MIT Examines Work of the Future; Congress Set for November 21
Widening economic disparities in employment and wages are among the urgent topics that need to be addressed.
By Irving Wladawsky-Berger
“The world now stands on the cusp of a technological revolution in artificial intelligence and robotics that may prove as transformative for economic growth and human potential as were electrification, mass production, and electronic telecommunications in their eras.” That’s the conclusion of the MIT Task Force on the Work of the Future in its recently released interim report. The final report will be issued over the next year.
[EDITOR’S NOTE: The MIT IDE will explore this and other timely themes on the future of work with co-hosts WOTF Task Force and CSAIL at the upcoming MIT AI & the Work of the Future Congress on Nov. 21. An Unconference Workshop follows on Nov. 22 where participants can actively engage in crafting a future where innovation, inclusion, and economic opportunity is a possibility for all. Register at http://bit.ly/MITWOTF.]
The Task Force was convened in the spring of 2018 by MIT President Rafael Reif to address what may well be the most critical question of the digital economy: As emerging technologies raise aggregate economic output and the wealth of nations, will they also enable people to attain higher living standards, better working conditions, greater economic security, and improved health and longevity?
The report’s overriding conclusion is that the likelihood that AI and automation will wipe out major workforce sectors in the near future is exaggerated. However, we’ve already seen important reasons for concern, especially the rising polarization of employment and wage distribution over the past few decades, which has disproportionately benefited high-skilled professionals while reducing opportunities for mid- and low-skilled workers.
“[A] critical challenge is not necessarily a lack of jobs, but the low quality of many jobs and the resulting lack of viable careers for many people, particularly workers without college degrees.
With this in mind, the work of the future can be shaped beneficially by new policies, renewed support for labor, and reformed institutions, not just new technologies. Broadly, the task force concludes, capitalism in the U.S. must address the interests of workers as well as shareholders.”
Let me briefly discuss some of the report’s key findings and recommendations.
The Paradox of the Present.
“Most advanced economies are enjoying an unprecedented, broad based jobs boom,” wrote The Economist in a May, 2019 article. Two-thirds of the 36 OECD member countries have record-high employment. The U.S. unemployment rate remains at a near-historic low of 3.7%, while wages have also been increasing across the economy.
Yet, as The Economist notes, many throughout the industrialized world feel underpaid, exploited, and pessimistic about a future where intelligent machines threaten to make them unemployable. Other surveys have similarly found a widespread belief that advanced technologies will replace much of the work now done by humans. “There is just one problem with this bleak picture: It is at odds with reality,” says The Economist. “The zeitgeist has lost touch with the data.”
According to the MIT Task Force, while these fears are greatly exaggerated, they’re neither ill-informed nor misguided.
Recent history has shown that there’s ample reason to be concerned about the impact of technological advances on large segments of the workforce. Whether the impact will turn out to be positive or negative depends on many factors, especially societal investments in education and public/private leadership.
For example, demographic trends point toward rising labor scarcity in the U.S. and most other industrialized countries due to declining fertility, an aging population, and restrictive immigration policies. The growth rate of the U.S. labor force fell from 1.2% per year between 1996 and 2006 to 0.5% per year between 2006 and 2016, and is projected to continue at this low rate over the next decade. The U.S. Bureau of Labor Statistics projects that the share of workers 55 and over will rise from 16.8% to 24.8% between 2006 and 2026, while the share of prime age workers (25–54) will fall by 5%.
“These demographic shifts will impose steep burdens on national budgets as the ratio of retirees to workers rises and as the growth rate of working-age taxpayers slows. But these shifts also offer an opportunity: countries that make well-targeted, forward-looking investments in education and skills training should be able to deliver middle-skill jobs with favorable earnings and employment security to the vast majority of their workers — and not exclusively to those with elite educations.”
Is This Time Different?
Fears that machines will put humans out of work are not new. Throughout the Industrial Revolution there were periodic panics about the impact of automation on jobs, going back to the so-called Luddites — textile workers who in the 1810s smashed the new machines that were threatening their jobs.
Automation anxieties continued to resurface in the 20th century, right along with advances in technology. In a 1930 essay, English economist John Maynard Keynes wrote about the onset of “a new disease” which he named technological unemployment, that is, “unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.”
But, in the end, these fears didn’t come to pass. Given that technologies have been automating human work for the past couple of centuries — why hasn’t automation already wiped out a majority of jobs? Why are there still so many jobs left?
The answer isn’t very complicated, although frequently overlooked, explained MIT economist and Task Force co-chair David Autor in a 2015 paper. Automation does indeed substitute for labor. However, automation also complements labor, raising economic outputs in ways that often lead to higher demand for workers. “[J]ournalists and even expert commentators tend to overstate the extent of machine substitution for human labor and ignore the strong complementarities between automation and labor that increase productivity, raise earnings, and augment demand for labor.”
Automation fears have understandably accelerated in recent years, as our increasingly smart machines are now being applied to activities requiring intelligence and cognitive capabilities that not long ago were viewed as the exclusive domain of humans. While the majority of economists wave such fears away, we don’t really know whether this time might be different.
How are job markets likely to evolve in our 21st century digital economy? The digital era differs from prior waves of automation in a few important respects, said the MIT Task Force: labor market polarization has spurred growth of high-skill, high-wage and low-skill, low-wage jobs at the expense of mid-skill, mid-wage jobs; rising inequality has concentrated earning growth among the most educated, highest-skilled workers while the earnings growth for most everyone else has lagged; and low productivity technologies have displaced many categories of work previously done by less educated workers.
“Americans are right to be worried… If the advent of ubiquitous robotics and artificial intelligence heralds another era like the recent past, popular concerns will be amply justified. The obvious next question, and the question that animates the work of the Task Force, is, what can be done about it?
Despite the sobering record of the last 40 years, our research argues against fatalism and in favor of tempered optimism. Better work and broadly shared prosperity are not assured, but both are feasible, and technological advances make them more, and not less attainable.”
Policy Proposals for the Future
Foremost among the recommendations is the urgent need to provide workers with the skills required to meet these technology and workforce challenges, especially workers without a four-year college degree who have disproportionately borne the brunt of automation. Post-secondary education and training venues— e.g., community colleges, apprenticeships, online education, industry-specific training programs— are likely to be most relevant and accessible to these workers.
However, the report adds that education and training won’t be enough given the demands for career-long adult learning. A better understanding of what kind of learning is most effective for adults is required. “Although new technology can support novel learning experiences, from personalized instruction to virtual reality displays, it is unclear what practices actually facilitate learning for adults… It is highly likely that technology can promote adult learning, but it is not yet known what principles guide the implementation of effective adult learning.”
Finally, the report cautions that “hoping that if we skill them, jobs will come, is an inadequate foundation for constructing a more productive and economically secure labor market.”
Thus, alongside education and training, the Task Force recommends four broad areas where concerted public and private action are essential to shaping the future of work:
- Rebalance fiscal policies away from subsidizing investment in physical capital and toward catalyzing investment in human capital;
- Restore the role of workers as stakeholders, alongside owners and stockholders, in corporate decision-making;
- Foster technological and organizational innovation to complement workers; and
- Reinvigorate America’s leadership position in technology and innovation.
“By taking bold actions to invest in its people, lead in innovation, and protect and augment workers, the United States can cultivate this historic opportunity to generate broadly shared prosperity.”
This blog was first posted here.