Future Friday: Improvements versus Jobs

The future may depend on large improvements in productivity that may initially cost jobs.

In a recent report
economists Daron Acemoglu and Pascual Restrepo in an important new paper (pdf), explain that the future of workers may depend on how technology advances productivity. Big technological advances that really advance worker productivity may cost workers their jobs initially, but in the long run, provide opportunities for workers to make more money, albeit, probably in different fields. The authors explain from their research that what they call “so-so technologies” are the real dangers to the future of workers. These “so-so technologies” take away jobs at a slower pace, but they offer little to no replacement jobs. That is how workers lose positions with no new jobs.

According to reporter Dan Kopf, writing in Quartz:

To make their point, Acemoglu and Restrepo analyze data from the US Bureau of Labor Statistics. The data include information on the tasks people are asked to do in specific jobs. Using this task-based information, they can tell whether jobs being created are “new” types of work. They found that from 1947 to 1987, the impact of new technologies both destroying and creating jobs was relatively balanced. But from 1987 to 2017, automation displaced many workers, without creating as much new work. As a result, more people are competing for a similar set of jobs, driving down their wages.

Need better technology

What the US needs is the development of technologies that lead to better productivity on a larger scale. Not replacement technology but major innovations that create more jobs. Naturally, as economists, they offer some suggestions. According to Kopf the economists suggest:

In the US, for instance, they point out that the government subsidizes a company’s equipment purchases but taxes labor. This has the effect of making investing in so-so technologies more appealing then they would otherwise be. Getting rid of these subsidies would help. They also point to the fall in government spending on research with long-time horizons, which may help uncover the next truly revolutionary technology.

So if you are in the business of creation try to create big. Destroy jobs to create jobs.

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