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The Future of Work

October 29, 2018
The United States is on the cusp of a technological revolution. Innovation within our borders is accelerating at a break-neck pace, and companies are about to roll out a myriad of new tech over the next decade.[1] Research and development in artificial intelligence, autonomous vehicles, drones, and fully-automated assembly lines have the potential to boost the productivity of the United States, improve the quality of living for countless Americans, and fundamentally change the way the global economy functions. However, this economic change will also fundamentally restructure our labor markets.

Some have predicted that the economy of the future will lead to mass unemployment, ultimately breaking down our capitalistic society. Arguments of this sort typically point out that when robotic factories run themselves, only the owners of industry will make money. This perspective rests on one fundamental tenet: certain jobs are going to disappear, leaving workers unemployed and unqualified for reemployment. Zolton Istvan captured this school of thought when he wrote, “Truck driving is one of the most prevalent jobs in America, with about 3.5 million drivers. What will we do if they are replaced with vehicles that don’t need human intervention to deliver goods? […] Capitalism says this is the nature of the competitive economy. However, those jobs that are replaced will never be regained. Some (unemployed individuals) will likely need to be provided for by the state.”[2] However, I believe that historical trends do not support the claim that lost jobs are disappearing with nothing to replace them.

Preliminary data shows that many low-skill service industry jobs are not as prone to being automated as one may assume. According to a study, only 2.0% of Americans over 55 and 8.0% of Millennials would like a robot waiter to replace conventional human waiters.[3] Though these sentiments are subject to change, this seems to imply that many jobs, especially those in the hospitality industry, are here to stay for some time. Obviously, this is not the first time in American history that new technology has changed our labor markets and removed historically prevalent jobs from existence. Today, few, if any, people make a living as a telegraphist, switchboard operator, lamplighter, town crier, or elevator operator. However, in the recent past, these jobs employed tens of thousands of Americans.[4] Given that technology has innovated these jobs out of existence, one would assume that unemployment has increased significantly. However, this is not the case.

Looking at employment data provided by the Bureau of Labor Statistics from 1948 to present, we see that the technological innovation America has undergone throughout this period has led to job creation, not destruction. Shown below by the blue line is the BLS’s employment data for American laborers. Analyzing the linear regression model, we find that, on an annual basis, Americans generally have become less employed since the late 1940’s. It is important to point out – however – that our R-squared analysis demonstrates a poor fit with our regression model, suggesting that the data is more subject to short-term economic conditions than long-term technological change; this is most obvious when, in 2008, employment plummeted as a result of a recession, not changes in the labor market. We can learn more from this statistic by assessing the Labor Force participation rate, shown below in orange, in conjunction to the employment rate. The participation rate and employment rate together demonstrate that, though we have been slowly losing employment on a percentage basis, we have also simultaneously been adding new types of jobs to our economy. Ultimately, the data show that since the 1940’s, technological innovation has resulted in job growth, not loss.

Image: Employment Percentage and Labor Force Participation Rate, Source: Bureau of Labor StatisticsImage: Employment Percentage and Labor Force Participation Rate, Source: Bureau of Labor Statistics

Therefore, the data show that, although many jobs have been innovated out of existence, Americans nonetheless continue to find employment. Michael Kratsios, the Deputy Assistant to the President for Technology Policy summarized this ability for the labor markets to change and accommodate changing technological environments when the White House Office of Science and Technology Policy hosted a summit on Artificial Intelligence for American Industry. During the summit, Deputy Assistant Kratsios stated, “To a certain degree, job displacement is inevitable. But we can’t sit idle, hoping eventually the market will sort it out. We must do what Americans have always done: adapt.” This concept of adaptations as critical to the future of the American labor force has been fully embraced by the Trump Administration, which has pursued multiple policy remedies. The most pernicious issue faced by those whose jobs have been innovated out of existence is that they may be left unqualified for the jobs of the future. To address this problem, President Trump signed an executive order on June 15th, 2017 that directs the “Federal Government to provide more affordable pathways to secure, high paying jobs by promoting apprenticeships and effective workforce development programs.”[5] Additionally, the Trump Administration has supported existing federal programs including but not limited to: STEM+C, CS for All, GAANN, and NSF Graduate Fellowships.[6][7][8][9] These programs are designed to help prepare America’s workforce for the jobs of the future by equipping them with valuable computer science education and technical skills.

The specific nature of what the jobs of the future will entail is a topic which is debated by industry experts to no end. Though this is largely speculative, and we cannot be certain what the future will hold, we can look to companies which are actively pursuing innovation to see what the new baseline may be. For companies that have actively embraced the introduction of Artificial Intelligence in the workplace, preliminary signs are resoundingly good. According to Capgemini Consulting – an industry-leading multinational business consulting group – data collected from firms, “implementing artificial intelligence have highlighted the growth opportunity of AI and counters the fears that AI will cause job losses in the short term.” Research has shown that AI is transforming how organizations do business, manage customer relationships, and stimulate ground-breaking innovation. Furthermore, firms implementing AI systems have found that this technological innovation leads to the creation of new jobs.[10] Today, companies are implementing AI systems alongside human “pilots” to increase the flexibility, speed, and scale of their operations. My favorite example of this trend comes from Mercedes Benz, who was among the first auto-manufacturer to fully automate their assembly lines. However, Mercedes has recently replaced these automated systems with artificially intelligent systems that depend on machine-human collaboration, thereby re-introducing human employment into their assembly lines. This human-robotic cooperation allows Mercedes to achieve a highly customizable product for their demanding clientele, while simultaneously offering the exacting precision and speed which robots can afford.[11] In this way, well-trained humans and sophisticated robotic systems will work together in the workplace of the future, producing goods more quickly, more accurately, and more cost-effectively than ever before. So, despite the fact that worker re-education programs are needed, and that innovation may squeeze certain segments of laborers in the short term, the data indicates that, in the long term, Americans will continue to find employment.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

 

References

  [1]https://www2.deloitte.com/insights/us/en/industry/technology/from-exponential-technologies-to-exponential-innovation.html

  [2]https://techcrunch.com/2016/03/29/will-capitalism-survive-the-robot-revolution/

  [3]https://www.bloomberg.com/news/articles/2018-07-23/millennials-want-tech-to-complement-not-overwhelm-dining-experience

  [4]https://www.cognizant.com/perspectives/21-jobs-of-the-future

  [5]https://www.whitehouse.gov/presidential-actions/3245/

  [6]https://www.nsf.gov/news/special_reports/csed/csforall.jsp

  [7]https://www.nsf.gov/funding/pgm_summ.jsp?pims_id=505006

  [8]https://www2.ed.gov/programs/gaann/index.html

  [9]https://www.nsfgrfp.org/

  [10]https://www.capgemini.com/service/digital-services/insights-data/data-science-analytics/artificial-intelligence-where-and-how-to-invest/

  [11]https://hbr.org/2018/07/collaborative-intelligence-humans-and-ai-are-joining-forces

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  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>