I like this Paul Krugman column, but I would have given it a different ending. Krugman writes:
So if we want a society of broadly shared prosperity, education isn’t the answer – we’ll have to go about building that society directly. We need to restore the bargaining power that labor has lost over the last 30 years, so that ordinary workers as well as superstars have the power to bargain for good wages. We need to guarantee the essentials, above all health care, to every citizen.
What we can’t do is get where we need to go just by giving workers college degrees, which may be no more than tickets to jobs that don’t exist or don’t pay middle-class wages.
I would suggest three different points of emphasis:
1. Trade unions, even if they could become strong again (which is hard to see), would likely accelerate this process of substituting capital for labor, rather than counteracting it. A one-time union wage premium, even if it does not come at the expense of other workers, will put only a small dent in the long-term trend.
2. Let's reform education, so people either make effective teams with computers, or they specialize in areas where computers are not effective. The nature of "education" is not carved in stone, even if the sector is hard to reform.
3. I have never seen it suggested that this "hollowing out" process will lead to lower output, quite the contrary. Those gains go somewhere. This is a reason to encourage the ownership of capital and on a quite broad basis. Let's start by repealing Sarbanes-Oxley, but along these lines there is much more we could do. How about low-load mutual funds backed by claims to intellectual property or whatever else will prove the scarce input for the future? Identifying that scarce input is the key to making progress on this issue.