“Economists call the phenomenon “skill-biased technical change.” The spoils of growth go to those few people with skills and luck and who are best positioned to take advantage of new technology,” Wall street Journal.(P.8) The whole high tech phenomenon it’s not a phenomenon that is entirely tide to economics. However, we can predict where it might go, and try to explain what will might happen. Here is what’s happening, we are in a time where technology booming each year gets getting bigger and bigger. Each decade that goes by inventions in society change taste of consumers, demand, and supply in society. There is a need for highly skilled workers that grows every time a new high tech innovation is invented. This demand will not decrease it would go the opposite way and it will increase. For example, when Facebook purchased Instagram there were only 13 workers in the company. Also, when Whats App was purchased it had 55 employees and was worth 19 US billion dollars. This gives us an example of how the technology sector is moving towards a highly skilled labor sector.
Other than assembling parts for technology equipment there is not much labor needed in the development of new technologies. That’s why big companies go overseas and employ cheap labor.
The problem is that economist didn’t predict how this would affect the economy. US is losing battle ground on the assembling factories sector. For instance, until 2013 apple started assembling Mac Book pros in Texas. It is not profitable for technology manufacturing companies to be assembling in the US anymore.
This is not like the automobile booming back in the 20th century where you had large chains of workers assembling cars. The highly skilled labor demand is simply an effect of technology advancing forward. Every time it grows demand for highly skilled workers will increase, and regular labor will shrink as more robots are added to assembly lines in factories. We are in the time where innovation and creativity will get you a place in the technology market. One of the best examples this is a true fact is Uber.
Now, production is what is hurting the US economy by employing oversees thanks to the many regulations and taxes government have over big companies. If they want to bring back companies to manufacture in the US. The US Government should work with all the companies to incentive them to stay and make it sustainable enough to manufacture within the US borders. Will the US government incentive the investment of assembling technology equipment factories or will it keep putting taxing leverage and regulations over companies? It is time for a change in the economy towards a less regulated market and reduce government control over technological innovations to bring jobs back to the USA.
Kennesaw State University Student