CARDIFF GARCIA notes that the last few years have been rough on employment in most job sectors...but not in the education and health services arena, where employment growth has been remarkably strong and steady. Assume for the moment that this isn't simply reflective of varying cyclicality across sectors and that, as he says, "to the extent that any sector has shown immunity to being disrupted by new technology in recent years, it’s education and health". Might this, from Ed Luce, then prove a problem?



But the spread of the robots will leave a large and growing chunk of the U.S. labour force in the lurch. In their excellent primer, "Race Against The Machine", Erik Brynjolfsson and Andrew McAfee point out that in the contest between changing technology and education, the former is winning. Too few Americans are prepared. Some, such as Mr Cowen, fear many never will be. He believes the federal government should pay a basic guaranteed income to all Americans – a despairing view that accepts there will be permanent losers.

Is this a problem? Maybe; such developments in education and health care might make them, to a much greater extent than they are now, superstar industries, in which highly skilled, very talented workers are extraordinarily productive and extraordinarily well paid. Entrepreneurs in online education might conceivably displace thousands of middle-income professors. Developers of quality diagnostic services, or even home health care robots, could earn huge returns will destroying millions of middle-skill jobs. And in one view, that could lead income further concentrated at the top while the ranks of underskilled, underemployed workers explodes—unless educational attainment can turn a large share of the latter group into members of the former group, an unlikely prospect. In that case, Mr Cowen's minimum income might be necessary to prevent the development of a highly unequal economic dystopia.

But an awful lot depends on just how much consumer surplus such innovations produce. Americans spend a lot of money on education and health care. They also spend a lot on other goods and services produced in an economy in which health care and education expense is a significant share of labour costs. What if those costs stopped growing? What if they fell?

Well, in that case it should be cheaper to employ Americans, and Americans should have more disposable income sitting around to spend on other things. And those other things might well be—indeed would basically have to be—labour-intensive, low-productivity goods or services that will help soak up displaced labour. Would those jobs pay wages high enough to attract workers, or to allow for rising real wages? That would depend on where (geographically) and in what sector the demand arises. But on its own, a surge in productivity in big, low-productivity sectors should be a very good thing for society. It's possible for that to translate into underemployment or unemployment, but it is by no means a certainty. Indeed, for most of industrial history "hollowing out" in high productivity sectors has not necessarily translated into a decline in middle-skill jobs overall. The present period might be different (or might continue to be different), but it's impossible to say without knowing what people would spend their extra money (and/or time) on.