Race Against the Machine

soar to $1 billion. However, the wealth of the median customer, the one exactly in the middle of the distribution, wouldn’t change at all.

We’ll start with skill-biased technical change, which is perhaps the most carefully studied of the three phenomena. This is technical change that increases the relative demand for high-skill labor while reducing or eliminating the demand for low-skill labor.

Ever-greater investments in education, dramatically increasing the average educational level of the American workforce, helped prevent inequality from soaring as technology automated more and more unskilled work. While education is certainly not synonymous with skill, it is one of the most easily measurable correlates of skill, so this pattern sugg

The median worker is losing the race against the machine.

They think it’s because the pace of technological innovation has slowed down. We think it’s because the pace has sped up so much that it’s left a lot of people behind. Many workers, in short, are losing the race against the machine.

And for all their power and speed, today’s digital machines have shown little creative ability. They can’t compose very good songs, write great novels, or generate good ideas for new businesses.

The threat of technological unemployment is real. To understand this threat, we'll define three overlapping sets of winners and losers that technical change creates: (1) high-skilled vs. low-skilled workers, (2) superstars vs. everyone else, and (3) capital vs. labor.

We’ll call this the “end of work” argument, after Jeremy Rifkin’s 1995 book of the same title. In it, Rifkin laid out a bold and disturbing hypothesis: that “we are entering a new phase in world history—one in which fewer and fewer workers will be needed to produce the goods and services for the global population.”

Because the process of innovation often relies heavily on the combining and recombining of previous innovations, the broader and deeper the pool of accessible ideas and individuals, the more opportunities there are for innovation. We are in no danger of running out of new combinations to try. Even if technology froze today, we have more possible wa