Gordon is less impressed with the third revolution: computers, starting around 1960 when big companies first used “mainframes.” True, they automated airline reservations, banking transactions and clerical work. Secretaries “began to disappear.” More recently, e-commerce has exploded. But Gordon sees the Internet, smartphones and tablets as tilted toward entertainment, not labor-saving. High productivity gains from cybertechnologies “had faded away by 2004,” he argues.
Technological innovation, though faltering, will continue, Gordon writes. Think more driverless cars and new cancer drugs. But he argues that the effects on average American living standards will be muted. Less-skilled workers from lackluster schools will cut productivity and wage growth further. Greater inequality will steer some gains to the wealthy. Higher taxes to cover budget deficits and transfers to the elderly will squeeze take-home pay. Health insurance costs (which he does not mention) would do the same. Though not preordained, Gordon’s prophecies suggest a long era of stunted economic growth.