(Book of the Month)

The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee (W. W. Norton, Jan 2014, 306p) makes three important points:   

1) A strong case is presented that "we're living in a time of astonishing progress with digital technologies," that computers will continue to improve, and that "we're at an inflection point" where the curve starts to bend sharply upwards; 

2) A more problematic argument follows that "the transformations brought about by digital technology will be profoundly beneficial" due to increased "bounty"; 

3) The third key idea is most important and provocative: that technological progress, as it races ahead, will leave some people behind, "perhaps even a lot of people," and that growing "spread" of the technological bounty is a major problem. The authors of this well-written bestseller go on to discuss growing inequality of skills and superstars as the biggest winners in emerging "winner-take-all" markets. Of special note is the warning that the advantages of low-cost labor in developing nations will largely disappear by installing robots and other types of automation.

Both of the authors are at the MIT Center for Digital Business, probably not the best place for an objective analysis of the long-term pros and cons of digital technologies for all people. But, to their credit, they do focus on technology as the major driving force underlying growing inequality worldwide, and they devote several chapters to a wide range of strategies for dealing with labor force challenges.

Brynjolfsson suggested that "we need to get the diagnosis right before we come to prescriptions." However, as indicated below, there are many recent books and reports on this central issue. What is really needed is an ongoing consolidation of the literature, pointing our similarities and differences in remedial agendas, highlighting best practices worldwide, and taking action to pursue them. "More research" is too often an excuse for inaction!

Several excellent overviews sketch the contours of growing inequality within and between nations. Report of the World Social Situation 2013 (United Nations Publications, June 2012, 128p) examines key drivers of inequality, the impact of rising inequality, key trends in social/economic/spatial inequalities, why inequality matters, and the potential role of empowerment. The Atlas of Global Inequalities by Ben Crow and Suresh K. Lodha, both at the University of California-Santa Cruz (University of California Press/Myriad Editions UK, Feb 2011, 128p), uses informative maps, charts, and brief discussion to show differences within and between countries in economic inequalities, power inequalities, social inequalities, inequalities of access (to food, water, energy, digital technology), access to healthcare and education, and environment inequalities (climate change impacts, deforestation, air and water pollution). Capital in the Twenty-First Century by Professor Thomas Piketty of the Paris School of Economics (Harvard University Press/Belknap Press, March 2014, 685p) analyzes data from 20 countries back to the 18th century, arguing that the main driver of inequality--economic forces concentrating more and more wealth into the hands of the few-will almost surely continue, threatening extreme inequalities that stir discontent and undermining democratic values.

Divided We Stand: Why Inequality Keeps Rising, a report from the Organisation for Economic Co-operation and Development (OECD, Dec 2011, 388p), explains the widening of wage gaps and household income over the past three decades in a large majority of OECD countries, major underlying forces (globalization, technology, institutional and regulatory reforms), and the most promising policies to counter increasing gaps. Inequality in America: Facts, Trends and International Perspectives by Uri Dadush et al. (Brookings Institution Press, Aug 2012, 100p) also points to the rise of income inequality since the late 1970s and calls for increased investment in crucial public goods, a more progressive tax system, and international cooperation to avoid a race to the bottom. The Price of Inequality: How Today's Divided Society Endangers Our Future by Columbia University economist Joseph E. Stiglitz (W.W. Norton, June 2012, 352p) argues that moneyed interests compound their wealth by stifling true capitalism, crippling growth, trampling on the rule of law, and undermining democracy; he offers a plan for a more just and prosperous future. Aftershock: The Next Economy and America's Future by former US Secretary of Labor Robert B. Reich (Knopf, Sept 2010, 174p) views the main cause of the Great Recession as the structural problem of increasing concentration of income and wealth at the top, and a middle class going deeply into debt; he calls for a New Deal based on wage supplements, a carbon tax, higher taxes on the rich, a re-employment system, and wage insurance. Changing Inequality by Rebecca M. Blank, formerly at the Brookings Institution (University of California Press, Sept 2011, 240p) views the sharp rise in inequality as mostly due to increases in wage inequality, and critically assesses four ways to reduce the gap: improving skills (effect would be small), increased earnings (won't begin to catch up with earnings of higher-income people), increasing marriage to reduce poverty (small effects only), and an increased safety net (not likely to substantially reduce economic inequality).

Jobs are important, but the nature of work is changing for the worse. World Development Report 2013: Jobs (World Bank, Oct 2012, 420p) stresses that jobs are the drivers of development, shows that the best policy responses vary across countries, and explores the notion of the "good job" in that some jobs do more for economic and social development than others. Good Jobs America: Making Work Better for Everyone by Paul Osterman of MIT and Beth Shulman of DEMOS (Russell Sage Foundation, Sept 2011, 200p) argues that there are not enough jobs to go around, far too many jobs fall below the standard of "decent work," and a quarter of working adults are trapped in jobs that do not provide living wages or much hope of upward mobility; examples are provided, however, of how bad jobs can be made into good ones. Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Systems in the United States, 1970 to 2000s by Arne L. Kallenberg of the University of North Carolina (Russell Sage Foundation, 2011, 312p) shows the rise of "precarious employment" since the 1970s due to government deregulation, global competition, and weakened worker protections; the growth of low-wage precarious jobs with few benefits and no long-term security will continue in the absence of long-term counter-strategies. The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It by David Weil of Boston University (Harvard University Press, Feb 2014, 392p) offers the novel interpretation that large corporations have shed their role as direct employers, in favor of outsourcing work to small companies that compete fiercely with one another; the result has been declining wages, eroding benefits, inadequate health and safety conditions, and ever-widening income inequality. Handbook of Unethical Work Behavior: Implications for Individual Well-Being edited by Robert A. Giacalone of Temple University and Mark D. Promislo of Rider University (M.E. Sharpe, 2013, 360p) covers discrimination, ostracism, abuse, bullying, aggression, violence, revenge, fraud, corruption, and the long-term costs of short-term thinking. (No indication is given in the publisher's catalog as to whether these behaviors are increasing, but it would seem likely.)

The Paris-based Organisation for Economic Co-operation and Development has issued two very interesting and disturbing reports on the relationship of disability and of mental health to work. Sickness, Disability, and Work: Breaking the Barriers. A Synthesis of Findings Across OECD Countries (OECD, Oct 2010, 105p) describes a "social and economic tragedy common to nearly all OECD countries," where too many workers leave the labor market permanently due to health problems or disability, and too few people with reduced work capacity remain in employment. Despite improvement of average health status in OECD countries, large numbers of working-age people are leaving the workforce to rely on long-term sickness and disability benefits. A series of major reforms are needed to promote better incentives for workers, employers, doctors, and service providers to tighten inflows and raise outflows from disability benefits, and encourage job retention and new hiring of people with health problems. Sick on the Job? Myths and Realities about Mental Health and Work (OECD, Jan 2012, 206p) notes that mental illness is responsible for a "very significant loss of potential labor supply, high rates of unemployment, and a high incidence of sickness, absence, and reduced productivity at work." A conservative estimate from the ILO puts the costs of mental ill-health in the EU at 3-4% of GDP. "Today, between one-third and one-half of all new disability benefit claims are for reasons of mental ill-health, and among young adults that proportion goes up to over 70%." Moreover, there is an "urgent" need to address mental health problems in the workplace, since many jobs can cause strain or exacerbate mental illness. The OECD calls for more prevention and early intervention, shifting focus away from severe to common mental disorders and sub-threshold conditions, and greater focus on those who are employed rather than inactive.

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