Advanced Computing in the Age of AI | Wednesday, December 7, 2022

Is Automation to Blame for Our Economic Woes? 

<img style="float: left;" src="" alt="" width="95" height="71" border="0" />Despite reassurances of automation professionals throughout the industry, some experts simply aren't convinced that technological advancements in robotics and automation aren't negatively impacting U.S. employment rates, which is what Erik Brynjolfsson and Andrew McAfee of the MIT Sloan School of Management have been arguing over the past year and a half.

Despite reassurances of automation professionals throughout the industry, some experts simply aren't convinced that technological advancements in robotics and automation aren't negatively impacting U.S. employment rates.

The common claim is that for a given automation technology that a company plans to adopt, the workers being displaced will be given new jobs within that department, often revolving around maintaining the new automation equipment.

Erik Brynjolfsson, professor at the MIT Sloan School of Management and his collaborator Andrew McAfee are among the skeptics, and have been arguing over the past year and a half that because of these advancements, job prospects are looking bleak not only in manufacturing, but in clerical work, retail, as well as professions in law, financial services, education and medicine.

Their claim, which might seem obvious enough to some, is made even more grave when you look past the obvious fact that robots are capable of replacing human workers. Looking even deeper, the pair believes that not only are robots taking over jobs, but they are doing so at a greater rate than they create them, which would ultimately shrink the workforce and contribute to economic stagnation and growing socioeconomic inequality.

Adding support to Brynjolfsson and McAfee's claim is a chart of productivity versus employment in the U.S. over the past century, where productivity was defined as the amount of economic value generated by a unit of labor over time. Following World War II, the line tracking productivity held near to the line tracking employment, and a steady rise in one was mirrored by the other. But around 2000, the lines began down separate paths, with productivity rising while employment fell—a moment that Brynjolfsson and McAfee call “the great decoupling.”

Brynjolfsson says he is confident that technological advancements are behind both post-2000 trends.

In addition, Brynjolfsson pointed to another chart illustrating a falling median income associated with a rising GDP.

“It's the great paradox of our era,” Brynjolfsson said in an interview with MIT Technology Review. “Productivity is at record levels, innovation has never been faster, and yet at the same time, we have a falling median income and we have fewer jobs. People are falling behind because technology is advancing so fast and our skills and organizations aren't keeping up.”

While the impressive automation systems that began transforming our factories back in the 80's are an obvious example to support the authors' claims, there are plenty of white collar, clerical jobs that have also become obsolete, and could potentially have a greater impact on nationwide employment.

Granted, as MIT Technology Review's David Rotman pointed out, it's quite possible that the authors' estimates of innovation are in fact overestimates.

Among the skeptics is David Autor, an economist at MIT who doubts that technology could be behind such a shift, and actually doubts that productivity gains are as significant as Brynjolfsson claims. “There was a great sag in employment in 2000. Something did change,” Autor said. “But no one knows the cause.”

Autor did say that computer technologies are changing the array of available jobs, but those changes “are not always for the good.” He noted computer takeover of jobs in bookkeeping, clerical work and repetitive manufacturing positions since the 1980s, whereas openings higher-paying jobs that require more creativity are growing, and low-skill service jobs aren't seeing much of an impact from such technological advancements. The result, said Autor, is a polizarized workforce and a “hollowing out” of the middle class.

But is there anything we can actually do about it?

In an interview with Rotman, McAfee described Google's fleet of driverless cars with “a certain awe,” despite following it up with warnings about how such innovations could be hurting the economy. “I would like to be wrong,” McAfee said, “but when all these science-fiction technologies are deployed, what will we need all the people for?”

So even if we understand what's happening, it looks extremely unlikely that we would attempt to slow innovations in automation technologies—and why would we? Such advancements have helped manufacturers of all sizes to boost quality and production. But if Brynjolfsson and McAfee are right, where does that leave us?

It's possible that the economy is in a state of shock as employers adjust job descriptions to better complement their automation technologies, and if that's the case employment is likely to rebound. After all, robots for manufacturing were meant to make human work more efficient, and if they could in fact replace a human worker, the idea was for the company to then be able to expand to ultimately hold the same number of employees, if not more.

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