Get into them and the whole problem will go away. I think that is fundamentally an evasion of a profound social challenge. Raise the issue of the minimum wage and unions and Bargaining Power of workers, but it strikes me were faced with a conund rum in a sense these changes make the imperative of giving workers more sort of Bargaining Power and a higher minimum wage make that more compelling and important but at the same time those same technologies make it easier for employers to replace workers who become too expensive with machines, so how do we thread that needle . Well, i think that is a real challenge and one of the ways i think a lot of us have talked about, not just the minimum wage, but the earned income tax credit which is a way of encouraging people to work and sharing some of the benefits from the economy to people who are are working and maybe not making very high wages. Through the tax code, not the employer, employee relationship. One of the differences is that while it increases the incentive for people working and helps with Income Distribution, its a broadly shared cost that lots of people bear as opposed to the employer who comes up with a way of employing that person and it, i think that you can make a good argument that those employers, those entrepreneurs, who fickgure yur out how to put those people to work shouldnt be the only ones to bear the burden of having to raise the incomes of people who are having their skill demands fall. A way of sharing that more broadly. The net effect is not only encouraging more people to work it could actually encourage more people to look for creating those kinds of jobs. Lets just have some numbers here. Just to put this in perspective. Roughly speaking if we had the same Income Distribution in the United States that we did in 1979 the top 1 would have 1 trillion less today and the bottom 80 would have 1 trillion more. And that works out to about 700,000 a family for the top 1 . Works out to about 11,000 a year for a family in the bottom 70 . Thats a trillion dollars. I dont know what the number is. My guess is that the total cost of the earped income tax credit is 50 billion. Nobodys got on the policy agenda doubling earned income tax credit and the big, aggressive agendas for the earned income tax credit are probably to increase it by a third or a half. So were talking about, im for it. Im all for it, but we are talking about 2. 5 of the redistribution that has taken place and so you have to be looking for things and theres no one thing that is going to do it. My reading of the evidence, its a fairly general evidence, is that while there may be some elasticity elasticity, the elasticity around the current level of the minimum wage is very low. Perhaps a good way to make that point is to observe that the real minimum wage in the United States today is about 20 below where it was when reagan was president and even reagan when he was president , wasnt really complaining that the then existing minimum wage was doing a lot of damage to employment. And productivity has gone up since that time. Its tempting to think everythings trainable but if you ask not across International Borders between the United States and other countries, if you take the boston smsa how much does it say gdp is tradeable, its less than half. And so, theres a lot of scope for raising wages in areas where there isnt going to be some broad kind of competition. Good. So, we have some questions from the audience and im going to ask one that relates directly to that last point. So, the question is what is the role of trade on technology and vice versa . How does this relate to the relative skills of people in Different Countries . Actually, this is what i wanted to bring up. A lot of the disruption that people attribute to technological change over the last 15 20 years has had a great deal to do with change from International Trade and the you know especially succession of china to the wto in 2001. See, everybodys surprise led to an enormous surge in the u. S. And a very sharm decline had large pillovers to surrounding communities. David and Gordon Hansen and brandon price really documents weve all been surprised by how big a factor that really is. And fortunately, were much closer to e quul librium now. I think this kind of disruptive power is underappreciated and its been significant. I think we often find an effect and look for a cause and sometimes, we get it wrong. We thought the internet economy was a tremendous thing from about 1995 to 19 9. I dont see how it became a disaster in 2000. The other thing i would say is i do think that were you know, we could not in miy opinion restore unions to 40 years ago without substantial, competitive effects because we face we dont have the kind of rents the kind of market power. German companies are outsourcing a lot of their employment to eastern europe. So, i think that is a real constraint. Globalization and the technology have brought more human beings out of poverty in the last 20 years than any time in world history. As a percentage. As we look at whats happening in china, india, and a lot of things we view as threatening are creating much broader prosperity. Same time, they create bigger concern. When i think about machines substituting labor i worry more about indian textile workers than the general employment patterns of the u. S. If im thinking about this, i think about a world where you know poor people in kenya have solar cells, but theres not job for which their skills are scarce. But i think we should be thinking about technology and globalization as working hand in hand at this point and the view in the 1980s, early 90s, that trade was irrelevant is quite out of date. And still has not fully permeating the consciousness of how people thought about this. I want to agree in part and disagree. In part. I think first, its right to say that trade and technology in a sense are strongly associated with each other. We wouldnt have much more trade, but for the much greater ease of communicating and transporting acrosscountries but for the technology that represented the containership and a great deal else, so what we call trade and the great increases in trade are very much tied up with technology. First thing. Second, i would agree, but respectfully disagree with david on one aspect. I agree with david and certainly, my thinking would have e involved over the last 20 years, on the question of how much has changing trade patterns impacted the u. S. Labor market . I think there is pretty clear evidence there have been significant impacts. I think some exaggerate them, but i think there have been significant impacts. I think it is a quite different statement to assert that all of that is due to trade agreements. And i think one has to look carefully for example at the counterfactual. David asserted that since chinas succession into the wto, well, what is the counter counterfactual . I have some familiarity with the level of u. S. Tariffs on china prior to the succession and they were not high. And so, the main reason why china is exporting more to the United States is that chinas producing six times as much as it was in 1999 and producing in much more technologically sophisticated ways. Now, the its true that if they had not been in the wto, conceivably, we could have passed a new set of protectionist measures, but i think if you ask the question if the United States had maintained its trade policies visa vi china, as they stood before china was admitted into the wto, what fraction of the increase in chinese exports to the United States would we have observed. I think the answer is the vast majority of that increase. And i think thats very important. Because i think theres a tendency to suppose that if trade developments impact the wage distribution importantly in the United States, then presumpltively trade agreements are a bad idea and i think that in order to analyze any given trade agreement one has to ask the question, how much are barriers being changed in the United States and how much are barriers being changed in the affected country and my reading of the evidence is that in many of the cases because rightly or wrongly, the United States market is already substantially open. If you look at the proposed trade agreements, the reduction in barriers and the consequent increase in exports to other countries looms quite large. Relative to any impact in the United States, so i just think thats an important qualification on the globalization story. Im going to ask a different one that takes things in a bit of a different direction. So, someone asks from the end of the 19th century, technology let the workweek decline. Why cant that process continue with the benefit of technology being a shorter workweek with no loss of income. And im going to add a bit of a maybe exist enshl question. So all of this technology really changes our view of the good life and how we think about our time. And the story about the expert craft furniture maker who now put together ready to assemble products for ikea, maybe this is too nostalgic for an economist but something seems lost in that to me. Eric, im going to open this to you. This must be something youve thought a lot about. This is a great question and those who havent read the great article, he talked about made preductions about what happened to our generation, he was more or less spot on in terms of gdp per capita. He extrapolated those funds exactly right and got that right and he inferred that he looked around people who were that wealthy and inferred people wouldnt want to work a lot. They would go fox hunting, but there wasnt much else to do without wealth. He got that wrong. People are not working 10 to 15 hours a week. Mostly those who are working are working a lot more than that. There are r a number of reasons for that. Part of it is we have a lot more we can spend our money on now. Lots of new goods that people enjoy. Part of it is to sociology. A lot of people enjoy working. Theres a meaning that it gives to life for a lot of people. Bob putnam described what happened when work leaves a community and its really sad to see how all sorts of other social indicators plumet because of being wrapped up in a job and work. I think certainly, we couldnt. Theres a trend in that direction, not as rapid at kanes, but we have to start thinking about new ways, how we get get meaning in life and i dont think theres an insurmountable b problem. Wed have to have enough productivity growth to make that work. Uncertain what i think about this. If you look at an introductory economics textbook from the 60s or 70s, in about chapter 5, theres also a discussion of something called the backward bending labor supply curve and the idea is that the as your wages go up, at first, you work more and more because its attractive to work, then after a while, you have enough income and when you have enough income, you take a bunch of it in leisure, so the labor supply curve looks like this. That idea is largely not there. And the reason is that it used to kind of be true. The high wage people work less hours than low wage people. Their image of the 1930s was that the ceo sort of went out to play golf at 4 00 and the workers worked 60 hours a week. And if you look today, for the first time basically in economic history, people who have higher wages, on average very consistently, are choosing to work more or are finding themselves working more hours than people who have low wages and its in part its not all because of the people who have low wages are not able to get more work. There is choices that people are working more hours. And thats why this idea of a more leisurely nirvana is less in fashion. That said, i must say i have to be impressed that americans work about 50 more hours in a year than northern europeans. Im not sure that i would want to call that a great virtue of american society, but i think we have to think carefully about what the alternative to work is and how meaning and community are found in the absence of work. Classical economics has this simple view, which is working is bad, leisure is good. Those who spent time in Community Communities with 20 unemployment i dont think find that a riveting formulation of human motivation and desire, so i think its something that needs to be thought about a great deal and i guess the thought i have without knowing where to go with it is it sure seems like in our society, whether it is taking care of the young or taking care of the old or repairing a lock that needs to be repaired, there is a huge amount of very valuable work that needs to be done. Its much less clear to use a modern phrase that theres a viable Business Model for getting it done and i guess the reason why i think theres going to need to be a lot of reflection on the role of government Going Forward is that if im right that theres mightily important work to be done for which theres no standard Business Model that will get it done, that suggests Important Roles for Public Policy. Theres actually some activist work that make it with a business return on investment the social good. So addressing Climate Change feels like a big priority for all of us to do something about and the Fastest Growing job in america, energy job solar panel insulation. Now, you made earlier comment about trade and technology. Partially this is because the cost of importing solar panels is low. This is interesting. If you benchmarked germany fwens against the u. S. On the cost to install solar panel in a world where youve got globally competitive prices for importing these technologies what explains it is something called the soft cost of sewolar insulation. The lack of automation in something as simple as permitting the ability for a home or business to put solar panels on the roofs so if we took this powerful concept of Information Technology and innovation and if we had the u bik wiitous same day permitting process and more efficient Financial Markets for credit in order to finance these things, it will have much more readily Available Services so folks who want the solar panels could get them more rapidly. If all of those technologies could be put to work that way, we would reduce this billion dollar hidden tax on the American Solar panel economy, which is already the Fastest Growing energy job in america so youd create more jobs on the backs of what is essentially a low cost trade import. You would address issues important to the world like Climate Change. And whats getting in the way . The lack of the adoption of these innovation, these capabilities in of all places, the Mayors Office or the government. Can you do sameday solar permitting in new york city . You cannot. But you can in certain parts of california where theyre making an emphasis here, so, my only comment about theres too much work to do to have a leisure question, but if youre worried as larry said, theres work to be done, but no return, we can make it profitable. There should be many, Many Companies organizing labor to put solar panels in. If we could decost the process, that would grow the market, create jobs and not all of those jobs requires a pafdh. D. In physics. I think theres a role in government to create market opportunity. We will be having another project event on march 11th focused on removing frictions with the goal of increasing jobs, so hopefully youll all join us for that, but in the meantime, please join me in thanking our panelists. Well have a tenminute break. At the National Press club in washington, hosting a conference looking at the future of work in the age of machines. Theyll come back in about ten minutes, focusing on innovation, the importance of innovation in business and in work. And while they take take this break, ten minutes here, we will show you some of the comments from the opening this morning with treasury secretary robert rubin, former secretary and others in the morning panel. Okay, i think well get underway. Good morning. Im bob reuben. And on behalf of my colleagues at the hamilton project, i welcome you to todays discussion of the future of work in the machine age. Before i lay out some of the issues well be discussing, let me say a few words about the hamilton project. We started about nine years ago. We are not an institution but rather, we are partnerships, Small Partnership of policy experts, former Government Official academics and Business Leaders organized as an Advisory Counsel and our architecture is open. When we have policy proposals, they are commissioned from leading experts then Peer Reviewed rather than coming in internal staff. Our purpose is to support policy development and support serious purposes about policy, discussion, debate and dialogue. We believe that that is particularly important at this time when unfortunately, the Public Policy debate in the United States has become so affected by politics, by ideology and by opinion thats not grounded in facts or an objective analysis. The hamilton project works in project with brookings institution. They contribute enormously to our int lek yul vital thety. Since launching the project, our view has been the objectives of the policy has been growth. Broadbased participation and economic security. We believe these objectives can be mutually reenforcing. For example, widespread income gains promote growth by increasing demand, by increasing the ability of workers to access education, nutrition housing and s