The Barbell and the Concentration of Wealth

Title: The Future of Jobs: New Ones Arise, Wage Gap Widens
Source: Wall Street Journal
Date: April 5, 2004

From the article:

One unpleasant possibility, acknowledged even by those firmly in the trade-is-good camp, is that jobs will proliferate at both ends of the barbell -- and fewer in the middle. The result would be an ever-wider gap between well-paying jobs and poorly paid jobs. That, too, has happened before, as recently as the 1980s when unionized skilled manufacturing jobs evaporated.

Also:

Today, the sophistication of computers and spread of overseas outsourcing threaten many of the jobs that replaced old factory jobs.

So there is another fork in the road. The low road takes these middle-skilled workers into competition for jobs washing, baby-sitting, serving and nursing the elite educated well-paid classes -- pushing down wages at the bottom. The high road takes them to jobs more skilled than those they lost, the jobs that Chinese and Indians may do someday, but not yet.

Those who bet on the high road inevitably call for better educating American workers so they have skills to stay one step ahead of jobs that computers and foreign workers do. It is clear that to be a successful middle-skilled worker in the U.S. takes increasingly more schooling.

The problem with spending more and more time on "increasingly more schooling" is that, at any moment, the time you invested in schooling can evaporate. Then you are left with nothing. For example, people who invested in "increasingly more schooling" in the field of computer programming are now finding that their jobs are evaporating because of outsourcing to India. They are now left to spend two to four years retraining, and praying that the new occupation does not evaporate as well. And where does the money for retraining (and for paying the mortgage and feeding the family) come from during the two to four years?

This barbell is the concentration of wealth at work.