He writes,

the static sector consists of the protected services (a big chunk of health care, education and government jobs), and the dynamic sector is heavily represented in U.S. exports, often consisting of goods and services rooted in tech, connected to tech, or made much more productive by tech innovations. Piece by piece, bit by bit, we Americans are replicating the two-tiered developing economy model, albeit from a much higher base level of wealth and productivity.

So, instead of the Great Stagnation, call it the Great Baumolization.

Read the whole thing. One more excerpt:

housing expenses will be the biggest remaining economic problem for the poor. Many lower earners will make do with lower-quality housing, or housing more distant from work, than most Americans are used to. Currently even the American poor commonly have more living space than the typical Swiss family; this may change as poorer individuals move to smaller living quarters as one way to save money.

Really? America has so much land. In Kansas City, Rebecca Wilder and I walked to a fancy neighborhood, and she later looked up the prices of two mansions that were for sale. 4200 square feet, with a 6-car (!) garage, was offered for $1.2 million, the price of a small apartment in Manhattan. The other house was listed at $475,000, which is probably less than one-fourth of what it would cost if it were in Tyler’s part of Northern Virginia.

To me, the implication of being poor will be that you are priced out of about 100 zip codes in the U.S., but if you are willing to locate away from the major metropolitan areas you won’t have to live in cramped quarters. Furthermore, with De-materialization, I can imagine that many people at all wealth levels will actually come to prefer smaller housing units.