MIT Economics Professor David Autor
MIT Technology Review’s EmTech Next
Artificial Intelligence (AI) and automation promise to usher in a new era of inexpensive goods, effortless personalization, and freedom from tedium. Yet beneath the surface of innovation a current of economic disenfranchisement threatens to sweep society away. This week business leaders, policy makers and researchers convened at the MIT Media Lab for EmTech Next to discuss how to wrangle in exponential technological changes without breaking the economy as we know it.
Lockheed Martin uses augmented reality in the construction of its new Orion spacecraft. Technicians don the Microsoft Hololens and see an overlay detailing exactly which piece from among of thousands goes where. Shelley Peterson, Lockheed's Head of Emerging Technologies, reported that the preliminary use cases result in over 90% reduction in touch labor, turning what once took multiple techs multiple shifts into work that one person can do in a matter of hours. This case is one among multitudes echoing the tune of technological streamlining. Efficiency improvements, automation, and shifts to lower priced labor markets must be embraced by countries looking for competitive advantage. But they must go hand in hand with mechanisms that support displaced workers.
Lockheed Martin AR
Lockheed Martin
Over 2% of Americans - 7 million people - lost their jobs in mass layoffs between 2004-2009. Workers without a college degree are particularly at risk. As production met automation and moved overseas, the broader citizenry enjoyed cheaper products while large sectors of the workforce were left with a loss of livelihood. Harvard Fellow in Technology and Public Purpose Susan Winterberg shared that laid-off workers typically see a permanent 17-30% reduction in wages when they return to the workforce. If they don’t re-enter the job market within two months, resume callbacks drop dramatically and many are left with no choice but to join the gig economy as contractors without benefits. They are predisposed to suffering from a menagerie of woes, from depression to marital problems. Their children are even 15% more likely to repeat a grade in school.
From 1970 to 2015, adults without a college education have seen the job market for mid skill positions plummet (red arrow), while low-skill, typically lower-paying jobs (blue arrow) are on the rise.
David Autor, MIT
Disenfranchised workers are rightfully angry and express it with their vote. David Autor, MIT Professor of Economics, et al. finds that we are Importing Political Polarization. Both Republican and Democrat districts that were heavily impacted by automation and outsourcing tended to oust moderate congressional representatives in favor of more conservative or liberal ones, respectively. Furthermore, the researchers found that “in presidential elections, counties with greater trade exposure shifted towards the Republican candidate.” The politician who promises to Make America Great Again speaks the right language, offering nationalistic sentiment and relief for those caught in the technological crossfire of the inevitable future. But in the words of Benjamin Franklin, "well done is better than well said." In this regard, workers need action.
What to do? Winterberg suggests a policy of “mandatory early notification to workers. Companies should report planned workforce changes to a global automation observatory – this gives workers time to look for a job before becoming unemployed and governments/civil society time to plan for specific reskilling, tax revenue forecasting, and recruitment of new businesses.” She notes that the EU already tracks such data and stressed the importance of a worldwide observatory that tracks labor market changes due to automation. Without it, we don't really know how mechanization is changing our world.
MIT Sloan Professor Paul Osterman recommends tapping into America's 1,600 community colleges to reskill displaced workers, as these institutions effectively yield large wage increases for students. Another option may be employer or government subsidized online training and digital degree programs.
At least one thing is clear. Doing nothing is not an option. Entire industries have evaporated from the American economy. This will only expand in years to come. Rather than fight technology, we should embrace it and prepare workers whose fields move overseas or are learned by robots. Every human deserves the opportunity to learn skills that will carry him or her into the future. The alternative effectively holds disadvantaged members of our society back, building a future enjoyed by the few at the expense of the many. Both government and employers can and must do better.
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