Tuesday, July 04, 2006

The Bicycle vs the PDF File

Many economists have suggested that recent increases in income inequality are largely attributable to technological changes that have reduced the demand for less-skilled workers. The current issue of the Economist gives a striking example:
bike messengers, the freewheeling mavericks whose tattooed calves and daredevil stunts once defined urban cool, are slowly vanishing from America's streets....The reason is straightforward. High-speed internet, PDF files, digital photography and digital audio have been eroding bike-messenger revenues by between 5-10% a year since 2000, or so reckons Lorenz Götte, an assistant professor of economics at the University of Zurich (and a former bike messenger himself). The revenue slump has sent wages tumbling. In 2000, messengers in San Francisco could make $20 an hour. Now the average is closer to $11.