The recovery from the crisis of 2008 has been one of the weakest on record, but never in postwar history has so little growth created so many jobs. The unemployment rate in the developed world is down to 5.5 percent and approaching a 40-year low. This flies in the face of all the dire warnings about a “jobless future.”
The pessimist’s basic mistake is to focus too much on what is lost to competition and technology, and too little on what is gained. Over the past 25 years, as McKinsey & Company, the consulting firm, has pointed out, about a third of the new jobs created in the United States were types that did not exist or barely existed 25 years ago.
In the natural world, matter is neither created nor destroyed, but things are transformed. The same is true in the economic world. When new technology destroys, it leaves behind a layer of ash in which new jobs grow.
In New York City the car replaced the horse carriage within the first 15 years of the 20th century, killing off the carriage trade and giving birth to the taxi trade — as well as to highly paid auto mechanics. Uber threatens the taxi trade, and the self-driving car threatens the Uber driver. But it has also brought multimillion-dollar signing bonuses for self-driving-car engineers and created new opportunities for mechanics. People tend to find a way to work with and profit from new technology.
