Transcript Technology and Employment

How Can We Prepare for the
Technological Disruption of Jobs
and Should We?
April 23, 2014
Gary E. Marchant, Ph.D., J.D.
[email protected]
Benefits of Technology
• Science and technology have provided many
important benefits to our country:
– Economic growth
– Increased productivity
– Quality of life
– Health and longevity
– Food quality and abundance
– Information and communication capabilities
– Eliminating dangerous and mundane jobs
Many Exciting and Beneficial
Emerging Technologies
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Robotics
Artificial intelligence
Biotechnology
Personalized medicine
Internet of things
Autonomous vehicles
Green chemistry
Sustainable energy
Mobile communication
and health technologies
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Nanotechnology
3d Printers
Big data
Synthetic biology
Applied neuroscience
Cognitive enhancement
Wearable technologies
Virtual reality
Regenerative medicine
Drones
Technological Unemployment
• Long-standing and largely overblown concerns
that technology would displace jobs
– Ned Ludd/Luddites
– Technocracy movement during the Great Depression
– Shift to mechanized agriculture
• But history has shown pattern of creative
destruction
– Technological progress results in both job destruction
but also job creation
Historical Relationship Between
Technology and Employment
• Technology has traditionally created jobs and
expanded employment
National Academy of Sciences:
Technology and Employment (1998)
• “Historically,
technological change and
productivity growth have
been associated with
expanding rather than
contracting total
employment and rising
earnings. The future will
see little change in this
pattern….”
About to Change?
Less Optimistic Views
“47 percent of total
U.S. employment is at risk”
“The Great Uncoupling”
• “It may seem paradoxical that faster
progress can hurt wages and jobs for
millions of people, but we argue
that’s what’s been happening….
[C]omputers are now doing many
things that used to be the domain of
people only. The pace and scale of
this encroachment into human skills
is relatively recent and has profound
economic implications.”
Machines Replacing Human Workers
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Gas station attendants
Assembly line workers
Bank tellers
Travel agents
Tax preparers
Secretaries
Call service centers
Grocery check-out clerks
Restaurant waiters
Airline check-in
Soldiers
Advantages of Machines over Human
Workers
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No wages
No benefit payments
No sick days
No breaks
No human error
168 hour work weeks
No workers comp
No complaints
No disclosures
No strikes or labor issues
No retention issues
Digital Artists
• Computer programs now exist to
generate computer created art
• Digital orchestras replacing live
musicians in an increasing number of
venues
• Digital characters (e.g., Pixtar)
increasingly replacing real actors in
movies
Autonomous Cars
3D Printing and Jobs
• “3D printing … has the potential to
become the biggest single disruptive
phenomenon to impact global industry
since assembly lines were introduced in
early twentieth century America. New
technologies which are currently being
developed could revolutionize production
techniques, resulting in a significant
proportion of manufacturing becoming
automated and removing reliance on
large and costly work forces.”
– Transport Intelligence, The Implications if 3D Printing for the Global
Logistics Industry (Aug. 2012)
Central Importance of Work
• Civilization and our individual lives organized around
concept of work
– “Unemployment, even if compensated is demoralizing,
degrading and dehumanizing...We need to consider work,
as Dorothy Sayers put it, as ‘not, primarily, a thing one
does to live, but the thing one lives to do’”
• Leon Kass, The Other War on Poverty (2012)
– “Work saves a man from three great evils: boredom, vice,
and need.”
• Voltaire
Personal Effects of Long-Term
Unemployment
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Depression
Anxiety
Poor self-esteem
Divorce
Substance abuse
Increased chronic diseases, suicide and
mortality
Social Disruption?
• “Jobs are the primary mechanism
through which income – and hence
purchasing power – is distributed to
the people who consume everything
the economy produces. If at some
point, machines are likely to
permanently take over a great deal of
the work now performed by human
beings, then that will be a threat to the
very foundation of our economic
system.”
– Martin Ford, The Lights in the Tunnel
Societal Consequences of Growing
Long-Term Unemployment
• “Hollowing out” of economy
• Growing division between “haves” and “have
nots”
• Spiraling economic displacement as fewer and
fewer people can afford to participate in markets
• Generational conflicts
• Social unrest
• International destabilization
Solutions and Policies?
Some Infeasible Proposed
Policies
Stopping/Slowing
Technological Progress
• Deploy precautionary principle to slow or relinquish
emerging technologies (e.g., robotics, nanotechnology)
• Mandate human workers for some jobs
– e.g., New Jersey – human attendant must pump gas
• Wisdom of such strategies debatable, but long-term
feasibility unlikely
– Delaying the inevitable – while increasing costs, depriving
consumers of convenience, and artificially prolonging jobs
that are low-paying and of declining relevance
– e.g., Japan – “chasing out rooms”
Regulatory Moratorium
• Arizona – Governor imposed a
moratorium on new regulations by
Executive Order (with certain
enumerated exceptions) in order to
“promote job creation and retention in
the state”
• U.S. Congress – a number of bills
introduced to slow/block regulation with
names like Regulation Moratorium and
Jobs Preservation Act
• But empirical evidence on net impact of
regulation overall on employment is
equivocal
Guaranteed Minimum Income
• Every citizen would be guaranteed a minimum income to
ensure essential needs covered
• LBJ established National Commission on Guaranteed
Incomes
• Bills in Congress in 1960s came close to passing
• Milton Friedman advocated negative income tax
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Expensive
Politically infeasible
Bad incentives for human behavior
Corrosive effect on social fabric
Some More Promising Approaches
(but no panaceas)
Boosting Job Creation
• Proven traditional strategies include:
– R&D support
– Providing start-up funds for small businesses
– Increasing international trade
– Promoting stable family environments
Encouraging Greater Worker Flexibility
• Concept of “job for life” obsolete
– Creates need for continual re-training
• Growing percentage of self-employed and
freelancer workers
• “Gig economy” – many workers have series of
short-term, part-time jobs, often
simultaneous
• Eliminate tie between employment and health
care coverage
Educational Strategies
• Life-long learning and retraining
– Online learning (MOOCs)
• Greater emphasis on STEM education
• Shift focus of education to the types of skills that
people will have an advantage over machines
– e.g., large-frame pattern recognition, ideation,
complex communication (Brynjolfsson & McAfee,
2014)
• Cognitive enhancement technologies
Tax Policy
• Offer corporations tax credits for hiring long-term
unemployed
• Alan Blinder, former vice-chair of Federal
Reserve, proposed giving companies tax credit
equal to ten percent of the increase in their wage
payments over the previous year
• Reduction of red tape and tax credits for
establishing and maintaining new or small
businesses
• Reduce corporate income tax?
Legislative and Regulatory
Employment Impact Statements
• Wide variety of laws requiring regulators to
consider various impacts of rules
– e.g., environmental impact statement – consider
envt’l impacts of different regulatory alternatives
• A few states (TX, NJ, MD) now require
employment impact analysis that considers
impact on jobs
• Although somewhat of a paper exercise, such
impact statements could be useful for comparing
alternative proposals at federal and state level
Sharing of Work:
Shorter Work Week
• Downshifting workweek as equitable means
of distributing work
– Bills introduced in Congress to mandate a shorter
work week
– Will save government some unemployment and
welfare costs; savings could be used to fund a tax
deduction for employees working shorter work
weeks
Other Work Sharing Proposals
• Work share programs (2 workers sharing one
position)
• Mandated profit-sharing allows workers to
directly participate in productivity gains
• Restrictions on overtime
• Mandatory retirement age
• Paid (or unpaid) sabbaticals
• Longer paid vacations
• Preventing work email at night and on weekends
National Service Programs
• Voluntary or mandatory 2 year government
work service program for young people
• Expand existing programs (e.g. AmeriCorps) or
create additional corps directed toward
education, student summer service, health,
environment, or emergency response
Government Work Programs
• Depression-era Civilian Conservation Corps
helped to put people back to work doing useful
jobs
• Much work needs to be done that current market
forces will not pay for
– e.g., environmental cleanup, infrastructure, inner city
redevelopment, elderly and sick care
• Expensive, but better value for government than
payments and better for worker morale and
interest
Volunteerism
• Volunteer sector replaces market relationships
• Tax deductions encourage greater
participation
• By prioritizing deductions, government could
play role in guiding social economy
• President Bush introduced Points of Light
Initiative
Social Wage
• Move away from economic/market system to
social wage system
• People rewarded for volunteer work,
environmental stewardship, continuing
education, child-care, caretaking, inventive acts,
art, music, and other good deeds
• Compensation and entitlements would be based
on each individual’s social contribution score
– Use Big Data to track
• Would require long-term and fundamental
changes to social organization and reward
Other Suggestions
• “Made by humans” labeling movement
(Brynjolfsson & McAfee 2014)
Conclusion:
A Ray of Hope
• “The rise of intelligent machines is a moment in
history. It will change many things, including our
economy. But their potential is clear they will make it
possible for human beings to live far better lives.”
– Martin Wolf, Financial Times, Feb. 11, 2014
• Arthur C. Clarke – “The goal of the future is full
unemployment, so we can play.”
• What types of leisure activities will people engage in?
– Will they be happier? Or will they increasingly resort to
hedonic or destructive behaviors?
– How will people economically support themselves?
Available at http://jetpress.org/v24/marchant.htm