The Economist: Automation and Anxiety

Source: The Economist, Jun 2016
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What determines vulnerability to automation, experts say, is not so much whether the work concerned is manual or white-collar but whether or not it is routine. Machines can already do many forms of routine manual labour, and are now able to perform some routine cognitive tasks too.

Economists are already worrying about “job polarisation”, where middle-skill jobs (such as those in manufacturing) are declining but both low-skill and high-skill jobs are expanding. In effect, the workforce bifurcates into two groups doing non-routine work: highly paid, skilled workers (such as architects and senior managers) on the one hand and low-paid, unskilled workers (such as cleaners and burger-flippers) on the other.

… in the past technology has always ended up creating more jobs than it destroys. That is because of the way automation works in practice, explains David Autor, an economist at the Massachusetts Institute of Technology. Automating a particular task, so that it can be done more quickly or cheaply, increases the demand for human workers to do the other tasks around it that have not been automated.

… while it is easy to see fields in which automation might do away with the need for human labour, it is less obvious where technology might create new jobs. “We can’t predict what jobs will be created in the future, but it’s always been like that,” says Joel Mokyr, an economic historian at Northwestern University. Imagine trying to tell someone a century ago that her great-grandchildren would be video-game designers or cybersecurity specialists, he suggests. “These are jobs that nobody in the past would have predicted.”

Focusing only on what is lost misses “a central economic mechanism by which automation affects the demand for labour”, notes Mr Autor: that it raises the value of the tasks that can be done only by humans. Ultimately, he says, those worried that automation will cause mass unemployment are succumbing to what economists call the “lump of labour” fallacy. “This notion that there’s only a finite amount of work to do, and therefore that if you automate some of it there’s less for people to do, is just totally wrong,” he says. Those sounding warnings about technological unemployment “basically ignore the issue of the economic response to automation”, says Mr Bessen.

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