I spoke at the 25th Anniversary conference of the ERF (Economic Research Forum)–a consortium of economists from the Middle East/North Africa in Kuwait on March 12th. I spoke on the fact that the largest policy induced price distortion in the global economy (and probably in the history of mankind) is that the US price of low/medium skill labor is 5 to 10 times the world opportunity cost (supply). This makes labor artificially scarce.
This has the consequence that we live in the perverse world in which the scarcest resources on the planet–the very high opportunity cost scientific, technical, and entrepreneurial talent–is devoting itself to inventing devices to economize on, and hence drive down the demand for, low skilled labor.
This makes the pressing social, political, and economic challenge for most developing countries of finding good jobs for their youth bulge of (by global standards) low skill labor harder.
The massive distortions in the price and availability of low skill labor in rich countries is causing the world’s geniuses to devote their efforts to making things worse for the world’s worse off. There isn’t even yet a global discussion on how to stop this bias in the the pattern of technological change.