The Future of Work
October 29, 2018
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.” 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. 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. 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.
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.” Additionally, the Trump Administration has supported existing federal programs including but not limited to: STEM+C, CS for All, GAANN, and NSF Graduate Fellowships. 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. 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. 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.
Additional Blog Posts