The contention that automation and digital technologies are partly responsible for today’s lack of jobs has obviously touched a raw nerve for many worried about their own employment. But this is only one consequence of what ­Brynjolfsson and McAfee see as a broader trend. The rapid acceleration of technological progress, they say, has greatly widened the gap between economic winners and losers—the income inequalities that many economists have worried about for decades. Digital technologies tend to favor “superstars,” they point out. For example, someone who creates a computer program to automate tax preparation might earn millions or billions of dollars while eliminating the need for countless accountants.
Nevertheless, automation will indeed destroy many current jobs in the coming decades. As McAfee says, “When it comes to things like AI, machine learning, and self-driving cars and trucks, it’s still early. Their real impact won’t be felt for years yet.” What’s not obvious, though, is whether the impact of these innovations on the job market will be much bigger than the massive impact of technological improvements in the past. The outsourcing of work to machines is not, after all, new—it’s the dominant motif of the past 200 years of economic history, from the cotton gin to the washing machine to the car. Over and over again, as vast numbers of jobs have been destroyed, others have been created. And over and over, we’ve been terrible at envisioning what kinds of new jobs people would end up doing.
Of course, if automation is happening much faster today than it did in the past, then historical statistics about simple machines like the ATM would be of limited use in predicting the future. Ray Kurzweil’s book The Singularity Is Near (which, by the way, came out 12 years ago) describes the moment when a technological society hits the “knee” of an exponential growth curve, setting off an explosion of mutually reinforcing new advances. Conventional wisdom in the tech industry says that’s where we are now—that, as futurist Peter Nowak puts it, “the pace of innovation is accelerating exponentially.” Here again, though, the economic evidence tells a different story. In fact, as a recent paper by Lawrence Mishel and Josh Bivens of the Economic Policy Institute puts it, “automation, broadly defined, has actually been slower over the last 10 years or so.” And lately, the pace of microchip advancement has started to lag behind the schedule dictated by Moore’s law.
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Noma Bar (Illustration); Data from Bureau of Labor Statistics (Productivity, Output, GDP Per Capita); International Federation of Robotics; CIA World Factbook (GDP by Sector); Bureau of Labor Statistics (Job Growth, Manufacturing Employment); D. Autor and D. Dorn, U.S. Census, American Community Survey, and Department of Labor (Change in Employment and Wages by Skill, Routine Jobs); Bureau of Labor Statistics (Productivity, Output, GDP Per Capita); International Federation of Robotics; CIA World Factbook (GDP by Sector)
It’s hard not to instantly like Baxter, in part because it seems so eager to please. The “eyebrows” on its display rise quizzically when it’s puzzled; its arms submissively and gently retreat when bumped. Asked about the claim that such advanced industrial robots could eliminate jobs, Brooks answers simply that he doesn’t see it that way. Robots, he says, can be to factory workers as electric drills are to construction workers: “It makes them more productive and efficient, but it doesn’t take jobs.”
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Granted, there are much scarier forecasts out there, like that University of Oxford study. But on closer examination, those predictions tend to assume that if a job can be automated, it will be fully automated soon—which overestimates both the pace and the completeness of how automation actually gets adopted in the wild. History suggests that the process is much more uneven than that. The ATM, for example, is a textbook example of a machine that was designed to replace human labor. First introduced around 1970, ATMs hit widespread adoption in the late 1990s. Today, there are more than 400,000 ATMs in the US. But, as economist James Bessen has shown, the number of bank tellers actually rose between 2000 and 2010. That’s because even though the average number of tellers per branch fell, ATMs made it cheaper to open branches, so banks opened more of them. True, the Department of Labor does now predict that the number of tellers will decline by 8 percent over the next decade. But that’s 8 percent—not 50 percent. And it’s 45 years after the robot that was supposed to replace them made its debut. (Taking a wider view, Bessen found that of the 271 occupations listed on the 1950 census only one—elevator operator—had been rendered obsolete by automation by 2010.)
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That robots, automation, and software can replace people might seem obvious to anyone who’s worked in automotive manufacturing or as a travel agent. But Brynjolfsson and McAfee’s claim is more troubling and controversial. They believe that rapid technological change has been destroying jobs faster than it is creating them, contributing to the stagnation of median income and the growth of inequality in the United States. And, they suspect, something similar is happening in other technologically advanced countries.
Most people spend up to forty or more hours each week in paid employment. Some exceptions are children, retirees, and people with disabilities; However, within these groups, many will work part-time, volunteer, or work as a homemaker. From the age of 5 or so, many children’s primary role in society(and therefore their ‘job’) is to learn and study as a student.
New technologies are “encroaching into human skills in a way that is completely unprecedented,” McAfee says, and many middle-class jobs are right in the bull’s-eye; even relatively high-skill work in education, medicine, and law is affected. “The middle seems to be going away,” he adds. “The top and bottom are clearly getting farther apart.” While technology might be only one factor, says McAfee, it has been an “underappreciated” one, and it is likely to become increasingly significant.
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Even our fears about automation and computerization aren’t new; they closely echo the anxieties of the late 1950s and early 1960s. Observers then too were convinced that automation would lead to permanent unemployment. The Ad Hoc Committee on the Triple Revolution—a group of scientists and thinkers concerned about the impact of what was then called cybernation—argued that “the capability of machines is rising more rapidly than the capacity of many human beings to keep pace.” Cybernation “has broken the link between jobs and income, exiling from the economy an ever-­widening pool of men and women,” wrote W. H. Ferry, of the Center for the Study of Democratic Institutions, in 1965. Change “cybernation” to “automation” or “AI,” and all that could have been written today.
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So if the data doesn’t show any evidence that robots are taking over, why are so many people even outside Silicon Valley convinced it’s happening? In the US, at least, it’s partly due to the coincidence of two widely observed trends. Between 2000 and 2009, 6 million US manufacturing jobs disappeared, and wage growth across the economy stagnated. In that same period, industrial robots were becoming more widespread, the internet seemed to be transforming everything, and AI became really useful for the first time. So it seemed logical to connect these phenomena: Robots had killed the good-­paying manufacturing job, and they were coming for the rest of us next.
Perhaps the most damning piece of evidence, according to Brynjolfsson, is a chart that only an economist could love. In economics, productivity—the amount of economic value created for a given unit of input, such as an hour of labor—is a crucial indicator of growth and wealth creation. It is a measure of progress. On the chart Brynjolfsson likes to show, separate lines represent productivity and total employment in the United States. For years after World War II, the two lines closely tracked each other, with increases in jobs corresponding to increases in productivity. The pattern is clear: as businesses generated more value from their workers, the country as a whole became richer, which fueled more economic activity and created even more jobs. Then, beginning in 2000, the lines diverge; productivity continues to rise robustly, but employment suddenly wilts. By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation. Brynjolfsson and McAfee call it the “great decoupling.” And Brynjolfsson says he is confident that technology is behind both the healthy growth in productivity and the weak growth in jobs.
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Given his calm and reasoned academic demeanor, it is easy to miss just how provocative Erik Brynjolfsson’s contention really is. ­Brynjolfsson, a professor at the MIT Sloan School of Management, and his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that impressive advances in computer technology—from improved industrial robotics to automated translation services—are largely behind the sluggish employment growth of the last 10 to 15 years. Even more ominous for workers, the MIT academics foresee dismal prospects for many types of jobs as these powerful new technologies are increasingly adopted not only in manufacturing, clerical, and retail work but in professions such as law, financial services, education, and medicine.
Now, it’s possible that some of the productivity slowdown is the result of humans shifting out of factories into service jobs (which have historically been less productive than factory jobs). But even productivity growth in manufacturing, where automation and robotics have been well-established for decades, has been especially paltry of late. “I’m sure there are factories here and there where automation is making a difference,” says Dean Baker, an economist at the Center for Economic and Policy Research. “But you can’t see it in the aggregate numbers.”
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McAfee points to both retail and transportation as areas where automation is likely to have a major impact. Yet even in those industries, the job-loss numbers are less scary than many headlines suggest. Goldman Sachs just released a report predicting that autonomous cars could ultimately eat away 300,000 driving jobs a year. But that won’t happen, the firm argues, for another 25 years, which is more than enough time for the economy to adapt. A recent study by the Organization for Economic Cooperation and Development, meanwhile, predicts that 9 percent of jobs across 21 different countries are under serious threat from automation. That’s a significant number, but not an apocalyptic one.
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Nor does the job market show signs of an incipient robopocalypse. Unemployment is below 5 percent, and employers in many states are complaining about labor shortages, not labor surpluses. And while millions of Americans dropped out of the labor force in the wake of the Great Recession, they’re now coming back—and getting jobs. Even more strikingly, wages for ordinary workers have risen as the labor market has improved. Granted, the wage increases are meager by historical standards, but they’re rising faster than inflation and faster than productivity. That’s something that wouldn’t be happening if human workers were on the fast track to obsolescence.
The peculiar thing about this historical moment is that we’re afraid of two contradictory futures at once. On the one hand, we’re told that robots are coming for our jobs and that their superior productivity will transform industry after industry. If that happens, economic growth will soar and society as a whole will be vastly richer than it is today. But at the same time, we’re told that we’re in an era of secular stagnation, stuck with an economy that’s doomed to slow growth and stagnant wages. In this world, we need to worry about how we’re going to support an aging population and pay for rising health costs, because we’re not going to be much richer in the future than we are today. Both of these futures are possible. But they can’t both come true. Fretting about both the rise of the robots and about secular stagnation doesn’t make any sense. Yet that’s precisely what many intelligent people are doing.
“We were lucky and steadily rising productivity raised all boats for much of the 20th century,” he says. “Many people, especially economists, jumped to the conclusion that was just the way the world worked. I used to say that if we took care of productivity, everything else would take care of itself; it was the single most important economic statistic. But that’s no longer true.” He adds, “It’s one of the dirty secrets of economics: technology progress does grow the economy and create wealth, but there is no economic law that says everyone will benefit.” In other words, in the race against the machine, some are likely to win while many others lose.
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