“Two notable economists have recently weighed in on the issue that I’ve been writing about extensively here: job automation and its impact on the future economy.
“Paul Krugman links to a 1996 article in which he imagined a future where ‘information technology would end up reducing, not increasing, the demand for highly educated workers, because a lot of what highly educated workers do could actually be replaced by sophisticated information processing—indeed, replaced more easily than a lot of manual labor.’
“That’s very much inline with what I think is likely to happen. In fact The Atlantic recently published an excerpt in which I talk about how a Radioligist’s job might be easier to automate than a housekeeper’s.
“Brad DeLong seems less concerned:
“I don’t see a problem with the number of jobs: I don’t see any reason that technological unemployment should be any more in our future than it has been in our past."
“Really? Keep in mind that in the U.S. we need to create over a million jobs a year just to keep up with population growth. Within the next decade or so, I think it’s likely that millions of jobs in both low skill areas and high skill occupations are going to be increasingly susceptible to automation. If that happens, we’ll need to replace all those jobs while still keeping up with growth in the workforce. (And of course that’s on top of digging out of the massive unemployment hole we’re currently in).
“As Krugman notes, one economist that has done extensive work in this area is David Autor of MIT. Autor co-authored a paper that looked at how computers have substituted for labor going all the way back to the 1960s and found that, as we might expect, routine and repetitive jobs are highly susceptible to automation. Autor has found that, as a result, the job market is currently polarized: A great many of the middle-skill jobs that used to support a solid middle class lifestyle have been automated—leaving us with high skill/high wage jobs that require lots of education and training and lots of low skill jobs with very low wages.”
But I ask the question, does job creation come from older businesses that are automating in order to stay productive, or from new businesses? Everything I read about job creation is that the generator of new jobs is small business—startups, entrepreneurs hiring, new places we’ve never dreamed about.
In the March Automation World, at least two business owners contributed experiences where automation not only saved jobs that might have gone overseas but actually added more high-quality jobs.
I’m not an unbridled optimist, but I don’t see the end of the world, either. I’m optimistic about the US if we can continue to provide the infrastructure and financing that encourages more new businesses. If we don’t, then we’re toast.
I’ve previously written about Ford and his book Lights in the Tunnel here and here.
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