{"id":603755,"date":"2026-02-20T16:04:25","date_gmt":"2026-02-20T16:04:25","guid":{"rendered":"https:\/\/www.europesays.com\/us\/603755\/"},"modified":"2026-02-20T16:04:25","modified_gmt":"2026-02-20T16:04:25","slug":"one-of-americas-most-critical-resources-is-eroding","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/603755\/","title":{"rendered":"One of America\u2019s most critical resources is eroding"},"content":{"rendered":"

America is having a collective freakout about jobs \u2014 specifically, that soon AI<\/a> will do everything and leave everyone unemployable. This concern is not necessarily misplaced, but it is better understood as part of a larger worry: that one of the country\u2019s most critical resources, human capital, is eroding.<\/p>\n

A large, diverse and highly skilled labor force is what made the US an economic powerhouse. Now both the stock and value of its human capital is degrading, and almost no one is doing anything to stop it.
The biggest threat to America\u2019s human capital is fewer humans. As the population ages and migration declines, the size of the labor force is shrinking. More broadly, a shrinking population means fewer workers and consumers \u2014 and, in many rich countries, more young people working to pay for the costs of older workers\u2019 retirements and the government\u2019s debts. This is a big threat to economic prosperity that the US has usually mitigated though immigration, which is not a likely solution this time.<\/p>\n

\"graph\"Bloomberg There is another way a country can get by with a shrinking population: if its workers become more productive. If a young worker is so smart and skilled he can produce the output of three workers, then an aging workforce is less of a problem. In the 20th century, as technology made workers more efficient and people became more educated, human capital in America became much more valuable.<\/p>\n

There are some preliminary signs that productivity is rising now. After years of middling numbers, labor productivity increased in 2025. But these encouraging numbers aren\u2019t providing much comfort, because people are worried that AI will be so productive that the need for human workers will decline anyway. If technology displaces workers, then the value of their human capital can we wiped out entirely.<\/p>\n

\"ETLive Events
Again, I am not saying this isn\u2019t a valid worry \u2014 only that it is as old as time. In the past, technology not only made labor more productive, it also increased the demand for labor. Some jobs were lost, but new and better ones were created; wages and employment went up. Some people who work in technology argue that this time is different, but it is way too early to know for sure.
First, widespread AI-induced job loss, or even a lack of hiring, can\u2019t yet be seen in the data. Many industries that use AI are the same ones doing the hiring. It is true there is less job growth overall, but much of that can be explained by cyclical changes to the economy and a fall in migration.Second, a lot of the speculation about the end of jobs is coming from people who\u2019ve never worked in the jobs they presume will disappear. You never know what a job entails and what it takes to be good at it unless you\u2019ve done it. A wealth manager, for example \u2014 one of the jobs said to be on borrowed time \u2014 doesn\u2019t just write reports and pick stocks. They (the successful ones, at least) cultivate relationships and function almost as therapists. Those softer skills may become even more valuable as AI becomes more prevalent, freeing up time to spend on deeper relationships and more clients. In that case, AI could make human labor more valuable, and people will still have jobs.<\/p>\n

As in the past, the most important question may be how we manage the transition to a new technology, which is often long and difficult. A mismatch between skills and technology could mean a short-term decline in human capital, even if productivity numbers increase.<\/p>\n

Historically, the mismatch was addressed through education, which improved with each generation, enabling workers to work with new innovation. But education may no longer be serving the same purpose \u2014 as more of the population goes to college, it may be reaching a point of diminishing returns. Even more concerning is that educational standards are weakening at both the secondary and post-secondary level. Too many graduates have weak critical thinking skills and are facing technology that is getting smarter faster than they are.<\/p>\n

Paul Krugman famously said, \u201cProductivity isn\u2019t everything, but in the long run it is almost everything.\u201d That \u201calmost\u201d is crucial: Even if US productivity increases, if its human capital degrades, it will be in trouble. Even high productivity numbers may not be enough to pay the government\u2019s debts, and there will be many people unhappily and under-employed.<\/p>\n

That scenario is not inevitable. AI cannot by itself improve America\u2019s economic and demographic growth. That will require better education that trains students to think rigorously, as well as immigration that prioritizes highly skilled migrants. What\u2019s required, in other words, is a strategy to improve our human capital.<\/p>\n

The views expressed here are the author’s own, and not EconomicTimes.com’s.<\/p>\n","protected":false},"excerpt":{"rendered":"America is having a collective freakout about jobs \u2014 specifically, that soon AI will do everything and leave…\n","protected":false},"author":3,"featured_media":603756,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[691,64,79,212036,75,277,67,132,68,259883,1154,241275,117841],"class_list":["post-603755","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ai","tag-business","tag-economy","tag-h-1b","tag-tariff","tag-trump","tag-united-states","tag-unitedstates","tag-us","tag-us-human-capital","tag-us-news","tag-us-universities","tag-us-visa"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116103811405081429","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/603755","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=603755"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/603755\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/603756"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=603755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=603755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=603755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}