ZEYNEP TUPEKCI CHAPTER 4 PAST AND FUTURE DIVIDES. SOCIAL MOBILITY, INEQUALITY, AND THE DIGITAL DIVIDE IN AUSTIN DURING THE TECH BOOM This caer examines te ecnomie con sequences of the technopolis development strategy adopted by Aus- ‘in, Texas. It concentrates on inequality, the digital divide, and labor market outcomes for low-income people, with a focus on the tech ‘boom of the late 19908 and early 2000s in Austin, often considered 4 paradigmatic example of the “new economy” high-tech metropolis and of the (successful) deliberate reinvention of a city. In particular, [ will examine the theoretical assuraptions that structure the technop. olis strategy and proposed remedies to negative economic outcomes caused by the digital divide such s job training, and how these play out within the context of a self-proclaimed technopolis. Job training in fields such as in‘ormation technology is a standard policy prescription for low-income workers, especially during eco- nomic downturns [including the current Great Recession that be gan in 2008], which makes the Austin example particularly relevant. However, actual labor-market outcomes for population segments that increase their computer skills have received less attention in schol- arly work on the digital divide. The digital divide rubric often con- fates two topics: individual outcomes resulting from lack of access to or competence with using the internet, on the one hand, and the overall changes to the structure of the labor market caused by the in- creasing prevalence of information technologies, on the other hand. While those two aspects of the divide overlap, they are not identical; a conceptual and analytic distinction must be maintained. In this chapter, I start by briefly reviewing theories about the Iabor-market consequences of information technology. Concerns46 Tees about the workforce effects of computers precede the digital divide discourse, which emerged only in the 19908. Within the digital divide framework, there are two interrelated issues concerning labor-market outcomes and information technology. The first concerns the over- all effect of increasingly powerful information technologies on the structure of the labor marke. Which kinds of occupations are grow- ing, and which are shrinking? How does new technology alter power relations between employer and employees? Which occupations gain in prestige and pay, and which lose? What can a locality do to cre- ate a better environment for its residents? A commonly proposed an- swer to these problems has teen the technopolis strategy, examined at Jength in Chapter 3 of this book. ‘The second major issue concerns feasible strategies for generat- ing upward mobility, or in some cases strategies for stopping or sta- bilizing downward mobility, for those segments of the labor market that are either already disadvantaged or threatened by technological changes. The commonly proposed remedy is job training. However, the two issues are clearly intertwined: the success of individual strat- egies will obviously depend on the opportunity structures in the la- bor market. INFORMATION TECHNOLOGIES AND LAROR MARKETS: COMPETING THEORIES, NARROW PUBLIC DIALOGUE While there is significant debate within the academic commu- nity about these topics, muct: of the civic discourse on the economic aspects of information technology policy subscribes implicitly to a viewpoint generally associated with social theorists such as Daniel Bell (1973) or Manuel Castel’s (1996). While not identical, and gen- erally much more nuanced than their public articulations, these theories essentially propose an economy in which information- technology-related skills are rewarded well and provide social mobil. ity, increased job opportunities, and economic benefit to their hold- ers, This view is often associated with terms such as “information age,” “knowledge economy," and “postindustrial society.” In particular, Bell's theory of postindustrial society makes specific predictions about the relationship between work, skill, and reward, following from the key premise that information and the tools for ac- cessing and manipulating information form the critical resource for, and thus the main path to, social mobility (Giddens 1981, 21; Lyon Past and Futute Divides 1988, 2-5) Webster and Robins 1986 32-48). Postindustrial society ‘theorists all claim to some degree thet we have witnessed an epochal shift from industrial society, where the critical resource was capi- tal, to postindustrial society, where the critical resource is technical competence and education. Bell (1973) underlines three major characteristics (or predictions} of the new information society: 1) a shift in emphasis from manufac- turing and material production to a service-oriented economy, (2) the importance of information as a commodity, and (3) an increase in the proportion of the workforce engaged in. “knowledge wark.” Such changes, Bell contends, will fundamentally change the structure of work and the power relations at work, increasing the power of the skilled knowledge worker and thus expanding the base of meritoc: racy, since social mobility will no longer be limited by access to capi- tal, the critical resource of the industrial society: ‘The postindustrial society adds a new criterion to the definitions of base and access, Technical skill becomes a condition of opera tive power, and higher education means the obtaining of technical skill, As a result, there has been a shift in the slope of power as, in key institutions, technical competence becomes the overriding consideration. ... The postindustrial society, in this dimension of status and power, is the logical extension of the meritocracy; it is the codification of new social order based, in principle, on the priority of educated talent. (1973, 426) Here, Bell joins together multiple assumptions that can be ana- lytically separated. The importance of information as a commodity could increase without necessarily :ncreasing the number of highly ‘paid, skilled jobs. Polarization theory, discussed below, proposes such ‘a scenario, Also, educated talent could be valued without capital be- ‘coming less important by comparison. On the contrary, in some set- tings, the importance of capital covld increase at a faster rate since ‘most educated labor requires extensive capital layout to practice. ‘What good are advanced biotechnology skills without a correspond. ing expensive laboratory? Following from the Bell-Castells tradition, the “skill-biased tech: nological change” school of thought argues that new technologies re- quire up-skilling from the workforce, and that those who do not fare ‘well in the new economy are those who suffer from lack of educaPY rafkes tion and appropriate high-level skills, The most common data point offered as proof of this theory is the strong positive return on edu: cation; on the average, a person with a college degree earns much more than a high school graiuate, while a person with an advanced degree cars more than someone with only a college degree [Autor et al. 1997). (PRD holders, however, average less than holders of MAs, MBAs, or other professional graduate degrees.) The reasoning for why higher-educated people are puid more is usually that there is a short age of them. This explanation is commonly cited by policy makers at all levels~including presidents, For example, President Clinton noted in his State of the Union address in 2000 that “today's income ‘sap is largely a skills gap” Clinton 2000). Such rhetoric has been ‘echoed by both George W. Bush and Barack Obama, whose adminis- tration launched a major effort to promote job training in response to the “Great Recession.” Indeed, while average wages have been mostly stagnant since the 19708, low-skilled workers have experienced a wage collapse, whereas higherskilled workers have fared less badly. The disparity between the fates of differently educsted segments of the labor market, cou: pled with the ubiquity of iniormation technology in the workplace, guided many to what seemed like an obvious conclusion: we are mov- ing toward an economy in waich skills are rewarded, and those that, are lefe behind could get ahead if they acquired the right skills. However, the Bell-Castells model also incorporates several leaps in logic, First it assumes that working with high technology is uni- formly a high-skilled endeavor, In fact, many advances in technology have been made with the explicit goal of lowering skill requirements (Noble 1984; Zuboff 1988), Thus, by itself, the prevalence of comput- ers in the workplace does not warrant the assumption that the jobs associated with them have been up-skilled. Second, many activities related to technology, such as assembling computers, are themselves low-skill jobs. A sector can thus be classi- fied as high tech even though its occupational effects on the economy are mostly confined to the .ow-skilled, low-paid sector. This con founding of sector and occupational structure bedevils much of the public discourse on the topic. ‘Third, there are data clearly in conflict with the received wisdom about developed countries in general, and the United States in partic- ular, becoming a predominantly high-skilled economy. In most in- dustrialized nations, the majority of the population is now employed 8 ost and Future Divides in what is termed the “service” industrya relatively misleading cat- ‘egory that lumps together low-wage corporate positions and McJobs with high-paid, high-skilled professions like doctor and lawyer. Dis- aggregating the service sector into occupational categories reveals 2 more exact and sobering conclusion: most service sector jobs are low paid and low skilled. More precisely, these countries have seen the replacement of high-paid, often unionized jobs in capital-intensive ‘manufacturing industries with low-peid jobs, many of which involve providing services rather than producing goods. By contrast, polarization theorists have argued that information technology may have negative effects on the lower segments of labor markets, either in part or as a whole, even while requiring up-skilling for some segments. Polarization theory, or labor-market-segmentation theory, makes the case that, as a result of advances in technology, jobs requiring medium-level skills ate reduced in number or elimi- nated, with the majority of employees reallocated to low-skilled jobs, while at the same time a relatively small number of new ond higher- skilled planning and monitoring jobs is created |Kubicek 1985, 76}. Polarization theory dovetails with the work of theorists who have ‘suggested that computers can be useé for significantly different pur- poses at the upper and lower levels of the occupational structure; in the large low-paid, low-skilled job sector, information technology is used to automate, deskill, and control (Braverman 1975} rather than to enhance and "informate” (Zuboff x988]. In fact, a 2006 paper (AU: tor, Katz, and Kearney] finds that the nature of the existing economic polarization, as well as increases thereof, corresponds closely with differential application of computers in higher and lower segments of the labor market. In his book The Work of Nations, published in 1991, Robert Reich ‘sums up the polarization approach to analyzing the structure of work in an information society and predic:s roughly the occupational re- sults depicted above All Americans used to be in the same economic boat. Most rose or fell together, as the corporations in which they were employed, the industries comprising such corporations, and the national econ- ‘omy as a whole became more productive—or languished. But na tional borders no longer define our economic fates, We are now in different boats, one sinking rapidly, cne sinking more slowly, and the third rising steadily. (Reich 1991, 208)