Transcripts For CSPAN2 Key Capitol Hill Hearings 20150403

Shows the way in which people are actually equally qualified can be put in an environment in which the context will do something within them that actually makes them perform less well than they would in another context and this been replicated in scores of studies. It applies not just to members of traditionally disadvantaged groups like women on difficult math test, for example. If you tell them nothing they will do as well as the men. If you remove that stereotype threat by saying, host of the time women dont do as well as men on difficult tasks but thats not true at this particular test the scores will be less. The same with white men playing basketball against the black man or white men doing against asians et cetera. So what would it mean to try to disrupt these processes of different creation . Well again, here i would have to refer to a lot of the social Science Literature but let me give you a few quick examples. First of all the rationale for affirmative action changes. Its now no longer a racial preference is given to somebody either too great a racial spoils system, or to compensate for past discrimination, nor is it a way of broadening the institution so that everybodys unique viewpoint is represented. Now, the purpose of affirmative action is to allow enough people in to challenge and sensor and break down the stereotypes about their group. That is a very different understanding of what the enterprise is about. Okay, so i could say much more about other cases that would support this but i wont right now. How would this make a difference . Let me give you a couple quick examples. Critical mass really amorphous concept especially in the higher into context. Nobody really knows what it means. The research that would support what i call a destruction understanding of affirmative action would give us an answer to that. The answer to how many people have to be admitted would be enough people to break down the stereotypes, right . Dividing people up into groups that occurs within an institution. For some groups there will never be enough and thats a big problem not at least we would start from the Vantage Point of social science that would give us a definite answer to the question. Second of all we can refrain cases that are really problematic like, for example the Public Employment cases where a Police Department hires a certain number of minority officers, and there are really problematic rationales that are out there to support that. And hear the rationale would change the way from the notion that somehow just having officers of a certain race will provide a role model and promote more respect right between the osha and the larger to me to be. Instead it would mean if you have enough officers of a particular race, they will change the white officers and they will begin to see the minorities officers differently and as a result they may relate to members of the community of the same race differently. The focus isnt on the Community Versus the minority officers. It on changing the minds of the whites. A lot more to say, one thing i will not have a chance to talk about my beloved saga in the q a is the research on social categorization which is about the processes which we place people into groups to begin with. If you look at a case like and hopkins was told to walk more than a late et cetera before any of that can occur, that normative stuff we first have to look at hopkins and safe email right . Versus new. Thats the process of sorting people into categories. There is Research Suggesting that this basic process of dividing people into groups in a particular context underlay stereotyping, stereotype threat and all that. There are some institutions, god knows i hate to hold the marines up as a model, but there are institutions that do a very good job of creating a large sense of we. So the people may retain a sense that they are black or latino or female but it is subordinate and, therefore,and, therefore, the whites and the males see them differently because they are all in it together as marines. Theres a lot that can be do i think in the name of raceneutral alternatives. Sorry to go over. [applause] so id like to just add a couple of comments. My comments well i think take us back to the beginning. Take us back to 1964. I actually helped linda by serving on the Planning Committee for this conference and it feels like ages ago that we started planning the conference. Initially was asked to be on the committee i actually didnt think i was a good fit for the committee. So its true that am a scholar of race and racism and the Civil Rights Act are concerned with race and race and among other things the frisson operate in a moment, i never conceptualized the Civil Rights Act is something to celebrate. So when i volunteered to speak on this panel, again titled the limits and future of antidiscrimination law, i imagine i would focus my comments on the limits of the law specifically the Civil Rights Act as a limited and limiting people legislation. Why have i been such a negative nelly about the Civil Rights Act . They were passed in response to the revolutionary advance of revolutionary people in the 1950s, 1960s. These revolutionaries demanded Racial Justice. The Civil Rights Act were passed in response to those demands. It is reasonable to conclude that the Civil Rights Act which is supposed to bring about, to produce Racial Justice that they were demanding. If thats what theyre supposed to do then they have failed. While the legislature was designed to address the subordination that black folks were forced to endure in this country, black folks remained at the bottom of every measure of well being in this country. Im about to cite some statistic and i thought at this point the statistics wouldve been charted out already but interest when they havent so allow me to remind you just how poorly black folks are doing a. Black women are four times more likely to die during childbirth than white women. Infant mortality rate for black babies is twice that of white babies. Black folks have high rates of hypertension, diabetes and Heart Disease than any other racial group in this country. So in general black people are sicker and they die earlier than their counterparts. And this is true even when one controls for class. Im going to say that again. This is true. We had a talk yesterday about the move from racebased to classbased interventions. This is true even when we control for class. This is not a problem of class not a problem of black people being more for the way people. This is a problem of black people being black people. Those are measures of health. The poverty rate for white people was 12 between 2007 20072011. The poverty rate for black people during a century the timeless 26 more than double the rate for whites. Approximately 1. 5 Million People are incarcerated in this country today. 350,000 of those people are latinos, african thousand of those are white and 550000 of those people are black. These figures are more disturbing would you conceptualize them in terms of the composition of the u. S. As atopic latinos make up 16 of the population 23 of those who are incarcerated. White people make up 63 of our country now. And make up only 33 of those who are presently incarcerated. While black people make up only 13 of the u. S. , they constitute 37th in of the people who are presently incarcerated. And then to our Racial Disparities in hiring. Just as an example is look at the faculty webpages for any law school in this country was a a striking absence of black and brown faces. Just as an example to look at the highest court in the nation, the Supreme Court specialty take a longitudinal view youll see an absence of black and brown faces. Out of 112 justices who have ever served on the court 109 have been white. If you like numbers that means 2. 6 of justices have been nonwhite. 2. 6 is a small number. So consider i can make reference to unarmed black man who have been killed by the police in the last six months. Michael brown, eric garner your on the negative nelly when it comes to the Civil Rights Act to if theyre supposed to bring the Racial Justice for black people, they didnt do it. But they did do something. It is undeniable that country looks quite different than it did 50 years ago. Unlike homer plessy i didnt have to ride in the colored section. There are going to white and colored water fountains in the lobby. The truth is explicit demonstrations of racism just not as, as they were 50 years ago. We have the Civil Rights Act as well as a better interpretation of the equal protection clause of. Okay. Employers to refuse to hire me just because im black. They can decide to hire me because i believe these earrings earrings. The policies may say no cornrows allowed. Thats unprofessional but they cant decide did not me because im black. They can decide in the hire me because i speak spanish and i want to speak spanish with some coworkers and they might have an english only policy. They can decide to not hire me or for me because of that. So black people are not subject to the same indignities they were subject to 50 years ago and that matters and that might be cause for celebration. But the truth is that while black people and other racial minorities are not subject to the same indignities as 50 years ago, they are nevertheless subject to indignities. Indignities have changed. But that may be the ultimate point. The ultimate point maybe this. I believe at least some of the architects of the Civil Rights Act that the law was going to bring about Racial Justice by attacking the most explicit demonstration of racial exclusion. So now in the face of the fact that attacking the most explicit demonstrations of racial exclusion does not destined bring about Racial Justice, if we are still interest in Racial Justice so we have to get what needs to be attacked. As it turns out the things that need to be attacked are not so obvious. Another way of saying the social practices that make in racial inequality are not as plain and unambiguous as they were in 1964. Indeed the practices that maintain racial inequality are frequently raceneutral. Im not sure that a statute that prohibits discrimination on the basis of race can get out of the. Maybe we need something that prohibits inequality on the basis of race. So what are these raceneutral practices that maintain inequality . Our refusal to recognize it as a economic problem. Its how we distribute educational and Employment Opportunities. And it is how we define marriage. Consider hiring legal academia. Law professors tend to come from the same can schools. And these can schools have historically, and currently, have been racially exclusionary. In order to get to these cozy up to take a standardized test. These tests have always been racially exclusionary. But jobs and the fellowships and the clerkships that of the stepping stones for this jobs in legal academia have always been racially exclusionary. We have to ask ourselves, how do we fix that. Then we have to ask why our schools and standardized testing and these jobs and the clerkships and fellowships, why is that the stuff of merit anyway . Why not Life Experience . Why not perspective, why not a Village Committee with a particular community . Won a peabody to bring your history and your path to these legal doctrines and perhaps to produce a creative argument that may actually get somebody here on the court. We should also keep in mind that race is a slippery, shifting thing the critical studies 101 teaches its not biological. Its social. As social its pragmatic. Its our purposes. When purposes shift race shifts. Something that might never been a characteristic of race in 1964 may be a character is to embrace in 2014. And may not be when they get in 2064. So, for example, in a resident of harlem i put on a resume i live in harlem. That is a characteristic of race. In 2064, living in august not good to be a characteristic of race not the same race. Speaking spanish prevent think is a characteristic of race. Latinas speak spanish nonlatinos dont speak spanish. In 2064 that may not be true. More latinos are not speaking spanish and more nonlatinas are speaking spanish. Winning his cornrows and these door knockers is currently a marker of race in 2014. May not be a marker of race in 2064 if we let bo derek have it. So i could go on and on. And so any at the discretion law that is not fluid, dynamic and responsive to the fact that race and the technique of racial exclusion are fluent and dynamic will necessarily be limited. Finally, as a cherry on top of my negative nelly kate im not exactly sure how fluid and dynamic in response to change the law can be. Perhaps the tendency of the law is to be static, and perhaps it will take herculean efforts to make the law not static and to make it respond to changes in society that regulates their perhaps those efforts to make law not static are not going to bear fruit we have a segment of society with power that is satisfied with social. Efforts to make blow response to change that will not there for when you this segment of society, that doesnt want the law to change a thing or to two make many laws on the books quite limited, given change social context. So i believe that the Civil Rights Act are quite limited given change to social context but im happy that i was able to celebrate its limited successes this weekend. [laughter] and so with that i will open up for q a. If you have a question, please come down to the microphone. [applause] im kathy, georgetown law khiara, that was amazing. Very right on point. I think one thing we can take from your is that maybe were at a point where we should be really hammering on extralegal ways to deal with this huge problem. I questions and comments are for sonu. Thank you for your presentation. I really like compared to four. Its interesting to look a what Different Countries are doing and the impact on those. I think you presented your work in a very descriptive way. There wasnt much normative but im guessing that normatively that you would come you like the South African system better than u. S. I think what you have is a really interesting that the materials to do a really balanced analysis. So some things you might want to think about the values of federalism, not putting so much power at the federal level, having states have a lot of power. Also predictability. When you privilege one value over another, people are on notice about what they can do and what they cant do. When you place these really important values equally, its not commute not certain about how its going to come down and thats an important thing to think about. But my question is really about the courts analysis that the South African courts analysis on this ordinance case. Certainly there are think we can see the harm done on both sides and if we truly believe that these values are equal then we might think about the harms and sql. When you presented the courts rationale, every argument was discrimination is bad discrimination is bad discrimination is bad. I always tell my students when you do value comparison, its not persuasive to argue that one value is important, one value is important. Its not persuasive we think about these important values as equally important. Im just wondering about how the court compared these equally valuable things that we want to forward, and why they come to the conclusion that tamping down on discrimination is better in this scenario that allowing religious freedom . Great, thank you. Yeah so do you think its a limit of the United States constitution and doughnuts for the Constitutional Values nondiscrimination employment. I was only suggesting that in that one particular South African case youre right in that case they came down on the side of the employed. Isolated that me to suggest that is that they should always come down on the side of employ. Thank you suggested they would be circumstances would come down on the side of the religious employer. So for instance, the class example for the ministerial exception would be if the catholiccatholic church decides that the record instrument on the basis of sex or sexuality entire increase. Theyre only going to hire straight guys, right . In that case ended and commentary on the South African case, in that case we should, on the side of the religious employer. Whats interesting in the house on the case the person was not solsona in the position of the minister and the employed was caught in a catch22. What im suggesting if there are to go important values, what it means is that sometimes one woman, sometimes the other. I didnt mean to suggest that only nondiscrimination but in the United States context its easy to see why often religious autonomy is going to win out and that is what i think is problematic. Theres a microphone behind you. Thank you, everyone for a very engaging presentation. My question is for ruth. To kind of questions, thoughts. First, i was was surprised, i assume utah but the success are you talking that due process and i was very surprised by the low, you said 18 or Something Like that. I was surprised because thats not normally the way i think about those cases where someone has the resources to show up and fight about the standard pretty good chance. So i was curious as to your views as to why that is so low apart from the issue of the discrimination against mom she talked about her identity thought about your project in this way but could be useful peace of the larger silicate investment in education. Youve alluded to that so i think your project could be helpful in that largest and. The second question i had was you talk about discrimination against moms in these types of cases. And the more i thought about it my wife runs a clinic at she always represents moms and child but i never hear about bad. I was curious if when youre reading the cases that ever stood up and to the extent that did our mom and dad showed up together, was there evidence that made a difference in the preceding . Okay, well, those are two great questions. Thank you, michael. First of all to talk about the successor but to realize the jurisdictions, and dont and about six restrictions are there a lot of cases reported on an annual basis and the other jurisdictions that result at the school visit level apparently be sufficiently successful that there isnt a lot of use for the due process and. We have to be careful on what we conclude when people dont bring due process claims. Does that mean the original decision was one that the parent proved of . Thats hard to know because theres also to present people dont pursue, lack of resources, et cetera. Its hard to know in the states i cant examine. But i do think the success rate is shockingly low and not what people might expect if they read the newspapers and care about kids getting multimillion Dollar Benefits for whatever. You know media always exaggerates. One reason i think the success rate is so is the training of hearing officers is shameful. Ive done some training of hearing officers and ive been disappointed in the lack of professionalism among that group. So think were the real problem with people who have very little training. You should read these decisions in ohio where i am. One officer writes 200 200 plus page opinion after a week of due process things. Crazy. Rampant unprofessionalism which i think in the School District are paying hearing officer. So theres all sorts of stuff there. In terms of others i have tried to coach for the presence of five whether or not in a present for me to have meaningful statistical outcomes. I found that when grandmothers are the one who were present instead of the mother it doesnt get better. There are a lot of grandmothers not just mothers who appear. When parents have attorneys they get better when they are pro se. Se. Se. These numbers to give you our aggregate numbers even including the fact most of these parents are represented by those. Im sorry, too depressing. I think we have time for one more question if anyone has it. I have two questions. I will try to be brief. The first one is for professor bedi. I wondered if you look at the influence of the human rights from possibly on the South African constitution. On utah but in terms of the switch from vertical to horizontal relationships, its between people. Thats something that is very common, and i guess just thinking about how that would affect the way that South African constitution privileges rights equally which i believe something fairly, and the human rights framework where you have a wide array of rights but there are privileged equally. I think there is literature on how youd go about balancing those, those rights. So im wondering if you look at that. And also for professor schultz. I guess you said that expanding the criteria of like what values you find important to employees or whomever, is one way that we can overcome discrimination or could be one of the answers to what is the future of discrimination. I guess im wondering what role do you think a lockin play in that or should play in debt. And i do worry if we are thinking about our past effective and thats what people do these other things are important, convince white people the skills of other people with different expenses are equally important to if we are living in a society where people with certain experiences and balances have been privileged, they created the institutions that control everyones life, how is it that alternative values will ever be able to become part of that, of those institutions . Any thoughts on that . Well, thanks to i dont talk about human rights in this paper but i do in other words. Interesting, outside of International Criminal law which is that their exception, by and large human rights are all vertical in nature. A constraint the state. States are immoral actors in yemen rights universe. Not individuals. I suggest in this other paper that im writing that as a result, the way we currently think of human rights discourse is problematic for the very reason. I think its the case that rightsbased regime are often vertical he faced. So what if he points is thats problematic insofar as that we do think to constrain individuals and have the principle mentality. I think its come as much time as i took i didnt have quite enough time to explain the last ferry of affirmative action, but i actually would not associate it with expanding the criteria. That is associate more with what i call the diversity framework. And their critiques of the diversity framework are what this giving birth to the new one which i called disruption. The basic critique of expanding the criteria, right, which was the main strategy of diversity advocates, is that it may come down to the fact that no matter what criteria you have, no matter how expansive and inclusive they are, if people dont have a motive and the incentive and the goodwill and so forth to try to reach across race and to reach across the sex and to bond together it doesnt matter what the criteria are because outsiders will be harmed no matter what. And so the focus of this new approach is not necessarily to expand the criteria, but to look at the bias with which the criteria are implemented, the ways in which people compete based on those criteria and harm each other and to fight each other and experience lack of solidarity. In this room in 25 minutes. Perhaps given the sexualized nature which women candidates and issues are framed mike b. More apt to discuss the tactics. Some of that occurs in blatant ways. For example, my opponents supporters used photoshop sexual images with my face or my head on them in order to invite a response from potential voters, to view me as highly sexualized rather than intelligent and confident of the potential state leaders. There were also questions raised about my suggestion that i abandoned my children when i went to law school. So doing attention was diverted from my achievement and i have no longer been applauded by also juggling the response abilities of caring for my young family. As to the reviled, for selfimprovement at the expense of giving my full time to childrearing. For writing this land is your land but very much more than that. Born in 1912 in oklahoma and so we are very proud to have his work back in oklahoma where we think it belongs. He was an advocate for people who were disenfranchised and for people that were Migrant Workers from oklahoma, kansas and texas. They would find themselves in california literally starving. And he saw a difference between the two for the haves and havenots and became the spokesman through the music. She recorded a few songs of his own. We have a station that features 46 songs in his own voice and that is what makes the recordings that he did makes a significant and so important to us. Watch all of our events from polls on saturday at noon eastern on cspan2 book tv and sunday afternoon on American History tv on cspan three. They recently hosted a forum on the impact of technology on the u. S. Economy and workforce. It brings together former Administration Officials economic scholars, Technology Experts and business leaders. The next portion includes opening remarks by former treasury secretary robert rubin and the first panel discussion. It runs just over an hour and 40 minutes. On behalf of my colleagues at the hamilton project i welcome you to todays discussion with the future work in the machine age. Before i laid out the issues. We started about nine years ago. We are a partnership, Small Partnership of policy experts former government officials, academics and business leaders. And if the architecture is totally open. When we have to policy proposals they are commissioned from leading experts around the country and then they are reviewed rather than coming from internal staff. Our purpose is to support policy development and the purpose of the policy discussion debate and dialogue. We we we be the facet is particularly important at this time when unfortunately the Public Policy debate in the United States has become so affected by politics, by adding knowledge he and my opinion that isnt grounded in facts or an object of analysis. The hamilton project works with the Brookings Institution and brookings country is enormously to our vitality. Since launching the hamilton project coming our view has been the objectives of Economic Policy should be wrote, broadbased participation in that growth and economic security. We believe these objectives can be mutually reinforcing as it is so often argued. For example, widespread income gains promote growth by increasing demand, by increasing the ability of workers to access education cant attrition, housing and so many inputs and factors that contribute to productivity and increasing Political Support from a public and Political Support for the growth enhancing policies. We support marketbased economics and equally we support a strong role for the government to perform. And that takes us to todays subject in the age of the machine. The Technological Development and the globalization are the keys to increasing productivity and growth, but they put pressure on job creation and on wages. Over the past few decades as the Technological Development has increased at a rapid rate and globalization has increased from about wages have increased sluggishly or even stagnant and an equal city has increased substantially. It was the second half of the 1990s when tight labor markets increased incomes at all levels. Today we are going to talk about how to think about the tension between the growth enhancing effects of technology and globalization. On the one hand, and the effects of technology and globalization on wages and job creation for low and middle income workers. Of this forum is a continuation of a long line of programs that weve had a project focusing on low income and lower income workers. Growth is necessary but not sufficient for the purpose of aiding and enhancing the economic position of middle income and lower income workers. Growth predates a tighter labor market thats happening in the mid to late 90s and it increases the pie. But we do need a broader perspective. For example, it is a focus on education and policy is to focus on job creation and productivity through Infrastructure Investment basic research and so much else. To promote growth and directly improve the position of the American Worker. With this frame in mind, i will pose a number of questions that todays discussions may address. Its Technological Development likely to continue moving forward at a rapid rate and with great Economic Significance or as some argue what it slow and its a significant decrease. Relatedly, the American Economy intact or has it declined . If you dont have dynamism than the Technological Development will be applied. It shows the rate of the business formation in the United States has decreased significantly in very recent times. Is that relevant to the question of dynamism in our society . And if it is is that a cyclical phenomenon or something more fundamental . So many activity has clearly fallen to the relatively low levels over the last few years. Again is that a cyclical phenomenon or something secular and more fundamental happening. If labor displacing technology does move at a rapid pace and with Great Potential for Economic Significance, and if dynamism continues such that technology is deployed, while the new industries and jobs develop that will replace those that have been lost and whether those be wellpaid in other words what will the net effect of this be on the job creation and on wages for middle income and lower income workers . To go further are there trends in the workforce that but are not yet adequately understood that may relate to these questions for example within a church jobs themselves change . With fewer employees of companies and more independent contractors with the increase of the number of income the number of functions performed by the independent contractors eating a function of the enabling cover of the technology for example what is the future of the clerical health when you can get clerical help on an online basis on demand. And that takes us to policy. Policy that can help address the challenge of globalization come if those pressures continue aside from improving the ability of workers through the facets of Education Training to succeed in this new world are going to need an enormous amount of creative focus. For example, we may need an increase in the earned income tax credit not only for those that receive it at the present time but perhaps much further up the income scale. Measures to facilitate collective bargaining can result in a broad participation and benefits of productivity and growth. And there are a number of possibilities and potentials to consider in the policy arena. Moving further their media fundamental question thats going to be have to answer and it may be a distant future time. But when we have the rapid Technological Development and it is labor displacing at some point in the future that maybe some distant point in the future should that lead to a basic change in my styles with less work, more leisure and they rich and more robust use of the leisure. And if the forces of technology and globalization continue to create the rising inequality even if it is accompanied by growth in addition to everything that needs to be done to enhance growth in the labor market and to improve the position of the middle and lower income workers should there be increased redistribution to accomplish the broad objectives of our society and if there is to be increased reduced edition how does that get done without impeding growth . The United States has tremendous strengths and we are well positioned to succeed over time but we need an effective government. There is a reform on immigration, k12 education, energy and so much else. In that context, Technological Development and globalization raised the issues that ive just mentioned and others that will come up in the course of the discussions. The profession for the center of Digital Business, mit school of management and the Principle Research scientist for Digital Business at mit. They will be introduced by roger altman, founder and chairman. The first is entitled the future of jobs. I just introduced the professor of economics at mit, the cofounder and and executive vice executive Vice President of analytics and former chief Technology Officer and secretary of the treasury and the University Professor at harvard. The moderator will be melissa the director of the hamilton project and the professor of the university of maryland. The second panel is the future of the business and the patient and in addition the participants will be the professor of economics and the distinguished University Professor in maryland the Research Project agency known to all of us as darpa. And a member of the Advisory Council on the hamilton project. But we close by extending the particular thanks to melissa who i have already mentioned, the director kristen mcintosh, the managing director come and brad the visiting fellow at the hamilton project providing the intellectual constructs for the session and putting together what is a workable program. Let me also thank the member of the staff for everything we do projects with that let me turn the podium over to roger altman. Good morning everyone. I will be brief. I think that the upcoming framing remarks and the panels that we are about to have our going to fit anyones description of provocative and i want to thank the entire hamilton staffer once again organizing an event as rich as this and as substantive as this. We are going to start with framing remarks. They are both professors at mit and the school of management. And the Principle Research scientist at mit and in the field of research is the impact of Digital Technologies on business, the economy and on society. So we really could not have better framers including because theyve written a profound book many in this room and sure have read. The second machine age. I took away three points from this book. One that we are at an Inflection Point on the pace of Digital Technology will advance that it is accelerating and that it will produce unexpected and transformative effects. Number two, that these effects will be on the whole positive. Number three coming through the focus today that these effects also will produce considerable disruption. In particular the premiums which labor markets have increasingly been placing on education and skills that will rise sharply and my indication, the wage pressures and a lack of Employment Opportunities for those workers who do not possess the skills will worsen. Bob reviewed a series of questions that we want to debate today that stem from the book. The past 20 years have already seen labor markets plays place a big premium on education. Most people in this room are familiar with the ubiquitous charts that detail the returns to education. So this trend has been underway for some time and it is an absolutely central element in the outlook for the American Society and that has been underway for some time even apart from this prospective acceleration of the Digital Technology and its impacts. Thats why for example they described the challenge of and the race between technology and education. The obvious question is is it imaginable that we will raise education levels in this country in proportion to these rising skills premiums into the acceleration in the case of Digital Technology and its impacts that eric and andy are now going to discuss. Good morning. Its great to be here. America has never been richer. Private wealth is over 80 trillion. Our National Income whether you measure that overall were per person is also at record levels. American workers have never been more productive than they are right now and the reason for much of this is because of some advances in technology. But theres also a paradox. As bob mentioned it is lower now than it was 15 or 20 years ago. Andy and i if we can get the chart up here, we call this the greater decoupling the share of the workforce has also fallen and if you look back for much of the 20th century there was a sort of rising tide and in place of social contract people would participate in recently that has become somewhat unraveled and there are a number of reasons for that. The Great Recession didnt help but as you can see this started before the financial crash. Thereve been changes in tax policy and globalization. Theres measurement there is measurement issues we are not counting some of the goods but does that give us driving directions. That isnt really enough to close the gap. A lot of it has to do with changes in the nature of technology. And if you look at the broad sweep of much of the Wealth Creation has been traced to some amazing improvements in technology go back ten years ago where the generalpurpose Technology Helped ignite the Industrial Revolution and the generalpurpose technologies replaced a lot of muscle work with machines and by and large broadly they were complementary to the human labor, the wages grew and more people were working. But we are now in a think the early stages of what we call the second machine age where they are also beginning to supplant minds as well as muscle and do a lot of the control functions that used to be in trickle and only done by humans. In fact about ten years ago many of us thought there was a number of categories that humans were uniquely good at and that the machines wouldnt be very good at substituting for areas like dexterity, language unstructured problemsolving that in recent years there have been some big in preventing the Machine Intelligence and all of these areas catching some of us off guard. Thereve been improvements in robotics working in more and more factories doing all sorts of manipulations. Improvements in mobility. Its about 4 an hour and people all over the world, people in massachusetts and throughout the world are doing things like this it used to be a unique capability. These days if you see somebody talking on their phones there is a good chance that they are actually talking to a machine and not another human and expecting us to understand that of course they are not good yet, but we are in the middle i think about the tenure period where we went from machines not being able to understand what we were saying to us expecting it to understand what we tell them and answer our questions and carry out instructions and by any measure, thats a workable milestone. Machines are translating between languages. Skype will now let you speak in english and speak in some version of german or french or chinese to other people. They are writing simple stories about apples and the most valuable in the world the text isnt all that exciting. Mostly the byline is written by somebody with the Narrative Science that the machine and they write thousands and thousands of the stories about sports earnings reports and lots of other topics. My favorite example is what happened in jeopardy where you have all sorts of questions and a variety of different topics of human knowledge, whether it is sports or geography or science or current events, and the father of watson came to the class at mit to show you a remarkable charge of these little dots at the top of our old vacuum in jeopardy champions. Most of them are pretty good to eat, me 90, 100 of the questions and fairly aggressive as well. When watson first came out come the frontier wasnt very impressive. It couldnt answer questions that well but watson had the capability of the human student and that was the ability to learn in a ferocious rate. They had all of the information from wikipedia and every few months theres another version that performed better and better in a few months after he showed me this charge they went on national tv to the champions of jeopardy and watson won as you may know and its being used in all other applications. There is a call center in south africa that answers questions. There are legal versions in the clouds now and there is a banking version. We worked to create the dodd frank fools to help explain those are the companies that have billions of dollars. There are versions of the medical diagnosis and the symptoms something pretty close to english and it does a remarkably good job of the diagnosis, however obscure it may be. And if he isnt the worlds best medical diagnostician i suspect it will be within five years and it will be available on the cloud and it may be going for the Second Opinion or first opinion to the other related machines. Its creating all of this wealth that that i mentioned and it was a puzzle to me when weve are looking at the staff on the stagnating Median Income and how that could be that we were reminded that look you know there is no economic law that says the technology automatically even if it grows papaya that everybody is going to benefit evenly. The manufacturers on the cars come in or whatever or it could be potentially theoretically the majority of people left behind people who do the routine Information Processing or manual skills. There is nothing in the economics here either says that can happen. And some of the data suggest that we do have various flavors of technical change. In the book we describe three sets of them although there are more. There is the skill by the technical change in the charts but david and my colleagues at mit made but nicely illustrate the fanning out of the change although maybe it is leveled off a little bit towards the end the capital and labor have been getting different shares. The workers have been following the United States and other countries quite precipitously which may be some evidence that machines are not just complementary as they once were. Superstars are getting a bigger and a bigger share and there are a number of reasons but one of them is the nature of technology Digital Technologies are quite different. You can take a process and codify it into the new can digitize it you can take maybe 100 million copies and each of those copies have three very interesting characteristics that can be made at almost zero cost. They are a perfect replica of the original and they can be transmitted anywhere on the planet more or less instantaneously. Three adjectives we didnt used to describe the most goods and services has quickly that they are standard for the Digital Goods and believe to some weird and sometimes wonderful economics that can lead to a lot of bouncing that they can also but they can also leave to the wind or take most markets. If you codify the tax preparation you dont need hundreds of thousands each serving of the local market. A few good tax programs, maybe one or a few can cover a big chunk of the market. It isnt just a few obscure corners of the economy, software is eating the world and is coming to retailing and the finance and manufacturing to the media. So the economics are coming to more and more parts of the economy. Now, ultimately this can have profound effects not just on the bounty but also on the distribution of income. But really its how we use these technologies. Its not from the technology per se but how it interacts in the Technology Skills and institutions and the most important thing to remember is that technology is and always has been a tool and we have more powerful tools than we ever have had before and they have the potential to create enormous wealth. You should see it as a feature that should be good news. I think shame on us not using these amazing tools to create more shared prosperity. So, at the end of the day, ultimately, what is going to determine how we distribute this bounty is our choices and tax policy and education and health and welfare and it doesnt determine the distribution i would like to say two things building onto what my colleague and coauthor talked about. The first is to thank our host for bringing us together this morning. Its fantastic for brookings and the hamilton project to convene the conversation and bring such a room of fantastic participants together for this and i am deeply grateful. In particular i am extremely appreciative of the focus that the hamilton project has. To my eyes a lot of the debate about the trends in the economy its not that its a pointless or misplaced but its missing the important story. We are arguing about the 1 and the 1 of the 1 and that is a valid conversation. I think a much more important one is whats happening at the 50th percentile of the workforce and the 25th percentile of the income earnings. These are the people as weve looked around who are really facing the job and the challenges so the focus on exactly that seems to be the right focus for us to take. The second thing i would like to do is congratulate our host together we bob and roger for bringing together a Diverse Group of people this morning. We have a fantastic partnership but a bit of a problem problem and that we are finishing each others sentences and we see technology under every rock. And so this morning you will hear from people who dont quite look at the world that way and have done really the best work in many areas and they are going to bring a variety of viewpoints and perspectives and stories about what is actually going on in the economy but they will be extremely valuable for us all to listen to. I know that im going to learn a lot and all of our colleagues agree that we are living in the defeat could equally interesting and weird at times and times and we better figure out what is driving these changes so we can figure out. We think that the technology is one of the big letters and i would like to make the point before i turned over to the it over to the panel that its anywhere near accurate then hold onto your hats everybody because we honestly hate seeing nothing yet when it comes to Technological Progress. We heard at this point about hausa price weve been. It keeps appearing to us the objects in the future. I want to tell you three quick stories to make the point. These are things we learn publishing the book in january, 2014. These are things that we work on this year so far. In our conversation so far in 2015, eric and i had the chance to touch an object or talk to an object or about his name would be familiar to you. Essentially you said yesterday i belief that they are about as good as the average human driver then why havent you turned on that mode and made that available to us. Are you worried about the regulators, are you worried about my ability, no that isnt the main factor. Its because we want to make until we are confident that our technologies are ten times better than the average human driver, not just as parody. So then we ask of course when does this happen and he says book i stopped trying to make that prediction because i noticed that he kept going like this. So the driverless car, we have ridden in one version of it. I think that there are different ones coming quickly than we anticipated. The second example i want to give is that the task turns out its almost as long as they have computers honestly 40 or 50 years of progress with unbelievably poor results. How many of us have heard of the asian boardgame. You and i take turns putting white versus black stones and we go back and forth. Its one of these is a lifetime to master kind of games. They trade to understand how to play it well. So of course they focus instead great strategy game that try to Program Computers to be good at it. They have made unbelievably little progress at that for two main reasons. One is that it is too complex. You cant come close to the games before the sun burns itself out. So the force that we have with computers isnt that useful. Then they would say okay why dont we teach the computer is the right strategies for playing this game or program the strategies and beat the best human players that way. The main problem there is when you go after the best human players and how they know what to make i dont know ive done this for 30 years. I understand the pattern it just felt right. They cannot put together the strategy to play the game at a higher level. So understanding the strategy doesnt work. It feels like a little bit of a deadend. And then just this past year, a team of said lets take a different approach with just configure a system and show it a punch of examples of games played at a very high level. We have a Great Library of games played. Lets show the computer a bunch of examples of those games and thats it. We will not try to talk the strategies or point it out to the patterns that are most salient we are just going to show it a bunch and then they showed it high level games in midstream and they said what is the next move here. They are at the point now that system is able to come up with the exact same move as the human expert more than 50 of the time. This is after less than six months worth of work on this problem. So i made a bet on twitter a platform that by the end of 2015 the worlds best player will no longer be a human being. So with a couple examples like that it becomes more and more clear that the future is coming at us more quickly than even the experts have been predicting that the consequences will also come at us more quickly than we were expecting which makes the sessions of today all the more important. Thanks very much. [applause] thank you all for joining us this morning. My name is Melissa Carney and i have the privilege of moderating the first discussion this morning. This panel is going to take the premise laid out for us but thereve been rapid technological advances in particular in the information sector and we are going to ask the question what does that imply for the future of work into the nature of employment in this country in particular and as we try to lay out in the paper there are a wide range of views on the topic and in particular this would be good or bad and this morning we have a really expert had a really expert group to discuss these issues with us. I mean truly i would say it is in a leading mind the leading minds in the world on these very questions. You have their full biographies in your programs so i wont run through them in detail but i will just introduced the panelists this point. To my left is david, professor of economics at mit and one of the late debate commissions leading economists who has contributed more to the trends and market places than anyone. And we have Larry Summers come at the University Professor, emeritus at harvard university, hes also served a number of senior policy positions including secretary of the treasury of the United States and the director of the National Economic council. Our First Nations chief Technology Officer appointed by president barack obama and previously served as the virginia fourth secretary of technology is currently the cofounder and executive director executive director of the analytics and Technology Focused firm. And hes already been introduced and is still the professor at mit school. [laughter] the way we are going to do this is im going to pose a question to each of the panelists and then we will move into a moderated freeflowing discussion and we will leave the final ten minutes for the audience qanda. We will be collecting your questions on the card brought up to the panel. Okay so im going to open up with a question for you. Succumbing youve written extensively about the nuanced relationship between the technology and computers and workers, particularly noting that there are certain things that computers can do that substitute would have been done by humans and others that complement. So in light of your research and the framework that theyve laid out for us how do you see this is shaping out for workers . That is a great question. Im glad the topic is getting the attention that it deserves. At that time they were not taking this issue seriously. There theres a number of remarks i can make and there is a reason for some skepticism about how fast things are actually moving and i think there is a lot of data about dont support the idea that the labor market is changing in the tragic stories, so for example the premium to the Higher Education has plateaued over the last ten years and we see evidence of highly skilled workers are moving into less skilled occupations and productivity isnt growing very rapidly and a lot of the growth we have seen has been involved in the low Education Service occupations so why dont i just say that its easy looking at these examples to see an Inflection Point theres nothing that suggests that theres nothing that suggests we are at an Inflection Point. The second point i want to make is that when we think about how technology interacts with labor markets we think in terms of substitution of labor and that is completely natural to do because technologies are generally made but we have been substituting as long as we have been able to think of ways to do that and that is kind of the first order effect that we can automate transportation populations and information storage retrieval but in general but is not collected is that complement as well. You increase the value of the other. The doctors havent become less value in the medical technology. You can do more diagnosis and that makes them more valuable. Ultimately there are kind of three things that contribute to how an aggregate are doing one activity and if it affects that employment more broadly. One is whether the technology directly substitutes you individually or whether it helps you do one thing and another. The second is how realistic is the demand for the services. So, we could do all the medicine that we did in 1950 in ten minutes a week. It would be healthier if that is the case given the state of medicine at that time but of course as you get better at it people consume more of it and we spend more on health care partly because there are many parts of the Delivery System because the demand for them is quite elastic when they become more productive we dont just get the number of the minimum wage. There are many examples of the productivity increases lead to. We see a lot of the growth work in the Non Technical jobs that required a generic skills and those are hard to automate so let me make my final point. A lot of what matters is how rapidly things change. So if tomorrow amazon introduced a spot and it could clean your house and drag your kids to school and lawn care and good for you and it came on amazon prime so you would have it by monday that would be a dramatic advance advance and we would all buy it, but it would be extremely disruptive because there are lots of people in the cleaning and cooking. However if youre going to have this in 2045 we would be well situated to adjust to that because people would recognize that wasnt the place they wanted to be over the long term of the courier. So it matters how quickly we went there. Its whether we are sorted for the second half and the things that are doubling from the small amount or whether its a very incremental process and this is a technology especially the academic Computer Science is very divided by this if you look at Silicon Valley comes the entrepreneurs believe they will be accomplished immediately. But their view is we are making progress but this is an option four years ago that we were very white away. So we live in very interesting times. We will be visiting those ideas when we have our discussion. Im going to turn to you. So as the nation chief Technology Officer you were tasked with using technology and innovation to further the nations goals of job creation and Health Care Costs protecting the homeland, the tall order. But youve spoken very optimistically about the power of the technology to information on a wide scale. Im curious to hear how your view of what technology has done compared to that as andy and eric laid out and in particular how would you see Technology Impact a variety of sectors including education and health care among others . Security much for the question. I have three general observations. All on this decade. The first starts with my first trip to google in 06 as the virginia secretary of technology. We were trying to open up the Government Data to the Search Engines to make it more accessible. Most people were getting the information through Search Engines not coming to the url and i saw this light emitted for every Search Engine and as it was spinning you get to north korea and its its like the stark observation. By the way many parts of the world have just darkness. If you think about the American Economy, what sectors are on the functional equivalent of that level of darkness, its impacted the sector. Healthcare commander g. Education. They have not necessarily been plugged into the internet. Especially around the data sets that have been constrained by a regulatory policies. You know the medical medical records or not worship on the internet and at the energy isnt on the internet. So, when you look at all of this amazing capability and productivity gains it looks like a quarter of the gdp. In this revolution obviously if the incentives start to change and the data opens up at the same time you might just see an explosion of innovation. We are seeing that now in healthcare. We have made Great Strides opening up how connecting the medical record systems and the more Venture Capital is flowing into this sector and you would have ever imagined not because they are trying to make the traditional system function incrementally better but they are rewording a different system that makes it a wide open to gain for the entrepreneurs into this exciting creating new types of jobs that have never been existed before in the healthcare sector not all of which require a phd in physics. In other words, you can be a relatively lowlevel employee utilizing the technologies to help their needs and so forth. As a category the category number one is we are now opening up these big sectors for the internet age and i think that is going to bode well to ensure the productivity gains. The second again when i was a secretary, the North Carolina virginia border used to be like the worlds hot spots for furniture manufacturing. That was it and weve gone through a series of debates about those jobs are not coming back so how do we build a safety net down there and we give me broadband is the answer and we did everything we could to sort of been proved that border. But Something Interesting happened around this concept of automation. Manufacturing is all of a sudden cheaper because you no longer have to pay the same labor intensity to the manufacturing jobs to the u. S. At a faster rate and the competitive response to china. So ikea opens at a manufacturing plant right in the heart of the border the same place it had been written off for the past and we were being told you have to do Different Things because your life as a furniture person is over all of a sudden because you can actually compete on a more effective system and we are seeing that trend now all across the country. The jobs are coming back. They are not the same labor intensity as they were when they were previously here but thats still in the positive. Then i would say the third observation if i had any is the democratization of the entrepreneurship is the most exciting thing that ive seen because in that same border, there are people that used to have parents and grandparents working on textiles as well. Now they are Building Designs for clothing that can be three d. Printed or transmitted over the internet to the textbook production all over the world and they are creating economic values in the same market because they didnt think of themselves as Silicon Valley on japan orders to not plug and because the democratization of capital information. So im really fired up about the impact that this is going to have over the next decade acknowledging that in certain sectors we will see the challenge. Spec grade. Thank you. We will turn to do. Youve been thinking about and commenting on these issues for a long time. 2013 z. Raise a lot of the issues that we are talking about this morning. Recently there was a sponsor by the center on inclusive prosperity. The goal of the commission being to address rising levels of income inequality and stagnant wages in the middle and bottom of the distribution. So in your thoughts and views on all of this what do you see as the longrun implications for the macroeconomy . Thanks for the chance to be here. I believe the question of what we should do until later. So let me focus on diagnosis and make a confession of ignorance and observation and express a worry. I think it should apply to everybody that speaks in this area. The technology of the huge and pervasive effects whether it is commenting workers and making them much more productive in a happy way but one possibility there is substituting for them and leaving them unemployed because another possibility can be debated but in either of those scenarios, you would expect it to be producing a renaissance of higher productivity. And so we on the one hand are convinced of the pervasiveness and greater pervasiveness of technology in the last few years and on the other hand, the productivity statistics of the last half dozen years were dismal. And any fully satisfactory synthetic view has to reconcile those observations and we havent heard them reconciled which leads me to think that we dont have this all figured out. But it is a big problem to believe command by the way if you believe technology happens with a big lad and its only going to happen in the future thats fine there was the description of unemployment today so that is a major puzzle that hangs over the subject which i just wanted to put out there for discussion. Second observation, i think it is a mistake to think of the economy as homogeneous producing output as we approach these issues. They are through the progress working themselves to irrelevance. Let me give an example. The illumination sector providing light. It actually has had about a ten fold increase in productivity every decade for a century. Each of us want it to be dark at night and so in fact there are more games than there used to be but basically whats happened is that the elimination has become caused by free and where it was a major industry in the 19 hundreds, it is a trivial industry today. We need to recognize that when the sector that has rapid Technological Progress that the world can absorb only so much of it. Is that relevant about the world, here is a fact that continues to astonish me and i can see there are a million measurement problems around it but it is a fact that i was going to say. The way that they compute by definition. Consider the two goods today. Television sets and the university. Instead of using the yeartoyear university i could use a day in the hospital. [laughter] the Consumer Price index for the latter two categories is in the neighborhood of 600. It is six. So there has been a hundred fold change in the relative price of tv sets and the provision of basic education. If they wonder why the government cant afford to do the things they used to do i just gave you a big hint. If people wonder where everybody is going to be working in the future, i just gave you a big hint. If everybody is completely confident we will have the rapid productivity growth in the future, they should be given pause because no matter how much we have in the agricultural or elimination, it doesnt really matter for the aggregate economy and increasingly thats becoming a true that a larger and larger fraction of what it is that we produce. Third when i was an undergraduate of mit in the 1960s there was a whole round of concern. The automation displacement and when i was taught as an undergraduate was basically the people that thought it was were a bunch of idiots and that obviously there would be enough demand and will work itself out and maybe we needed some transition assistance but it was all basically going to be okay. Thats what i was taught and the other people were all a bunch of goofballs. I actually bb that for many years and repeated it. It has occurred to me that when i was being taught that about 6 of demand in the United States between the age of 25 to 54 were not working. And then today, 16 in the United States are not working even when the economies are employed by any definition. And so something very serious has happened with respect to the general availability of quality jobs in our society, and we can debate whether its due to technology or whether it is not due to technology. We cannot debate. We can debate whether it is the cause of dependence or whether it is caused by policies that promote dependence. But i think that it is very hard to be leave that a society in which the fraction of People Choose whatever youre most prime Demographic Group is that should be working for a society in which the fraction of them who are not working is doubling in a generation. The first observation where this is a great point for you to jump in on which is given all of these technological advances really celebrated, why is it that gdp percapita isnt raising more rapidly . Why is it that medium wages are essentially flat and a particular what does that imply about the Impact Technology is having on our Living Standards . We are not seeing it in the numbers. Are we not measuring it appropriately . Thats a great question and it would be good for larry to bring up up and what spurred andy and i to start working in the beginning with bob gordon and tyler talking about the great stagnation and at the same time we were saying seeing Amazing Things and andy touched on a few of them. There are lots more we could talk about that the wonders of technology so it is a big of a paradox there. There are a couple of parts of it that are worth decomposing. The part about median and, i dont see that being such a paradox. I think as i suggested earlier theres no economic the people are going to weekly benefit. It could be a small group left behind or unfortunately a big group so you could have five technical changes that grows the pipe of some people are made worse off than i think thats a fair description at least in my mind and other people disagree about a big part of the story of whats going on and people with certain types of skills are in much demand than they were in the past. In part due to technology and many of the Median Incomes and lots of people have touched on it. The question of overall gdp percapita is more puzzling although you dont see as much of a problem in the great great decoupling shirt there is you do with the median. I think a big part of the angst whether its the tea partier occupy wall street is that median line not the topline. Even their it maybe hasnt been quite as robust as some of us would have expected. Technology has been super and more strong and more potent and more everything than ever before. The question is whether its slowed down. The question is why didnt these new galeforce technologies speed to a great acceleration . Let me address that. Ive spent a lot of time visiting and following these technologies and some of them are a customer relationship. We documented it takes five to seven years for them to draw and during that process theres a huge amount of organizational disruption. You can do this on a casebycase basis or a case study trying to roll these things out. Quite disruptive as they are being rolled out and no creativity gain gain or decrease was being rolled out and we have aggregate data. Ive written some papers on this that show there is a long lag. If you roll that up to an entire supply chain or an entire economy you can imagine these organizational structures which are often about 10 times larger than the technology itself themselves. And they take much longer to rollout. It can be part of these both enormous destruction but also until the complementary pieces are in place you dont get the full creativity benefits. People like paul david have documented documented the go back to no electricity and it took 30 years for significant productivity gains. I think that maybe part of the story. We are in the midst of the Big Organization reorganization of the economy. Yes that is disrupted coming as people see that these people out to be laid off in these other people have to be hired and these other people out to be rescaled nsu were doing that you dont instantly get the full productivity gain but you do get a lot of disruption so that can partly answer larrys question about how you can could have disruption without getting the full payoff. Also id like to take a moment to touch on some of the things that david touched on because they are also very interesting. Partly about the leveling off of skill by technical change, or these college is consistent with what we see in changes in the technology that i showed addressing different parts of the labor market and more broadly i think he raises the right question about complements and substitutes and whats happening happening. If you look oftentimes technologies initially are broadly complementary as many pieces of the system requires humans or other to fill in it if you look at courses the number of courses increase all through the Industrial Revolution up to about 1901. That was the peak force and because whether it saddles our carriages or other things of course there is much more value but then the numbers plummeted once the remaining component force was added was no longer not automatable if that is not too many double negatives. And you can see similar things potentially. Are humans different than horses . Of course we differ in many ways. We have a much broader skill set and we can thank a lot better, mostly. And also once labor started disappearing you could have humans on capital or at least some of them. Humans can vote. Humans can have and other things that if they are not happy with the industry so there arent many things that are potentially different that i dont think theres any necessary inevitability as larry was saying with what people thought in the 60s dont worry it automatically takes care of itself. That is one of the reasons we should have this discussion is to figure out what are the policies to address it . Even in the first Industrial Revolution theres a lot of policy changes that help us navigate that in the way we created shared prosperity or inclusive prosperity. Leary do you want to jump in . Just on the productivity disruption thing, i think its a difficult argument. Lets take retailing. So you can imagine all the spiffy technology so you no longer have to have people behind cash registers and so on. The problem is you wouldnt kind of expect that the people behind the cash registers would get fired before the people who work in the systems got the new systems to work great so the challenge about right now is people see that theres a lot of disappointment that has arctic come from the technology but they dont see the productivity increase. And i understand why it might take years for it all to have an effect. What i have a harder time understanding is how there can be substantial this employment ahead of the effect of the productivity. That is if you thought that it was just impossible putting the systems and so forth than you might think that in the shortrun there would be a big employment boom because you have to keep the old system going. You have to delete your keep your legacy system going and the main guys running around figuring out how to open it Computer System in. So i understand low productivity but i think it is hard to square and its not like i have answer to this puzzle but if you think about it hard i dont think its easy to square low productivity and substantial this employment. I dont think the legs to reorganization story quite does it because you shouldnt be getting the disappointment ahead of the productivity. Is a complicated story and i think i havent totally nailed it yet but another part of the puzzle is there a lot of runs there a lot of runs in the economy as well and if you get the types of people who do their urbanization and the types of people whose demand is following you could have some big changes in where the rents are happening way ahead of the changes in the overall output. So lets deal with the fact that there is this employment and that part we agree on. We also believe we dont want to go the way of the horse. [laughter] i want to talk about policy and im going to pose this to the panel as a twopart question so bear with me. First it seems to me in large part the way this is going to play out for the American Worker is going to depend on how labor supply response in particular two skills. In other words is there a way to imagine that a sufficient number of people in our population will acquire the skills for the talent that is needed to economically prosper in the second machine age and what would it take . Is our Education System broadly defined up to the task of delivering the skills and talent . The second part of my question is what about those workers who simply cant acquire those skills or dont possess those talent . Or even the one to do but there simply arent enough for everyone. So i will admit that i am in part worried about a scenario where a small share of the population demands increasingly high wages and a larger share is relegated to low paying service jobs presumably providing services to the high wage folks. It doesnt make me feel much better that robots are not going to be able to give a good manicure or to the clean houses anytime soon. So is that a reasonable thing to worry about and if so dont we need to really rethink our social contract and dramatically expand our system of wage subsidies and income supports . I might want to take a stab at this starting with the premise that if we apply the same capabilities that you have said may have a positive or negative effect but to unleash them in this particular question of how efficiently are the skills being communicated by employers the Training Programs communicating if you join and what the jobseeker has. To me we are in the dark ages of the quality of that experience. You log onto amazon. Com and there are feedback loops that they have been analyzing to know the probability if im there to shop for a video or for Lawn Equipment or whatever. If you asked the same question of the workforce the sad answer to that is drastically no. We just did a study on the unemployed veteran skills gap in what we tried to do is we read every job posting in the economy and said what are the underlying skills associated with job postings . We then looked at as best we could through open Government Data of the underlying skills of unemployed veterans. We took a spotlight on the commonwealth of virginia and you have hundreds of Technology Companies post jobs from employers and made a commitment to hire veterans and they are going out of their way to want to hire veterans and that they communicate the job in such a manner that it feels like its not really available or attainable to some set of the population. So by doing this sort of skills assessment while we figured out was every single Entry Level Technology job every single one in april 2014 from an employer who made a veteran hiring commitment could have been filled by a tech trainable that it was at that moment in time unemployed in the commonwealth of virginia. Yet neither the employer knew to look for that tech trainable that his background may not have made the initial screen nor did the vet now they could get that tech job because it was not in their suggested career path. There was no recommendation in to say this is a simple and attainable opportunity. So if there is that level of inefficiency and information sharing about sharing of talent and opportunity every one of these New York Times stories how many have the skills to get into a harvard or m. I. T. Dont even know that Financial Aid is the available. They are great for Cyber Security interesting areas. Learning plot learning programs that qualify for funding, workforce investment and the sad reality is these innovations are disconnected. These are the these are the areas where i think there is an opportunity. I agree. I think there is a policy of calls for all but it is very inconclusive. Get full out out of high school and into college. That is not less than half of adults will complete a fouryear degree. Ten years in 30 years i think that we need to think about the skills of allow getting involved in jobs technical positions, many of which require real skill sets. We pushed. We push too many people toward expensive for your degrees which are there are not as efficient as they could be. There are opportunities. The knew middle scale opportunities the foundational credential. A lot of proactive run for investment. Hopefully technology will allow us to do better. Unclear. How fast and how well it will work. The sort of inequality with which people have responded. So you might have thought that the gradient between household and count that has not occurred. It has become much deeper and in College Completion much deeper still. Tha much less likely to be going to school and gainfully employed. The employment rate that message in the tools are somehow not coming together. Let me say a few things the technology stuff. First with Great Respect to come i would engage in a experiment, the policy. Of view. The core problem is that there are not enough jobs. If you helped some people you can help them get the jobs, but then someone else will not get the jobs. Unless you are doing things affecting the demand for jobs your helping people get a finite a finite number of jobs. This is powerfully demonstrated they like that a variety and basically found that in low unemployment areas it worked in a high unemployment areas they held some people at the expense of other people. So base inflation in the United States not 3 percent of the economy where there is any evidence of hyper Wage Inflation to go with shortages. The idea better training the huge shortages. It is an invasion a problem. I am all for trying to do it second, more demand that goes more generally toward the macroEconomic Policy you no its importance of having a telemarketer so that firms have incentive to reach for workers to reach for firms 30 professors is remarkable. And people have been to school 60 percent men or 60 percent women are not unfamiliar having the labor market run type is fundamentally important fundamentally important for generating investment. The 3rd thing that i would say in the same direction care and i agree with him till we cannot think of education as a committee problem. More is good. The idea used to be i thought about this 30 years ago but part of what we get over having more education is that people have equal efforts which was part of what was good. That is great. New opportunities. It is kind of the opposite of the technological changes they are much more skeptical on people who work in office than they are on plumbers. So the whole idea of working with the craft and the Specialized Skill rather than this generic, general manager with liberal arts company is i think, central to the thinking in a rational way. The empowerment of labor in a world where an increasing share and increasing part of the economy generates income that has a kind of in the question of who will share becomes very large. The lesser puzzles come on the one hand we have record flow low Interest Rates expected to be record low for 30 years. On the other hand, we have record high profits. You take the thing record high profit to mean record high return on capitol and will we actually have is low probably the right way to think about that is that there is a lot and what we are calling profit that does not really represent a return to investment and the question of who will get that goes to the minimum wage, goes to the power of unions goes the presence of profitsharing goes to the length of patents and a variety of other Government Policies that can for rent. And when they are received a dose of the question of how progressive it is. That has to be a large part of the picture. And i. And i am concerned that if we allow the idea to take all that all we need to do is train people, then people, then they will be able to get into this in a way that is fundamentally an evasion that we will profound social challenge. The institutes of minimum wage and unions the Bargaining Power of workers. Were facing this conundrum. Technological changes in terms of the imperative of giving workers more Bargaining Power higher minimum wage makes it more compelling and important but at the same time the same technologies make it easier for employers to replace workers to become expensive. How do we thread the needle . That is a challenge. One of the ways that i talk about is not just the minimum ways, the earned income tax credit which is a way of encouraging people to work and sharing the benefits from the economy people were not making high wages and one of the differences is it increases the incentive for people to be working. It is a broadly shared costs as opposed to specifically the employer who comes up the way. I think that you can make a good argument that those employers and entrepreneurs figure out how to fix and should not be the ones to bear the burden of having to raise the income to the people i have a skill demands thought. It is not only encouraging work but it could encourage more people to like. Lets just have some numbers here. Roughly speaking, if we had the same income is distribution the top 1 1 1 percent 1 trillion less today. The bottom 80 percent have 1 trillion. That works out to about 700,000. 11,000 a year for family and the bottom 80 percent, trillion dollars. I dont know what the number is. My guess is the total cost is 50 billion. No one has gotten onto the policy agenda doubling. The. The big command aggressive agenda from the earned income tax credit has decreased by one 3rd of one half. So i am for it i am all for it but we are talking about two and a half percent of the redistribution that is taking place to read you have to be looking for things, and there is no one thing that will do it. My reading of the evidence fairly general reading is that while there may be some unrest the elasticity around the current levels is very low. Perhaps a. Perhaps a good way to make that. Is to observe the real money the real minimum wage is 20 percent below where it was when Ronald Reagan was president. And even he was not complaining that it was doing a lot of damage to employment and productivity. It is tempting to think that everything is tradable. Across international borders, if you say how much is tradable is less than half. There there is a lot of scope for raging ways is an area where there will not be brought competition. Questions from the audience. What is th