Technology Increasing the Workforce: Mostly with Workers in Low-Wage Jobs!

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Dear Commons Community,

Unemployment is at an all-time low in this country but the condition of the American worker may not be so rosy. The New York Times has a featured article this morning that begs the question as to whether high technology is splitting the American workforce into a small group of well-educated professionals who enjoy high and  rising wages, and a much larger group who toil in low-wage jobs with few chances to advance.  Relying on a recent study by researchers at M.I.T. and Utrecht University, the author of the article comments that jobs are falling in every industry that introduced technology to enhance productivity.  Here is an excerpt:

“Something different is going on in our current technological revolution. In a new study, David Autor of the Massachusetts Institute of Technology and Anna Salomons of Utrecht University found that over the last 40 years, jobs have fallen in every single industry that introduced technologies to enhance productivity.

The only reason employment didn’t fall across the entire economy is that other industries, with less productivity growth, picked up the slack. “The challenge is not the quantity of jobs,” they wrote. “The challenge is the quality of jobs available to low- and medium-skill workers.”

Adair Turner, a senior fellow at the Institute for New Economic Thinking in London, argues that the economy today resembles what would have happened if farmers had spent their extra income from the use of tractors and combines on domestic servants. Productivity in domestic work doesn’t grow quickly. As more and more workers were bumped out of agriculture into servitude, productivity growth across the economy would have stagnated.

“Until a few years ago, I didn’t think this was a very complicated subject; The Luddites were wrong and the believers in technology and technological progress were right,” Lawrence Summers, a former Treasury secretary and presidential economic adviser, said in a lecture at the National Bureau of Economic Research five years ago. “I’m not so completely certain now.”

The growing awareness of robots’ impact on the working class raises anew a very old question: Could automation go too far? Mr. Acemoglu and Pascual Restrepo of Boston University argue that businesses are not even reaping large rewards for the money they are spending to replace their workers with machines.

But the cost of automation to workers and society could be substantial. “It may well be that,” Mr. Summers said, “some categories of labor will not be able to earn a subsistence income.” And this could exacerbate social ills, from workers dropping out of jobs and getting hooked on painkillers, to mass incarceration and families falling apart.

Silicon Valley’s dream of an economy without workers may be implausible. But an economy where most people toil exclusively in the lowliest of jobs might be little better.”

The questions raised in this article should be of concern because the introduction of advanced technologies such as robotics and artificial intelligence (A.I.)  is really just beginning.  Over the next ten to fifteen years, we will see massive movement in our economy to these technologies.  White-collar workers as well as blue-collar workers will be severely impacted.


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