Here’s a paradox you don’t hear much about: despite a century of creating machines to do our work for us, the proportion of adults in the US with a job has consistently gone up for the past 125 years. Why hasn’t human labor become redundant and our skills obsolete? In this talk about the future of work, economist David Autor addresses the question of why there are still so many jobs and comes up with a surprising, hopeful answer. (TED official site)
Who is he
David Autor, one of the leading labor economists in the world and a member of the American Academy of Arts and Sciences, is Ford Professor of Economics and associate department head of the Massachusetts Institute of Technology Department of Economics. He is also Faculty Research Associate of the National Bureau of Economic Research, Research Affiliate of the Abdul Jameel Latin Poverty Action Lab, Co-director of the MIT School Effectiveness and Inequality Initiative, Director of the NBER Disability Research Center and former editor in chief of the Journal of Economic Perspectives. He is an elected officer of the American Economic Association and the Society of Labor Economists and a fellow of the Econometric Society.(Op.cite)
Why you should view
Autor’s work focuses on earnings inequality, employment and feedback between labor market opportunities, household structure and the social/intellectual development of children. He has published extensively in many major academic journals in economics. His best known research formally models and empirically analyzes how computerization substitutes for and complements human labor; asks how the rapid rise of import competition from China has reshaped U.S. manufacturing, upending the conventional economic wisdom that free trade is a free lunch; explores how the economic pressures of globalization are reshaping U.S. electoral politics; and conducts large-scale randomized experiments that test whether generous financial aid grants improve the odds of college completion and long-run economic security of students from low income families.(Op. Cite)
- 45 years since the introduction of the automated teller machine, those vending machines that dispense cash, the number of human bank tellers employed in the United States has roughly doubled, from about a quarter of a million to a half a million. How does Autor explain this?
- We no longer dig ditches by hand, pound tools out of wrought iron or do bookkeeping using actual books. And yet, the fraction of US adults employed in the labor market is higher now in 2016 than it was 125 years ago, in 1890, and it’s risen in just about every decade in the intervening 125 years. This poses a paradox. Our machines increasingly do our work for us. Why doesn’t this make our labor redundant and our skills obsolete? Why are there still so many jobs? Having seen the talk what is your explation?
- Two fundamental economic principles are at stake. One has to do with human genius and creativity. The other has to do with human insatiability, or greed, if you like. I’m going to call the first of these the O-ring principle, and it determines the type of work that we do. The second principle is the never-get-enough principle, and it determines how many jobs there actually are. Explain these ideas to someone
- In general, automating some subset of tasks doesn’t make the other ones unnecessary. In fact, it makes them more important. It increases their economic value. In what way does this happen?
- The O-ring production function conceives of the work as a series of interlocking steps, links in a chain. Every one of those links must hold for the mission to succeed. The reason the O-ring was critical to space shuttle Challenger is because everything else worked perfectly. How is that important in an economy that mixes automation and human skills and creativity?
- The US has added 14 million jobs since the depths of the Great Recession. The challenge is that many of those jobs are not good jobs, and many citizens cannot qualify for the good jobs that are being created. Employment growth in the United States and in much of the developed world looks something like a barbell with increasing poundage on either end of the bar. On the one hand, you have high-education, high-wage jobs like doctors and nurses, programmers and engineers, marketing and sales managers. Employment is robust in these jobs, employment growth. Similarly, employment growth is robust in many low-skill, low-education jobs like food service, cleaning, security, home health aids. Simultaneously, employment is shrinking in many middle-education, middle-wage, middle-class jobs, like blue-collar production and operative positions and white-collar clerical and sales positions. The reasons behind this contracting middle are not mysterious. Many of those middle-skill jobs use well-understood rules and procedures that can increasingly be codified in software and executed by computers. The challenge that this phenomenon creates employment polarization, knocks out rungs in the economic ladder, shrinks the size of the middle class and threatens to make us a more stratified society. On the one hand, a set of highly paid, highly educated professionals doing interesting work, on the other, a large number of citizens in low-paid jobs whose primary responsibility is to see to the comfort and health of the affluent. That is not my vision of progress, and I doubt that it is yours. What should we do to reduce the low wage, low skill end of the barbell?
- History has repeatedly offered an answer to that paradox. The first part of the answer is that technology magnifies our leverage, increases the importance, the added value of our expertise, our judgment and our creativity. That’s the O-ring. The second part of the answer is our endless inventiveness and bottomless desires means that we never get enough. There’s always new work to do. Adjusting to the rapid pace of technological change creates real challenges, seen most clearly in our polarized labor market and the threat that it poses to economic mobility. Rising to this challenge is not automatic. It’s not costless. It’s not easy. But it is feasible. And here is some encouraging news. Because of our amazing productivity, we’re rich, we can afford to invest in ourselves and in our children as America did a hundred years ago with the high school movement. Discuss this idea with someone and develop three ideas for 21st century programs like the extension of high school in the early 20th .
Making the Connection
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Journal of Economic Perspectives, 2015