Michael Spence, another Nobel prize-winning economist, in a recent article in Foreign Affairs agrees that technology is hitting jobs in America and other rich countries, but argues that globalisation is the more potent factor. Some 98% of the 27m net new jobs created in America between 1990 and 2008 were in the non-tradable sector of the economy, which remains relatively untouched by globalisation, and especially in government and health care—the first of which, at least, seems unlikely to generate many new jobs in the foreseeable future.
You should never say “98% of X” in a context where “150% of X” or “-40% of X” would make sense. Let’s say I run a coffeeshop. My core coffee business just missed breaking even this month, losing $500. On the other hand, the CD rack I put up made $750 in profit, and so did my pastry case, so I came out $1000 ahead for the month.
So CDs accounted for 75% of my profit. Pastry also accounted for 75% of my profit.
See why this is weird?
(Imagine if I’d lost 500 more bucks on coffee — then I’d be making infinity percent of my profit on CDs alone!)
See also: the Wisconsin GOP’s June press release asserting that Wisconsin had accounted for 50% of the country’s job growth in June. Great! Until you realize that California accounted for almost 200% of the country’s job growth…..