The rapid advancements in artificial intelligence (AI) and automation are transforming industries at an unprecedented pace. While many celebrate these technologies for their potential to enhance productivity and economic growth, there is a growing need to reimagine automation. As we stand on the brink of a new era, it's crucial to consider the broader implications of these technologies on the labor market, inequality, and the overall well-being of society. This article delves into why reimagining automation is necessary and how it can be harnessed to create a more equitable and prosperous future.
The Historical Context: Technology and Labor
Historically, technological advancements have driven significant changes in the labor market. From the Industrial Revolution to the digital age, new technologies have consistently reshaped industries, creating new jobs while rendering others obsolete. Economists have long argued that technology, despite causing short-term disruption, ultimately benefits society by making the economy more productive and allowing people to move into new fields of work.
For instance, the shift from agriculture to manufacturing in the 20th century is a prime example. In 1900, 41% of U.S. workers were employed in agriculture. By 2000, that number had dropped to just 2%, thanks to mechanized farming equipment like plows and harvesters. These advancements led to a manufacturing boom, urbanization, and increased wealth, significantly improving humans' well-being.
The Cracks in the Consensus
However, the consensus that technology invariably benefits all workers is beginning to crack. Recent evidence suggests that digital technologies have contributed to rising inequality globally. As computers have made knowledge workers more productive, they have simultaneously reduced the demand for "middle-wage" jobs such as clerical work and administrative assistance. This trend has sparked a reevaluation among economists about the impact of technology and automation on labor markets.
MIT's Daron Acemoglu and Boston University's Pascual Restrepo highlight that technological improvements, while increasing productivity, can also reduce wages for all workers—a point often overlooked. This new perspective challenges the traditional view that technological change is always "somewhere between benign and benevolent."
The Need for a New Approach
The updated economics of automation retains the core idea that technology can boost worker productivity and wages in the long run. However, it also raises two critical points: the difference between automating existing work and creating entirely new capabilities, and the influence of decision-makers on how technology is used.
- Automation vs. Creation:
Automating existing tasks can lead to job displacement without necessarily creating new opportunities. In contrast, technologies that enable entirely new capabilities can create new types of work that didn't previously exist. This distinction is crucial for understanding the diverse impacts of automation on the labor market. - Decision-Making:
How technology is implemented depends significantly on who is making the decisions. For example, Hollywood writers recently negotiated a contract allowing them to decide how AI is used in scriptwriting, ensuring they receive full credit and compensation. This example underscores the importance of involving workers in decisions about technology use.
The Role of Task-Based Models
To better understand the impact of technology on work, economists have developed task-based models. These models break down jobs into individual tasks, allowing for a more nuanced view of how technology affects labor. For example, a researcher's job might include data collection, analysis, and report writing. Over time, technology might automate data collection, leaving the researcher to focus on higher-value tasks like analysis and report writing.
Task-based models like Wexa reveal the importance of expertise and the value of having machines take over low-value, repetitive tasks. However, these models initially assumed that the list of tasks was static. As research has shown, many jobs today didn't exist in the past, emphasizing that technology can create entirely new types of work.
Creating New Work: The Key to Prosperity
MIT economist David Autor found that by 2018, over 60% of employment was in job titles that didn't exist in 1940. New technologies can create new jobs directly or through increased wealth, leading to new consumer demands. This dynamic is crucial for understanding technology's impact on labor markets.
Economists Acemoglu and Restrepo formalized the idea that automation and the creation of new tasks are in a race. If displacement outpaces the creation of new work, wages can fall. Therefore, reimagining automation means focusing on creating new types of work that utilize human skills and expertise.
The Importance of Worker Input
Ensuring that workers have a voice in how technology is used is essential for fostering a positive impact on the labor market. Input from workers can help steer companies toward more productive and worker-friendly uses of AI. It can also guard against "so-so technology"—technologies that automate tasks just enough to replace workers without significantly boosting productivity.
Unions and other worker organizations play a crucial role in this process. By advocating for fair wages and working conditions, they can ensure that the benefits of automation are shared more equitably. For example, John Van Reenen of the London School of Economics argues that unions can help workers claim a share of the profits generated by new technologies, fostering a more balanced approach to automation.
Policy Implications
The evolving models of automation have significant implications for policymakers. In the past, the focus was on increasing education levels to meet the demands of new technologies. Today, the emphasis is shifting towards creating new work and ensuring that workers have a say in how technology is implemented.
Governments and institutions need to support policies that encourage the creation of new types of work and provide workers with the skills needed to thrive in a rapidly changing job market. This might include investing in education and training programs, supporting innovation and entrepreneurship, and promoting inclusive decision-making processes.
End Notes
Reimagining automation is not just about improving productivity or economic growth—it's about creating a future where technology works for everyone. By focusing on creating new types of work, involving workers in decision-making, and supporting policies that promote equitable growth, we can harness the potential of AI and automation to build a more prosperous and inclusive society. The key is to ensure that as we advance technologically, we also advance socially, ensuring that no one is left behind.