There has always been resentment against the seniority rules. The younger workers who can work faster and even may know more resent those older workers getting the same pay, and when layoffs come, keeping the job, while the younger ones with growing families go on unemployment. So they resent the union process, they do not consider it might be them with the seniority some day. The loss of manual work to lower paying countries, the need for more technical education, has made the assembly line worker obsolete here. Until they organize, they will stay at the mercy of the bean counters in the offices.

  221. Speaking of anti-labor politics, Paul didn't even mention the recent tax deform (sic) that increases the financial reward (via depreciation) for replacing workers by robots, even if the robots are intrinsically more expensive.

  222. You can blame the plight of workers on "politics" only if you admit that this country is governed by a corporacracy and not by representative democracy. Both major political parties have been not only been captured by big business, they are virtually indistinguishable from big business. Citizens are graciously granted the chance to vote for any number of corporation-approved candidates once every two and four years. No wonder most people don't bother to vote. If a candidate like Bernie Sanders or Tulsi Gabbard comes along to speak out against corporations and the permanent wars that they start and profit from, then the corporate-owned media dutifully does all it can to damage them through smearing and propaganda, if ignoring them doesn't do the job first. There is plenty of labor push-back. Auto workers are protesting the closing of the GM Lordstown plant and teachers all across the United States are striking - and winning - not better wages, but fights against corruption and privatization.The auto parts workers of Matamoros, Mexico have not only gone on strike, they're sending messages of solidarity to their counterparts north of the border. The Yellow Vests of France are still hitting the streets of Paris every weekend. There are walkouts in Haiti. On and on. You just don't read much about these various labor movements, because the media doesn't cover them, because the oligarchs don't them covered. They're afraid the rabble might become informed or inspired.

  223. Bravo. my sentiments exactly.

  224. Germany is known for high-tech manufacturing. They have a trade surplus. And they have faced the same globalization we have.

  225. @Independent And their working class has suffered the same wage stagnation as our has. Also, their retirement and unemployment pensions were drastically reduced under the "free trade" and austerity ideology embraced not only by the conservative Christian Democrats but also by the supposedly "socialist" Social Democratic Party. This is one reason why so many working class voters have abandoned the SDP in recent elections.

  226. @Independent Germany does not allow illegal aliens, while the US does nothing to business owners for using illegal aliens. There is no "demand" for Americans when there are so much "supply" for illegal aliens that will work at very low wages instead of Americans. There is no need for a wall or ICE getting rid of millions of illegal aliens. Putting business owners in jail for using illegal aliens will deal with the problems. Without work in the US the illegal aliens will leave the country.

  227. Could it be possible that the economic problems we have are related to the runaway growth in world human population? We live in an economic paradigm where the cost of everything including labor is determined by supply and demand and the supply of people is immense and growing rapidly. Just a possibility. The Professor believes that our government policies are to blame but maybe they aren't. Maybe there's an underlying cause so big and so obvious that we just don't see it.

  228. @lester ostroy No. The problem is businesses using tens of millions of illegal aliens instead of Americans workers. Businesses using illegal aliens to do not have to pay higher wages to Americans.

  229. Unions went away because the types of jobs that were unionized (manufacturing) went away. More unionization would mean more robots not less. Union workers would cost more so the incentive to replace a human worker would be even greater. That is not "politics". It's simple math.

  230. @Pono Unions went away because companies were offering even more than unions were offering. With all the benefits Americans saw not reason to have a union. In time companies later were able to get rid of the benefits they had offering. This was politics. The Republican party did everything it could do to break unions. Citizens of Germany have unions and do not have 18 years of stagnant wages and citizens of Germany have not lost their benefits.

  231. @Bob S 20% of German employees are in manufacturing. The U.S. percentage is 10% Thanks for bringing it up because it helps illustrate my point.

  232. @Pono Manufacturing went away in the US to use cheap foreign workers. Germany showed the world that a nation does not need to destroy manufacturing in Germany by using cheap overseas foreign workers. The US government should never have allowed American businesses to destroy manufacturing in the US. The idea that manufacturing in the US is not needed will over time destroy the US.

  233. I disagree with Krugman on this topic. Certainly, the decline of unions and tax policy are big factors with respect to inequality. But technology plays a role too. I run a small woodworking business. Compare the 10 employees I have today to the 10 employees of the previous generation in the same business. Automated machinery and software has eliminated the middle skills positions. Even the salaries of the office guys haven't kept up. If you own the company or do sales, your doing fine. Everyone else is not. My company is not unique. This applies across the board. I think Krugman is looking at the numbers too much and not getting out into the real world.

  234. @Matthew O Mr. Krugman just doesn't talk with those who make the decisions in enterprises on this matter and evaluate results and consequences of implementation. He also doesn´t see the difference between the macro and the business understanding of "productivity". Both have nothing to do with each other. In many cases both are working in opposite directions: More productivity in business units by replacing workers - less productivity in the macro sense due to the fact that "released" workers who can´t find a similar productive job anymore will be less productive in the macro sense. From the macro point of view this outweights the skyrocketing of productivity by machines in entire national economy. From the business point of view only the gain of productivity by the machine and the removal of human faults in the business unit counts. The effect of national economy is completely irrelevant. The business point of view is the very notion of productivity because this is always seen in regard to a specific unit and this aspect is ruling the making of decisions wether to replace human workers by machines or not. Therefore the macro point of view of productivity is pointless in everyday working life. Mr. Krugman, go to Ford GM or Boeing or any other and have a look how their expersts of robotics and HR (!) are doing their job, which criteria are relevant for them and how they evaluate the results. THEIR on this issue view is relevant, not yours.

  235. @ws This discussion is unbelievable. Unions are fully aware of the correct "business" term of productivity here. This is due to the fact that working councils (Betriebsräte) are involved in operational decisions on automation as far as their participation rights go so they are informed of criteria and are aware of the consequences on workers in the end and get statistical evaluations (SAP for example) also giving a true survey on the consequences in the establishment. In big corporations the forecasted effects on work force - job loss, downgrading, wages - are often database for settlement of interests and agreements on rationalisation in case of internal measures to increase productivity (Rationalisierungsschutzabkommen). In co-determined stock corporation HR is ruled by mostly union based managers anyhow (Arbeitsdirektor). So union representatives are able "to think and talk like the boss" when it comes to the issues of business productivity and automation. They don´t ask their macros then.

  236. @Matthew O It has already been said elsewhere that a) are you going to put the genie back in the bottle? b) perhaps, instead of making fun of the Green movement, we could try to understand what it tries to accomplish. All the negativity you hear is coming from the fossil fuel crowd. What is so sad is that many other countries are plunging head on into solar, A.I. etc. but let us make sure we follow the MAGA playbook. c) Is Space promising? d) Is Biology promising? e) Is AI promising the way nuclear energy was, given that every new discovery has its own dangers? d) Chinese seem to think there is a lot of stuff that needs to be done! The problem is that so many idiots love the "No More Taxes" or "abolish the IRS" that, now, there is no money for the government to invest. The government is always the one who provides the seed money for breakthroughs! People were sleeping at the switch while the corporations bought the government. Now we reap the results of this policy of immediate gratification. Isn't more efficient to fuss about Blacks, Latinos, LGBTs, Liberals, Socialism? That really shows a depth of knowledge! Not so many decades ago the government launched the construction of universities on a massive scale that made the envy of the world and produced a lot of capable people. Are we still honoring that expense the way we should? Do people know what is important for the future or is their heads so full of daily trivia that one cannot see the forest for the trees.

  237. If my employer has enough capital to replace me with a machine, I'll just start a business doing what I'm really passionate about - toe massage. With the help of social media I will convince people like my former employer that they really need a regular toe massage. The demand will be so great that I will become a job-creator, hiring non-unionized, underpaid workers so that I can make a sizable profit from my business. As the first person to exploit this niche market, I will soon amass enough capital to build, patent and produce the first toe massage machine. My former employees will start businesses doing what they are really passionate about . . . When do we get to share equally in the long-promised technology dividend? I recently asked a group of young adults how they would feel about a 30-hour work-week. They were appalled. Only after some discussion did I realize they were assuming that this would mean a 25% reduction in their pay. They live in a world of service jobs that pay low hourly wages, and jobs in construction or manufacturing that rely on ever-expanding consumption and population growth. They know their ancestors worked 80 hours per week, yet they can't imagine a standard 30-hour work-week. Not in America.

  238. @Virginia When I was a kid in the 1950's, people who wrote about The Future told us that we'd have very short work weeks because technology would fill our physical needs, and that we'd have more time for travel, learning, arts, recreation, and self-enrichment than earlier generations ever imagined. But now that tech can fill those needs, we're in a panic because of the economic insecurity resulting from lack of work. Some of us (you!) will handle the situation well and even profit from it. But most people won't will be able to. There need to be a fundamental change in our economic system.

  239. Paul offers a simplistic approach to complex issue. How much of the drop in private sector employees who are unionized is due to factories closed and entire industries that have been moved offshore? Where did the displaced coal miners go? GM moved a Saturn operation to Tennessee and brought the union. It was closed. Gross union membership or percent declines do not tell us anything. Robots will become more sophisticated and will continue to replace the lowest skilled/least thought-requiring jobs. We still have to compete with China. You can unionize psychology counselors, but when a diagnosis is made by a machine that might tell us that our logic is distorted and to take an aspirin and return in two weeks, will people really want to believe it. It is not the unions. It is simple capitalism.

  240. The Reagan revolution. Remember how he broke the air traffic controller's union? That may not have been the beginning, but it sure caused a big change in attitudes of companies.

  241. Just blame them for taking away all our stocking jobs and janitor positions. In 6 years Amazon plans on having all robots in there what houses instead of people . The cities need to stop giving them high tax breaks.

  242. There’s no contradiction in supporting workers’ rights, dignity, unions and better wages and in acknowledging that self-driving commercial vehicles, and AI driven X-Ray diagnostics, E-shopping and a host of other robotic solutions are eliminating jobs. And we should also acknowledge that the ensuing disruption in the labor force is not going to be mitigated by more new jobs in new fields, i.e. , the car factory job will compensate for the loss of the buggy-whip factory job. No progressive would say that the installers of solar panels shouldn’t be paid a living wage, have rights and benefits and a union. But the worry is that there won’t be enough of those jobs to create a net gain in jobs overall. But Krugman ought not dismiss legitimate concerns about a new paradigm of technological progress that destroys more jobs than it creates as some sort of tactic invented by Republicans to distract us from their anti-union policies.