Former New York City Mayor Michael Bloomberg spoke at the opening of the Investment Company Institute's general membership meeting Wednesday in Washington and dispensed advice on how to fix the economy.
“The problem is that 40% of all jobs could be automated,” Mr. Bloomberg said. One solution may be governmental: In New Jersey, for example, it's illegal for individuals to pump their own gas, which helps create jobs.
He also said automation is why wages haven't risen when productivity has.
“It requires less skill to use technology,” Mr. Bloomberg said, noting that in the old days, you used to have skills or become an apprentice to learn a trade. “Today, you don't need that skill. You hit a button and if it's the wrong button, it beeps, and if not, it starts. If the skills required to use technology haven't grown or declines, more people can do it and you'd still have more productivity. Today, more people are working with their minds than their muscles.”
That's fine for corporations, Mr. Bloomberg said, but from a public policy point of view, more may be needed. “If you're a middle American and have been working for 20 years in a factory, the likelihood of getting another job with comparable pay is virtually zero,” he said. The result: The suicide rate for white, college-educated women is “off the charts.” The heroin use rate for high-school educated men is soaring. “That's the people who are panicking,” he added.
Add on top of that are the societal changes, such as casual sex, out-of-wedlock births and same-sex marriage. “People don't know how to deal with this,” Mr. Bloomberg said.
Some policies might not have palatable solutions, he said, “but they will keep the guillotines from being run up.” Most of those policies have to do with income inequality, which he said stems in part from zero interest rates, which hike the value of the assets that the wealthy own.
And, he stressed, it is important to defend the big banks, which have a necessary role in making loans and keeping the economy going. “We need them to finance the future,” Mr. Bloomberg said.
Another policy that may be unpopular but necessary: Telling kids they might not be cut out for college. "If you have two kids and one goes to Harvard and one becomes a plumber, they might ultimately make the same amount of money in life — with the exception that the plumber begins to make good money immediately," he said.
Another point: “Part of the skill set kids need to learn in college is that they need to be able to feed a family,” Mr. Bloomberg said.