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The Internet is making some people poorer

"What good is the Internet if you can’t read?

An exhaustive new report by the World Bank assesses the winners and losers of the digital revolution -- not by occupation or education level, but by country. Not surprisingly, advanced nations such as the United States and most of Europe are capturing most of the benefits of digital technology. In theory, that new technology ought to be lifting up developing countries, too, as it trickles out to them. Instead, however, the bank’s report finds that income inequality may be worsening in poorer nations, as those with digital-era skills pull ever further away from those without.

“Although [digital] technologies are becoming widespread, the economic payoffs are not,” the report reads. “The poor almost exclusively use only mobile phones not connected to the Internet. And even if they do have access to the Internet, they lack the skills to use it productively, with many unable to read in the first place.”

The Internet is making some people poorer - Yahoo Finance

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Perhaps people will be more likely to want to learn to read as a result of new technology?

The solutions are familiar, and also improbable: Encourage the more repressive nations of the world to open up, allow more competition and improve Internet connectivity for their citizens. Let more information in and empower the little guy. In developed nations, make it easier for people who lose their jobs to move where the jobs are, perhaps through mobility subsidies. Improve education.

Authorities everywhere are just now beginning to grapple with the second- and third-order consequences of the digital revolution, more than 20 years after it first became apparent a new kind of gold rush was on. Economists typically point out that every kind of technological progress destroys old jobs, while creating new ones; most of the time, living standards rise and it’s a net gain for humanity.

But as President Obama and many others have pointed out, it can be painful along the way and living standards sometimes fall permanently for the losers. Finding compassionate, effective and affordable ways to lift up those economically harmed by innovation has always been a challenge, and it remains one that even digital technology hasn’t yet solved.

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