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.