The Relentless Pace of Automation

In MIT Technology Review, Dave Rotman discusses “The Relentless Pace of Automation”:

But many economists argue that automation bears much more blame than globalization for the decline of jobs in the region’s manufacturing sector and the gutting of its middle class…

The White House report points in particular to the current wave of AI, which it describes as having begun around 2010. That’s when advances in machine learning and the increasing availability of big data and enhanced computation power began providing computers with unprecedented capabilities such as the ability to accurately recognize images. The report says greater deployment of AI and automation could boost economic growth by creating new types of jobs and improving efficiency in many businesses. But it also points to the negative effects: job destruction and related increases in income inequality. For now at least, “less educated workers are more likely to be replaced by automation than highly educated ones.” The report notes that so far automation has displaced few higher-skill workers, but it adds: “The skills in which humans have maintained a comparative advantage are likely to erode over time as AI and new technologies become more sophisticated.”…

It is “glaringly obvious,” says Daron Acemoglu, an economist at MIT, that political leaders are “totally unprepared” to deal with how automation is changing employment. Automation has been displacing workers from a variety of occupations, including ones in manufacturing. And now, he says, AI and the quickening deployment of robots in various industries, including auto manufacturing, metal products, pharmaceuticals, food service, and warehouses, could exacerbate the effects. “We haven’t even begun the debate,” he warns. “We’ve just been papering over the issues.”….

Joel Mokyr, a leading economic historian at Northwestern University, has spent his career studying how people and societies have experienced the radical transitions spurred by advances in technology, such as the Industrial Revolution that began in the late 18th century. The current disruptions are faster and “more intensive,” Mokyr says. “It is nothing like what we have seen in the past, and the issue is whether the system can adapt as it did in the past.”

Mokyr describes himself as “less pessimistic” than others about whether AI will create plenty of jobs and opportunities to make up for the ones that are lost. And even if it does not, the alternative—technological stagnation—is far worse. But that still leaves a troubling quandary: how to help the workers left behind. “There is no question that in the modern capitalist system your occupation is your identity,” he says. And the pain and humiliation felt by those whose jobs have been replaced by automation is “clearly a major issue,” he adds. “I don’t see an easy way of solving it. It’s an inevitable consequence of technological progress.”…

Some observers, spearheaded by a clique of Silicon Valley insiders, have begun arguing for a universal basic incomeas a way to help those unable to find work. Wisely, the White House report rejects such a solution as “giving up on the possibility of workers’ remaining employed.” As an alternative, Muro proposes what he calls a “universal basic adjustment benefit.” Unlike the universal basic income, it would consist of targeted benefits for those seeking new job opportunities. It would provide such support as wage insurance, job counseling, relocation subsidies, and other financial and career help….

One problem the growing adoption of AI could make much worse is income inequality (see “Technology and Inequality”) and the sharp divisions between the geographic areas that benefit and those that don’t. We don’t need the expert-written White House report to tell us that the impact of digital technologies and automation in large swaths of the Midwest is very different from the effects in Silicon Valley. A post-election analysis showed that one of the strongest predictors of voting behavior was not a county’s unemployment rate or whether it was wealthy or poor but its share of jobs that are “routine”—economists’ shorthand for ones that are easily automated. Areas with a high percentage of routine jobs overwhelmingly went for Donald Trump and his message of turning back the clock to “make American great again.”

The economic anxiety over AI and automation is real and shouldn’t be dismissed. But there is no reversing technological progress. We will need the economic boost from these technologies to improve the lackluster productivity growth that is threatening many people’s financial prospects. Furthermore, the progress AI promises in medicine and other areas could greatly improve how we live. Yet if we fail to use the technology in a way that benefits as many people as possible (see “Who Will Own the Robots?”), we risk fueling public resentment of automation and its creators. The danger is not so much a direct political backlash—though the history of the Luddites suggests it could happen—but, rather, a failure to embrace and invest in the technology’s abundant possibilities.

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