The Future of AI and Labor

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Among the biggest supporters of that platform are college graduates who used to lean right politically, but over the last few decades have moved increasingly to the left Today, my colleague Noam Schiber explains the economic forces that have left many college grads deeply indebted, underpaid, and angry, and how their unmet expectations are reshaping class politics in America It's Thursday, june eleventh No To set the stakes of the conversation that we're about to have, can you describe the political transformation of college graduates that you've just written a book about and that you've been reporting on for years now Yeah. so I think we sometimes forget that as recently as the nineteen eighties and nineteen nineties College grads were actually pretty conservative politically. In the nineteen eighties, for example, they tended to vote Republican by double digit margins, at least on the presidential level. They used to favor things like smaller government, lower taxes, fewer regulations. And a lot of this, I think, was driven by the fact that college educated workers tended to see themselves as kind of management adjacent. They tended to expect that their lives would become much more affluent in the future. So this is very consistent with their worldview. If you're an affluent person and you run a business or you're an executive, you tend to want the government to stay out of your way. But if you fast forward a few decades, you really start to get a different And if you look at the most recent election, you see that college grads actually shift really far in the other direction. They end up supporting Kamala Harris over Donald Trump by about a fifteen point margin.. And on the specific economic issues like government and taxes and regulation, they've actually moved much further to the left, much closer to people without a degree they were in the nineteen eighties. And so what explains that? What is driving that transformation There are a number of factors that people point to when trying to explain this. But in my book I focus first and foremost on economics. A lot of people who went to college were really sold on this idea that it would be the key to an upper middle class adulthood. And it turned out that the reality fell far, far short of that, and instead, they were squeezed in a whole variety of ways In that field a sense of grievance and frustration among a lot of college grads with the economic system that exists today What are the economic forces that led to this deep sense of frustration So this starts several decades ago. In nineteen seventy, only about ten percent of Americans had four year college degrees. The vast majority of Americans did not go to college, did not have a degree. But we see that in the eighties and nineties, the number of people going to college really starts to explode NBC News In Deppth tonight America's newew insecurity. good jobs, good wages, a whole way of life disappearing forever. And I think a lot of it has to do with the decline of traditional blue collar jobs. In the first six months of this year alone, America lost two hundred twenty one thousand jobs in manufacturing, and it's getting worse. There was a sense that automation and globalization and the decline of unions was really making it harder for people to make a living if they only had a high school degree. Earlier this year, the Census Bureau reinforced the view that a college degree makes a big difference in lifetime earnings. hundreds of thousands of dollars difference. And the solution in a lot of cases was, well, we should send them to college. I have something to say to every family listening to us tonight Your children cant go on to college. This really becomes a kind of national obsession We can make college as universal in the twenty first century as high school is today Presidents, beginning, especially with Bill Clinton, talk about how people should go to college so that they can compete in the modern global economy. The No Child Le Behind act needs to be reauthorized and strengthened. We see George W. Bush when he pushes his education reform initiative, No Child Le Behind And the reason I bring it up is in order to make sure we've got more children ready for college Emphasizes that we need to prepare people better to go to college. A good education is no longer just a pathway opportunity. It is a prerequisite. And of course, Barack Obama really elevates this as well. We will provide the support necessary for all young Americans to complete college and meet a new goal. By twenty twenty, America will once again have the highest proportion of college graduates in the world That is a goal we can meet That's goal And this change really happens even outside of the political realm too. Even in the public school system in charter schools, we really as a nation, start emphasizing the importance of going to college. G morning soning. What we're doing here at Kip Academy Elementary is preparing our kids not only for academic excellence But for college. One of the largest charter school networks in the country called KIP, E though they are four and five years old right now and in kindergarten, they'll be graduating from college in the year two thousand. It really starts emphasizing in the early nineties that college begins in kindergarten, that everyone must start obsessing about college from the very moment that they enter a classroom and go to heart. Go to college go to college What you're saying is there's essentially a national PR campaign for college No question, everyone from your friends and family members to the president of the United States is telling you that this is an absolute necessity. And so naturally, people start to follow that advice. And by twenty ten, we see that thirty percent of Americans have four year college degrees and it's rising rapidly thirty percent, which is compompared to what? you said ten percent in nineteen seventy. So basically the rate forty years. Yeah. And to meet all that demand, we start to see a whole bunch of new players open their doors or expand their ranks. So we see for profit colleges really start to enter the scene and we have a huge increase in the number of people who are attending for profit universities Another thing that we see is what are known as non compompetitive public universities. so that's like not the University of Texas at Austin, which is obviously a very prestigious public University. or even the University of Texas at Dallas, which is a pretty competitive state university, but something like the University of Texas at Rio Grande Valley, which admits almost everyone who applies to the university And what we've seen is that If you go to the University of Texas at Austin, you tend to do very well. If you go to the University of Texas at Dallas, often it works out pretty well. But for someone who graduates from an essentially open admission public university, it's a much more complicated picture. And it's not at all clear that the cost is worth the benefit to you at a university like that Just to summarize quickly, you have this huge increase in the number of prospective students. As a result, the landscape of education starts to change in order to accommodate them. You get these new colleges, both for profit and these nonc comppetitive ones. And it sounds like those changes, they start to dilute the value of a college degree That's exactly right. I mean, in some ways In the nineteen eighties and nineteen nineties A college degree really was a can't lose asset. We find that the value of these degrees were increasing pretty much in lockstep. Obviously, if you went to Harvard and studied engineering, you might do better than someone who went to their state university and studied art history. But in general, this was an appreciating asset. But by the two thousand and twenty ten s, we see a much more mixed picture, in some cases makes sense for people, but in a lot of other cases, doesn't make that much sense for people. I rise today to give my heartfelt support for the higher Education Amendments of nineteen ninety one And what's happening around the same time, the provisions of this bill vastly expand the amount students may borrow to help them finance their education is that Congress is making it easier for people to borrow to go to college. So Congress raises the limit on student debt in the early nineties and then it raises it again a few times in the kind of two thousand seven to two thousand nine period By passing this bill, we will make a college education possible for hundreds of thousands of additional students over the next five years. And this coincides with a really rapid increase in the debt that people are taking on to go to college. We see it roughly double between the early nineties and twenty twenty, whichich is significant, right Twice the amount of debt is no small matter It's no small matter. and actually we see that when people max out on their own debt, their parents even step in to pick up the difference. So it's even larger than that doubling in some respects Overall, this sounds like a pretty bad situation. You have a generation of people who are being told that college is absolutely necessary being hyped up on the importance of it, who then go to colleges that may not have even existed for very long and then graduating from those schools with loads of debt. That is how they enter the job market That's right. And then the whole thing kind of falls apart around two thousand eight Great recession and financial crisis hits during this time. millions of people lose their jobs or have trouble finding work.. But in a way, this is kind of a uniquely sharp blow to these young college grads. Why? Well, because remember, these were the folks who were probably given the hardest sell about why they need to go to college of any generation in history sky high expectations, they really thought of college as something that you should pretty much do everything you can to attain And yet when they leave college and they enter the job market with this huge amount of debt suddenly, they're scrambling to find jobs that are in line with what they've studied We see the unemployment rate for recent college grads jump to its highest level in decades And if you recall what's going on in two thousand eight and two thousand nine, debt is just this huge problem. We have whole financial institutions that are collapsing under the weight of it. The House passes a sprawling seven hundred billion dollars government rescue of the financial industry. And what happens is that the government intervenes very aggressively to bail out these large financial institutions Bailing out Wall Street is the only way to save main Street So says the president. But for the people who went to college and who did everything that they thought they were supposed to do and are stuck with this debt, that's suddenly weighing them down. You know for us private citizens, nobody's bailing us out, nobody's helping There doesn't appear to be a bailout for them This moment amplifies this sense that there are just two tiers of society in America. There's Wall Street, there's the ultra wealthy and everyone else pointing to a moment in this history where the economic forces we've been discussing start to have very visible political consequences. Yeah, this is a moment where the country really shifts in a kind of populist direction On the right, you had the rise of the Tea Party movement, people who saw the government intervene and bail out the big bangs and really start to turn against government And then on the left, you have this sense that the government is bailing out the fat cats and the Wall Street billionaires are doing great. But the rest of the country is really struggling and the government isn't doing much for them And this really starts to crest with the occupier Wall Street movement in twenty eleven This was a group of folks who start to protest in Zucati Park in New York City, right? after thirty years of having our living standards decreased while the wealthiest one percent have had it better than ever. I think it's time for maybe Itos and participation in our democracy. They really start to identify the one percent as the kind of baitonirs of the country. And it's the other ninety nine percent of Americans who are doing the right thing getting left behind by the economy. You I went to school, a lot of these people went to school and now that we're out for the summer are out completely, there's no jobs. We can't pay their student loans back. and all we keep hearing from the creditors is we're lazy. And it turns out that young college grads are a huge part of this movement. There have been studies showing that about three quarters of the people involved in occupy were college gr Why are other people getting bailed out and I'm stuck with college loans? Why can't I get a job that's actually fulfilling that I like to do? And they actually end up elevating student debt and student loans as a major concern of the Occupy movement And this is a moment where you start to hear a whole variety of populist chants that are probably familiar to a lot of people There's just a whole new vocabulary that we hadn't really seen when it came to economic issues before Yeah, I graduated college in twenty eleven and remember Occupy so well. It was this thing that really activated college graduates politically, not just in New York, but all across the country. There were occupy style protests I remember in many cities. and it felt as though this was the critical juncture at which The rage that had been bubbling over inequality, it became more of a solidified political identity. I think that's right. And I think this is a moment where you have a real shift in their consciousness. So instead of seeing themselves as the people who are either at the top or who are gonna to be at the top pretty soon, they start to identify with everyone else. They start to identify with people who have been exploited by the people at the top And of course, the occupy movement eventually fizzles out. People leave Zugati Park and they go back to their homes and their jobs. This turns out to be the opening act of a pretty dramatic shift that will play out across the next fifteen years. It's the beginning of this realignment in American politics that really changes the way people who went to college thought about where their allegiances lie I'll be right back Mortgage refinancing might sound SFi makes it easier. With refinancing options designed to fit your goals, you can explore lowering your mortgage rate, accessing cash from your home's equity with your cash out refi, or shortening your loan term. Whatever your next move, SFi can help you find the right fit. 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We have this thing called scarring, which shows that if you graduate into a recession, your earnings can be impacted for ten, fifteen years later And then there's this other big force that's happening out there in the job market that's really reinforcing all the things that young college grads are experiencing. And that's the consolidation across a whole bunch of different industries in tech, in retail, healthcare. We're seeing companies get bigger and bigger. Can you just slow down and explain what you mean by consolidation Yeah. so in a lot of cases, you see companies merging together one company buys another company that it competes with in some way If you think back to the early twenty thousand ten s, for example, you have Facebook buying Instagram or WhatsApp. And maybe that could be a good thing for consumers. Maybe Facebook invests a lot of money in building out infrastructure and new features that consumers really like. But for workers, that can really reduce the options that you have about where to work And it can actually also be really frustrating and alienating. Like if you think of a computer programmer, maybe they were at a smaller startup and they felt like they had a real impact on the development of the product or even a role in the mission of the company, But then suddenly they're working for this giant company. It's much more bureaucratic, It makes people feel like they just have a lot less agency in what they're doing You're saying consolidation sometimes leaves workers worse off because as a worker, you now have fewer options and less power That's right. And one of the best places to see this is actually the healthcare industry, where consolidation really starts to ramp up in the twenty ten s. Why what happened The healthcare industry had been consolidating for a few decades. but if you remember, one of the big priorities of the Obama administration when it came to power in two thousand nine, was to make the health carere industry a lot more efficient And they did that through big initiatives like Obamacare and through a series of regulations that really accelerated consolidation in the industry And there's actually kind of an irony here because on one level, Obamacare was a more populist economic policy. It really expands health carere coverage to millions of Americans who didn't have it. But on the other hand, it kind of makes healthcare an industry that's worse for the people who are working in it How do you mean One of the wrinkles of Obamacare and these regulations is that they actually foisted more risk onto individual hospitals and health care systems. So for example, if patients got a procedure and didn't do that well after the procedure, the government might not reimburse the hospitals as much as they were expecting. And so the hospitals decide that the way to protect themselves against this risk is to get bigger and bigger. You If you're a small hospital and suddenly the administration isn't reimbursing you as much as you thought for different procedures because your patients aren't doing as well as you'd hoped, that can really hurt you financially. But if you operate dozens and dozens of hospitals, you're much more insulated against that risk Makes sense. And what happened when these healthcare systems got really big is they started buying up more and more hospitals in different cities and states And that actually created fewer places for people to work. And this kind of had two effects. First, if you were a nurse or a pharmacist or someone who worked in the back office of a hospital, that really could have an impact on your wages because you had fewer potential employers bidding up the price of your labor. Right. And then there was a second set of employees like doctors. And these folks generally didn't see their wages go down But they were still affected in other ways that made them really hate this new arrangement of working for bigger and bigger health carere systems. So for example, I first covered a group of doctors who were unionizing at a big healthcare system in Oregon in twenty fifteen. And one thing that I heard from them over and over again is we feel like cogs in some giant medical industrial complex. We might as well be factory workers. They're governed by MBAs and bean counters who are suddenly telling them How much time they can spend with their patients, how long they can keep patients in the hospital. What they have to ask them when they talk to them. And these are people who've often trained for years and years.. The thing that they pride themselves on is their professional judgment, the ability to evaluate the situation, to apply the best treatment, and suddenly, they feel like they're being micromanaged by people who have no medical expertise to speak of. So it's incredibly alienating Yeah, I mean, it sounds like you basically have The most educated people in society, almost doctors, starting to feel more like laborers. They don't have that control, they don't have the stature that they thought they were getting when they got that MD Yeah. And what you start to see is that a lot of highly trained white collar workers who at one point had thought of themselves as management adjacent, they start to, in a lot of cases, identify as just kind of rank and file employees who were bossed around by management And then today I am proud to announce my candidacy for Pident of the United States I no It's at this point in twenty sixteen that all these grievances start to coalesce into a mainstream political figure And that figure, at least on the left, is Bernie Sanders. The issue of wealth and income inequality is the great moral issue of our time It is the great economic issue of our time. It is the great political issue of our time and we will address it. Sanders, the independent senator from Vermont, comes along and sort of enters the stage talking about the ninety nine percent versus the one percent and how the bosses and the billionaires are dominating the political system in ways that are not align with the interests of ordinary workers. It is insane. It is counterproductive. best interest of our country Hundreds of thousands of bright young people cannot afford to go to college and that millions of others leave school with a mountain of debt that burdens them for decades. And in ways that might not have been imaginable a few decades earlier, a lot of college grads and especially younger college grads really start to identify with that language So the rise of Bernie Sanders and his political appeal within this class of highly educated people that you've been looking at, that is a manifestation of the shift that you've been talking about. It seems as though Bernie both reflects this growing left wing populism among college grads, He also may be driving it just like occupied it, helping to solidify that identity I think that's right. Of course, we all know that Hillary Clinton goes on to win the Democratic presidential nomination But you see Sanders really outperform with young people and especially with young college graduates Overall, he loses to Hillary Clinton by a small margin among college grads. but among young college grads, college grads under thirty, he crushes her by a two to one margin And more broadly, what you see Sanders doing is really giving voice to the sense of grievance on the national political stage, the sense that the economy just isn't working for them iz and make sure that country gets a living wage and health care It's not too long after Bernie that we see Alexandria Occasio Cortez win a congressional seat in New York City. Y. And it was literally easier for me to become the youngest woman in American history elected to Congress than it is to pay off my student loan debt. And she's very much of this demographic and supported by this demographic. The Red Socialist flag is held proudly as the Democratic Socialists of America or DSA are going door to door. We see a huge increase in the number of young college grads who are joining the Democratic Socialists of America, which goes from about five thousand members in the United States before twenty sixteen to nearly one hundred thousand members by the end of the decade, a majority of them young college educated people. We didn't grow up sort of with the red scare, and so the word doesn't scare us as much. We see support for socialism really rise among college educated folks and especially young college educated folks, basically doubling support between twenty ten and twenty twenty from about twenty percent to about forty percent. And of course, last year in New York City as we can remember The working people of New York have been told By the wealthy and the well connected, that power does not belong in their hands. We saw Zoran and Mam Dani run away with the mayor's race with a huge burst of support from young college grads. If you look at college grads under thirty in New York City, eighty four percent of them supported Zor and Mam Dani. I am young despite my best efforts to grow older I'm Muslim I' a deemocratic socialist. Most damning of all, I refuse to apologize for any of this And so what we really see is the long tale of all this economic upheaval that college grads have been dealing with for decades come to fruition at this moment and create all this momentum behind candidates in ideas that would have almost been unthinkable before the financial crisis and Great recession Okay, No at the beginning of this conversation, you said economic forces weren't the only thing driving this populism on the left among this cohort. So can we turn to some of the other forces for a minute, ideological, cultural? One theory that I've seen, which I know you've also engaged with for why America's college educated population has moved to the left is that Demographics of this group have just fundamentally changed. This is an argument that Eric Levitz, a Vox made in his review of your book. He says, increasingly, the population of college grads is more female and less white. And because women and non white voters tend to be more progressive in their views, that's why we're seeing this leftward shift What do you make of that argument There's definitely something to this. We've seen more women and more people of color get college degrees, and we know historically, they tend to be more liberal than white people and men. But actually if you only look at white male college grads during this period, you also see them move pretty sharply to the left too. So it's not just a matter of the changing demographics same profile of person is actually moving to the left Given that Possible that it's the college education itself that's helping drive students to the left? We know that colleges as institutions have been moving to the left in recent years. It seems plausible that has an effect on how students' political identities are shaped I think that's a really fair point. We know from a lot of data, including a recent report by Yale University, that the ideological composition of faculty members has really shifted over the past generation or two. So in the late eighties, less than half of faculty members identified as liberal. And a generation later in the mid twenty ten s, it was well over half, around sixty percent And if you look at the partisan composition, these days, Democrats tend to outnumber Republicans among college faculty members by about ten to one, which is an incredibly stark difference. So I think there's something going on there. It's probably not the whole story, though Okay, gotot it There's another thing that I've been thinking about, Noem which is Couldn't college graduates be moving to the left on economic issues not actually purely because of their economic circumstances, but rather because they're identifying with the left on a range of issues that really matter to them. things like abortion or race politics. and then once they're in that tribe, they're also adopting the economic platform. I do think there's some truth to that. If you look at research on when college grads started moving to the left, it does start to happen around two thousand four, a few years before the Great Recession. But you actually see a much, much sharper movement to the left after the Great Recession. So I think the most intuitive reading of the research is that there was some kind of cultural politics that was pushing college grads to the left, but that the real shift happens after the bottom falls out of the economy in two thousand eight It's just hard to overstate how destabilizing the Great Recession was for American politics. It's also just worth acknowledging that even if a college grad may feel more like the working class economically speaking, They aren't, ironically voting more like working class people who didn't go to college in America because those people have actually moved to the right. Most of them voted for Trump in the past three presidential elections. Of course, in those elections, Democrats didn't put forward an economic populace to contend with Trump when faced with the options they had The working class chose the Republican in the race It is absolutely the case that since about twenty twelve, we've seen this so called diploma divide open up where college grads tend to vote for the Democrat and people without a degree tend to vote for the Republican. That gap has gotten larger since then. But one thing that you have to keep in mind is that actually on economic issues, on whether you want to tax the rich or whether you support unions, or if you think the government should have a big role in health carere or in regulating other industries People who graduated from college and people who didn't have actually been moving closer and closer together over the past twenty years. What we really see is that these elections just haven't been fought on those issues. They've largely been fought on cultural issues, issues like diversity or LGBTQ rights, or immigration and race. And on those issues, you tend to see this big divide between college grads and nongrads. What's interesting is that even on this subset of issues, college grads and nongrads are not living in two completely different universes. So we saw that during the Biden years, for example College grads actually moved closer to nongrads on immigration. They became much more skeptical of immigration, much more restrictionist, and their voting preferences really started to come closer to people without a degree. We saw something similar with crime where in the twenty ten s, people with degrees were not very concerned about crime While people with degrees were very concerned, but by the twenty twenty four election, they had moved much more closely toward where people without a degree were. So even on these so called cultural issues, these noneconomic issues, we've actually seen some convergence that suggests that these two groups of people don't have so little in common that they can't even talk to one another just to raise something that we haven't discussed yet. I want to ask about AI, which is an economic force that we haven't yet seen fully play out which I could imagine would also have an impact and perhaps is already having an impact on college educated people, especially recent grads and their political identity The AI revolution may ultimately hurt college grads more than the working class. So How do you think about this massive technological shift and its potential effect on the political realignment that you've studied Yeah, I really think it's going to add to this sense that college grads are workers just like people without a degree who are at the mercy of executives and big powerful companies. I think one thing that we're seeing with AI is that it's spreading that sense of powerlessness to a whole variety of white collar workers that hadn't really been affected by this before. So whether you're talking about lawyers or people in banking in finance or consulting or marketing or sales, suddenly all these folks are now having to contend with AI and with the leverage that that gives their employers And with the lack of leverage that they suddenly have in their own jobs when they can see that a machine can do their work almost as well, if not better than they can. And what are the political consequences of that I think it's a little hard to say what the political consequences are going to be over the next five or ten years. But one thing that I can say with certainty is that I've really seen in my own reporting how radicalizing the shift can be. I report a lot on tech workers and their relationship to their companies and their bosses. And just over the past few years, amid the rise of AI I've just seen this incredible anger kind of ricocheting across the internet and in channels where they typically congregate. It used to be that these folks really thought that their companies had their best interest at heart. They thought that they had good relationships with their bosses, they wanted to be their bosses. And as these big tech companies have laid people off and have cited All the ways that AI is changing their jobs and how many workers they need. These folks, they're really lashing out in ways that I've never seen. And I think that's only going to be exacerbated as we see these companies worth hundreds of billions or even trillions of dollars go public in a way that's really accruing to just a small portion of very affluent, very rich owners and founders of these companies and leaving behind tens of thousands of people who've been laid off just in the last year or two amid the rise of AI. So we don't know when exactly this will have a political effect or how large that political effect will be. But I think we can say that this dividing line between the one percent and the ninety nine percent is as stark as it's ever been. And I would guess that it's only going to get starker going forward Well know Thank you so much Thanks for having me.