Beyond Redistribution: Creating Good Jobs and Fostering Regional Economic Resilience in an Automated World

The podcast "Are Redistribution Policies Enough" from NewEconomicThinking features Laura Tyson and Gordon Hanson discussing the future of work, arguing that redistribution alone is insufficient to address the challenges posed by automation, digitization, and globalization. The central argument is that policy must shift focus from post-production redistribution to pre-production and production-phase interventions aimed at creating "good jobs" and enhancing worker capabilities. They emphasize the polarization of employment, with a decline in middle-skill jobs and growth in higher-skill positions, necessitating policies that enable individuals to access these better opportunities. A critical distinction is made between people-based policies and place-based policies. While worker mobility is historically valued, Hanson highlights that most workers, especially older and less educated ones, are not highly mobile. Therefore, policies must also focus on revitalizing distressed regions by helping existing industries pivot or attracting new growth sectors. Tyson further distinguishes between pre-production policies (investing in human capital like education, healthcare, networks), production policies (industrial policy, sector-specific interventions, minimum wage), and post-production policies (redistribution). The discussion also nuances the role of national vs. regional approaches, with a leaning towards regional solutions given federal gridlock and the localized nature of economic distress. Practical recommendations include strengthening vocational and educational training systems, drawing inspiration from models like Germany's employer-designed programs, and enhancing the link between community colleges and local employers. The importance of access to capital for small firms, particularly in disadvantaged communities, is stressed, with a call for community lending initiatives. For distressed regions, strategies involve leveraging existing anchors (e.g., healthcare facilities), improving commuting linkages to advantaged areas, and fostering a better business ecosystem through infrastructure, finance, and civic engagement. The Danish "flex-security" model is proposed as a way to support workers during job transitions without impeding mobility. The conversation underscores the profound political implications of economic shifts, as seen in the "forgotten" feeling in regions affected by deindustrialization and the complexities of transitioning to a green economy. The panelists touch upon the decline of unionization as a factor in the decreasing labor share of productivity gains, advocating for policies that strengthen worker voice. The discussion also implicitly critiques the effectiveness of traditional local economic development strategies, like tax incentives, in favor of more targeted investments in human capital and infrastructure. Ultimately, the podcast suggests a multi-faceted, regionally tailored approach is essential for building economic resilience and ensuring a more equitable future of work.

"redistribution itself is a policy about i would say addressing income and wealth inequality by distributing market returns taking market returns and redistributing them and I think the real challenge for policy in the world of automation and the acceleration of digitization of everything the real challenge is the creation of good jobs"

"we actually have seen this polarization of employment we have seen a disappearance as a share of total employment of middle skill mid education jobs"

"the economics of place is a very powerful force in in people's lives how things are doing where you live matter enormously for your material well-being"

"we need to think about moving from a world where policies are are people based to have more policies that are are place based"

"pre-production is people this is where the focus is on people the skill the endowments and networks and links and understanding and information all the health the things they need to actually be have the skills to get the good jobs but the production phase of all of this is has to do with where are those good jobs going to be"

"one of the things that we come to appreciate is how agile community colleges are in redirecting their training programs to meet the needs of local or prospective employers"

"it's still the case today that it's very hard for a small firm to get access to capital particularly in a disadvantaged community or disadvantage there's there's nothing so we really they are they're underbanked the banks have moved out there's just we've got to figure out a way to do this"

"unions have lost their ability they've lost their voice and so the biden administration will be very committed to trying to strengthen unions and I think that is the right thing to do"