Technology and inequality

Here are a couple of straws in the wind:

Private tutors are a luxury many American families cannot afford, costing anywhere between $25 to $100 an hour. But California mother Denise Robison found one online for $2.50 an hour -- in India. (Via Arnold).

And:

Research from IBM has predicted that by 2015 there will be 90 per cent fewer traders employed by the top investment banks as they lose their jobs to computer systems.

This is interesting because for years the conventional view has been that technical change and globalization have increased demand for skilled workers and university graduates relative to unskilled workers and so increased wage inequality. But might the next round of technical change cut demand for skilled workers? Or was the conventional explanation wrong all along?

Comments

[dearieme]

You do keep pointing out, rather persuasively, that the average investment manager is effectively not merely unskilled, but anti-skilled - in the sense that he does worse than a passive fund. So perhaps the key questions are (i) is your purported skill real, and (ii) is it sufficiently subtle, or even tacit, that it will be very hard to teach to a computer or to someone from a foreign land?

[Dipper]

Here in leafy Herts, when children at posh schools have to make costumes for dress-up days at school, their mums get them made by ladies from council estates in Manchester courtesy of the internet.

[Dipper]

Computer company predict computers will replace people shock!!

[james higham]

There's surely a difference between demand for skilled workers and demand for an increase in the number of them. I think it's the quality, not the quantity which counts.

[dave heasman]

I long for the day when entire boards of directors are outsourced to... well, anywhere really. Anywhere but England.