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It will be ideas that solve problems created by new technology

manufacturingThe Associated Press recently moved a provocative series about the changing landscape for jobs in the United States. It made a good case that middle-class jobs eliminated by technology and the recession aren’t coming back.

This is not the first time to hear such dire warnings. Imagine the fuss in the horse carriage industry 100 years ago as it tried to compete with the fledgling automobile. More recently, the typewriter vanished after being conquered by the personal computer.

Generally, a disruptive improvement such as the automobile winds up creating more jobs than it eliminates. Historically, such changes have been good for the economy.

However, the AP report indicates that this time may be different — due to the rapid improvement in computer software that allows machines to do more jobs with greater accuracy.

Another difference is that a lot of the jobs being eliminated, such as an accountant or office manager, involve a college degree. So far, the recent improvements in technology are eliminating more jobs than they are creating.

The statistics bear out this argument. The United States lost 7.5 million jobs in the recession that started in late 2007. So far, only 3.5 million jobs have been created, but few of them in the so-called “mid-skill, mid-pay” category. Most new jobs are in lower-paying, lower-skill categories.

Furthermore, start-up companies that have traditionally been the backbone of new job creation are hiring fewer workers when they open. A Labor Department study last year said new businesses employed an average of 4.7 workers when they began operations. In the 1990s, that figure was 7.6.

The AP report is informative because it addresses a subject that politicians were unwilling to in last year’s elections. It’s easy to say that all the jobs are going to China, but a more accurate answer is that some of them are not going anywhere. They’re just disappearing.

Economists and technology experts who are upbeat about the future say it may take five or 10 years to sort through all this. Having endured more than five years of a difficult economy, that’s a lot to ask of Americans. The bet is that new ideas will save the day, as they have so often before.

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