The U.S. economy, as so many of life’s big issues, has a blind-man-and-elephant problem. If you have a good job or you just got a raise, you think America has rebounded nicely. If you are still struggling to replace income you lost during the Great Recession, you think things stink. Who’s to say either is wrong?
Well, I am. Let’s all agree on terms first. A healthy, growing middle class means the economy is back on solid footing, right?
America is growing all right, but the middle class isn’t. Almost all of the middle class feels restless, a phenomenon I’m chronicling in The Restless Project. In fact, new research I will discuss below shows that in many places, most of the income growth since 2012 has gone to America’s 1 percent. In 14 states, ALL the income growth went to America’s richest.
This is not a new phenomenon. It began in the 1980s. Recessions have merely helped accelerate it. So did technology. And while billionaire Peter Thiel laid out an impassioned defense of robots this week (easy for him), there is plenty of evidence that very soon, robots will eliminate middle-class jobs and shove potentially millions of Americans into low-wage work.
Try as you might to retrain and retrain and retrain, most of you won’t be able to keep up with robots in the future. Science fiction warns us that artificial intelligence will arrive and force us into a robot war, as in “The Matrix.” In reality, robots won’t have to fight us on a battlefield. They’ll just take our jobs.
Get used to the word barbell, because you’re going to hear it a lot. In the barbell economy, we’ll have lots of folks becoming millionaires, and lots of overqualified folks stuck in dead-end jobs that don’t pay enough. Another term for this is job polarization, as used by David Autor of MIT.
But first, who’s “winning” the recovery?