Excerpt
Speech to the Center for the Study of Democracy
2006-2007 Economics of Governance Lecture
University of California, Irvine
By Janet L. Yellen, President and CEO, Federal Reserve Bank of San Francisco
November 6, 2006, 4:00 PM Pacific Standard Time

In recent years, globalization and skill-biased technological change may have been working in combination to particularly depress the wage gains of those in the middle of the U.S. wage distribution... The explanation goes like this. The surge in the use of new technologies that began in the mid-1990s led to major changes in the way business was conducted and organized within the U.S. and globally. Technological change and globalization, especially outsourcing, complemented the skills of highly able workers performing non-routine work requiring problem-solving skills. This explains the continued rapid increase in real wages at the top of the distribution. In the middle of the distribution, however, technology and globalization had the opposite effect—substituting for workers performing routine or repetitive tasks and depressing their wages...

Let me elaborate with an example from the technology side. Take the accounting profession. Computers and telecommunications technologies have increased wages for accountants, who tend to be at the top end of the distribution. In contrast, in the middle of the distribution are workers like bookkeepers, who are being replaced by technology.




I have added colors for emphasis. You can find the whole speech, together with graphs and charts, here.