Where does the future of work stand?
Most of these economists have devoted their careers to worrying about the labor market, particularly worrying about the living standards of low- and moderate-income workers.
A decade ago, robots still seemed pretty limited. Now, not so much and this is all happening really fast. It’s causing some to forecast a future where humans can’t find work. This is predicted to be one of the biggest challenges we face in the coming decades.
If you ask economists, they tend to have a different view from the futurists and Silicon Valley types. Most of these economists have devoted their careers to worrying about the labor market, particularly worrying about the living standards of low- and moderate-income workers.
One of the reasons a lot of economists are skeptical about robots taking all the jobs is that we’ve heard it before. There was a spike of automation anxiety in the late 20s and early 1930s when machines were starting to take over jobs on farms and also in factories. In 1928, there used to be guards who opened and closed the doors on New York subway trains, and people issued tickets before there were turnstiles.
So, while technology destroyed a lot of those jobs, we didn’t run out of work. Even though it’s really easy for us to see jobs being replaced by machines, it’s a bit harder to visualize the jobs that come from what happens next. New technology creates jobs in a few ways. There are the direct jobs for people who design and maintain the technology, and sometimes whole new industries are built on the technology.
The part we tend to forget is the indirect effect of labor-saving inventions. When companies can do more with less, they can expand, maybe add new products or open new locations, and they can lower prices to compete. This means that consumers can buy more of their product, or if we don’t want any more of it, we can use the savings to buy other things.
This process is how our standard of living has improved over time and it’s always required workers. The key economic logic here is automation does indeed displace workers who are doing work that got automated, but it doesn’t affect the total number of jobs in the economy because of these offsetting effects.
Now, all this doesn’t mean that the new jobs will show up right away or that they’ll be located in the same place or pay the same wage as the ones that were lost. All it means is that the overall need for human work hasn’t gone away. Technologists and futurists don’t deny that’s been true historically, but they question whether history is a good guide of what’s to come.
So, will this all change? Will today’s robots and AI cause mass unemployment? There’s reason to be skeptical, but nobody really knows. One thing we do know is that the wealth that technology creates isn’t necessarily shared with workers.
One of the problems we’ve seen over the last 40 years is that we have seen all of this rising productivity growth, but it hasn’t been broadly shared, it’s been captured by a thin slice of people at the top of the income distribution. Even if unemployment stays low, automation might worsen economic inequality.
However, technology isn’t destiny. Governments decide how a society weathers disruption, and that worries people on both sides of the debate about the future of work. The world has adopted policies that instead of really trying to counteract the trend caused by technology and globalization, we’ve in many cases exacerbated them. We’ve put a wind in the back of them and made them more extreme and that’s a big problem. We will probably always be fascinated by the prospect of robots taking our jobs but if we focus on things we can’t really control, we risk neglecting the things we can.