Please check out my long-read chat with economist Carl Benedikt Frey’s new book, “The Technology Trap: Capital, Labor and Power in the Age of Automation.” During that conversation, Frey addressed a question that has frequently been posed to me. Our exchange:

Pethokoukis: So what is the alternative for the 55 year old
person who’s automated out of a job? Do we just say, “Well, guess what? You
have no right for the rest of your life to a $90,000 a year job. Maybe you only
have a right to a $55,000 a year job. That’s just the way it is — maybe we’ll
give you some wage insurance.” Is that really the only option? Because it
doesn’t sound like he’s going to become a software coder.

Frey; No, I think
that’s right. But I think there are certain things that can be done, at least,
to reduce the barriers between jobs and geographies. Special occupational
licenses are frequently mentioned — I think it’s ridiculous that you need to
take two exams to become a hair shampooer in the state of Tennessee. If you
then want to move across states, you might need another new license because they haven’t harmonized across space.

Similarly, moving between
places is made harder by the fact that more people own their homes. I don’t
think there is a particularly good reason why we should encourage home
ownership.

Secondly, if you look at
the places where most new jobs are emerging, they are primarily emerging in
cities with skilled populations. You see that house prices have risen very
significantly in those places, but housing supplies failed to keep pace. And we
have a lot of zoning restrictions that are responsible for that which could be
abolished.

Thirdly, one example that
is close to my heart because it’s close to where I grew up in Sweden: Malmӧ was
a city that was in trouble for a long time after its shipyard closed down in
the early 1990s. And the revival essentially came with the construction of the
bridge to Copenhagen, which allowed people in Malmӧ – a city in decline – to
tap into the booming labor market in Copenhagen. Most of the people would
commute back to Malmӧ and live there because housing was cheap. Most of them
would spend their money locally, where they lived, which gave a boost to the
local service economy.

I think a lot can be done in terms of actually connecting declining regions and cities with expanding ones.

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