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Narayana Kocherlakota of the Minneapolis Federal Reserve Bank calculates that if we had a normal match between the skills workers possess and the skills employers require, then the unemployment rate would be 6.5 percent, not 9.6 percent.
As lower-skill jobs are swept away by technology, economists are wondering what kinds of skills workers will need — and how the economic benefits of automation will be distributed.
These trends likely mean first, that college access is shrinking overall, and second, postsecondary education is able to meet less and less of marketable skills workers and the economy demands.
One extraordinary study of Swedish workers, for instance, found that there was a strong correlation between time out of work and declining skills: workers who had been out of work for a year saw their relative ability to do something as simple as process and use printed information drop by five percentile points.
In the wake of the 2008 financial crisis, there was a lively debate among policy makers and academics about whether a similar gap "between the skills workers have and the skills businesses say they need" contributed to the increase in unemployment.
It suggests that, among other things, the nation should invest in machine learning skills, workers whose jobs may be automated should be retrained, algorithms should be built so they don't contain bias, and anyone using AI should do so with transparency.
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Other proposals include more visas for low skill workers and an end to quotas for a higher-skilled workers – a measure pushed by the technology industry.
High-skill workers select into expensive cities.
High-skill workers add $600K of value to banks, while low-skill workers add $300K.
Consequently, the regulatory agency "prefers" to hire low-skill workers.
Competition among banks will bid up compensation to $600K for high-skill workers and $300K for low-skill workers.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com