Do we have a growth problem – economic, employment or both?
Why or why not ?
In his book The Rise and Fall of American Growth, Robert Gordon has famously claimed that we’ve seen the end of ever-increasing innovation gains and the economic growth that attends them. Alternatively, in The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, Erik Brynjolfsson and Andrew McAfee write that we’re at the dawn of a new era where the full impact of digital technologies will drive profound economic and societal gains that enrich our lives. Who’s right, and how can we tell?
There is compelling data that can be interpreted to support either of these arguments. Growth has remained stubbornly weak since the financial crisis, and real wages have stagnated for nearly four decades. Conversely, global poverty levels are estimated to be at the lowest levels in history, and traditional measures of economic growth may overlook important technological advancements. Finally, with the advent of the sharing economy, robotics, automation, artificial intelligence, and more, it’s unclear whether economic growth will continue to lead to employment growth. Oh, and the U.S. economy is nearing full employment—at least according to the metrics we use to track employment.
So: Do we have a growth problem? Why or why not? If we do, is it economic, employment, or both?