Gates sees software replacing people; Greenspan calls for more H-1Bs

Both agree that U.S. secondary education system needs much improvement

WASHINGTON - Bill Gates and Alan Greenspan, in separate forums here, offered outlooks and prescriptions for fixing jobs and income.

Microsoft co-founder Gates, an optimist who says the pace of innovation is faster than ever, is concerned that graduates of U.S. secondary schools may not be able stay ahead of software automation.

Gates called it "software substitution," or systems capable of doing jobs now done by people.

"These things are coming fast," said Gates, in an interview with the American Enterprise Institute (See video). "Twenty years from now labor demand for a lots of skill sets will be substantially lower, and I don't think people have that in their mental model."

Gates said the U.S. secondary education system has to improve to keep pace with the changes.

In Greenspan's view, secondary education is deteriorating. If the education system isn't fixed, the U.S. will need an open H-1B policy, he argued.

"We cannot manage our very complex, highly sophisticated capital structure with what's coming out of our high schools," said Greenspan, former chairman of the Federal Reserve.

The impact of automation on the labor market, whether it's for drivers, waiters or nurses, is progressing, said Gates.

"It's the low income jobs that are really being eliminated by globalization," said Gates in a separate interview at The Atlantic (See video). "Now the quality of automation, software artificial intelligence, is improving fast enough that you can start to worry about middle class jobs. But mostly it has not been information work or middle class jobs," he said.

"Yes, the U.S. has lost manufacturing and union wage scales. Those were middle class jobs. Automation is doing that, the wage differential is tilted, the more education you get, the higher you are going to be paid, and the tilt of that is much higher. It's really that low end that's been impacted the most," said Gates in his Atlantic interview.

To stay ahead of these trends, education will have to be improved, said Gates.

"As the most advanced economy in the world, in order to maintain our relative position we have to do a better job educating our workforce. It's an opportunity," said Gates.

Neither Gates nor Greenspan talked about the globalization's impact on IT jobs, or the use of the H-1B visas by offshore outsourcing companies. But both called for improvements in education.

Greenspan, in an appearance at the National Association for Business Economics conference (See video), said the U.S. has an "unbelievably deteriorating" public school system.

"If we're not going to educate our kids, bring in other people who want to become Americans," said Greenspan, in arguing for an increase of H-1B workers. Greenspan told attendees at the conference that the H-1B visa "subsidizes the income of everyone in this room, including you and me."

In the context of income inequality, Greenspan put the H-1B program in his light: If the program were expanded, income wouldn't necessarily go down much, "but I bet up they would go down enough to really make an impact, because income inequality is a relative concept. People who are absolutely at the top of the scale in say 1925 would be getting food stamps today," said Greenspan.

"You don't have to necessarily bring up the bottom if you bring the top down," said Greenspan.

Patrick Thibodeau covers cloud computing and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov or subscribe to Patrick's RSS feed. His e-mail address is pthibodeau@computerworld.com.

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