How Can We Prepare for the Technological Disruption of Jobs and

Should We?  

April 23, 2014 Gary E. Marchant, Ph.D., J.D.

gary.marchant@asu.edu

Benefits of Technology

• Science and technology have provided many important benefits to our country:– Economic growth– Increased productivity– Quality of life– Health and longevity– Food quality and abundance– Information and communication capabilities– Eliminating dangerous and mundane jobs

Many Exciting and BeneficialEmerging Technologies

• Robotics• Artificial intelligence• Biotechnology• Personalized medicine • Internet of things• Autonomous vehicles• Green chemistry• Sustainable energy• Mobile communication

and health technologies

• Nanotechnology• 3d Printers• Big data• Synthetic biology• Applied neuroscience• Cognitive enhancement• Wearable technologies• Virtual reality• Regenerative medicine• Drones

Technological Unemployment

• Long-standing and largely overblown concerns that technology would displace jobs– Ned Ludd/Luddites– Technocracy movement during the Great Depression– Shift to mechanized agriculture

• But history has shown pattern of creative destruction– Technological progress results in both job

destruction but also job creation

Historical Relationship Between Technology and Employment

• Technology has traditionally created jobs and expanded employment

National Academy of Sciences:Technology and Employment (1998)

• “Historically, technological change and productivity growth have been associated with expanding rather than contracting total employment and rising earnings. The future will see little change in this pattern….”

About to Change?

Less Optimistic Views

“47 percent of totalU.S. employment is at risk”

“The Great Uncoupling”

• “It may seem paradoxical that faster progress can hurt wages and jobs for millions of people, but we argue that’s what’s been happening…. [C]omputers are now doing many things that used to be the domain of people only. The pace and scale of this encroachment into human skills is relatively recent and has profound economic implications.”

Machines Replacing Human Workers

• Gas station attendants• Assembly line workers• Bank tellers• Travel agents• Tax preparers• Secretaries• Call service centers• Grocery check-out clerks• Restaurant waiters• Airline check-in • Soldiers

Advantages of Machines over Human Workers

• No wages• No benefit payments• No sick days• No breaks• No human error• 168 hour work weeks• No workers comp• No complaints• No disclosures• No strikes or labor issues• No retention issues

Digital Artists

• Computer programs now exist to generate computer created art

• Digital orchestras replacing live musicians in an increasing number of venues

• Digital characters (e.g., Pixtar) increasingly replacing real actors in movies

Autonomous Cars

3D Printing and Jobs• “3D printing … has the potential to become

the biggest single disruptive phenomenon to impact global industry since assembly lines were introduced in early twentieth century America. New technologies which are currently being developed could revolutionize production techniques, resulting in a significant proportion of manufacturing becoming automated and removing reliance on large and costly work forces.”– Transport Intelligence, The Implications if 3D Printing for the Global

Logistics Industry (Aug. 2012)

Central Importance of Work

• Civilization and our individual lives organized around concept of work– “Unemployment, even if compensated is demoralizing,

degrading and dehumanizing...We need to consider work, as Dorothy Sayers put it, as ‘not, primarily, a thing one does to live, but the thing one lives to do’”• Leon Kass, The Other War on Poverty (2012)

– “Work saves a man from three great evils: boredom, vice, and need.”• Voltaire

Personal Effects of Long-Term Unemployment

• Depression• Anxiety• Poor self-esteem• Divorce• Substance abuse• Increased chronic diseases, suicide and

mortality

Social Disruption?• “Jobs are the primary mechanism

through which income – and hence purchasing power – is distributed to the people who consume everything the economy produces. If at some point, machines are likely to permanently take over a great deal of the work now performed by human beings, then that will be a threat to the very foundation of our economic system.”– Martin Ford, The Lights in the Tunnel

Societal Consequences of Growing Long-Term Unemployment

• “Hollowing out” of economy• Growing division between “haves” and “have nots”• Spiraling economic displacement as fewer and

fewer people can afford to participate in markets• Generational conflicts• Social unrest• International destabilization

Solutions and Policies?

Some Infeasible Proposed Policies

Stopping/SlowingTechnological Progress

• Deploy precautionary principle to slow or relinquish emerging technologies (e.g., robotics, nanotechnology)

• Mandate human workers for some jobs– e.g., New Jersey – human attendant must pump gas

• Wisdom of such strategies debatable, but long-term feasibility unlikely– Delaying the inevitable – while increasing costs, depriving

consumers of convenience, and artificially prolonging jobs that are low-paying and of declining relevance

– e.g., Japan – “chasing out rooms”

Regulatory Moratorium

• Arizona – Governor imposed a moratorium on new regulations by Executive Order (with certain enumerated exceptions) in order to “promote job creation and retention in the state”

• U.S. Congress – a number of bills introduced to slow/block regulation with names like Regulation Moratorium and Jobs Preservation Act

• But empirical evidence on net impact of regulation overall on employment is equivocal

Guaranteed Minimum Income• Every citizen would be guaranteed a minimum income to

ensure essential needs covered• LBJ established National Commission on Guaranteed

Incomes • Bills in Congress in 1960s came close to passing• Milton Friedman advocated negative income tax• Humanitarian, but:

– Expensive– Politically infeasible– Bad incentives for human behavior– Corrosive effect on social fabric

Some More Promising Approaches(but no panaceas)

Boosting Job Creation

• Proven traditional strategies include:– R&D support– Providing start-up funds for small businesses– Increasing international trade– Promoting stable family environments

Encouraging Greater Worker Flexibility

• Concept of “job for life” obsolete– Creates need for continual re-training

• Growing percentage of self-employed and freelancer workers

• “Gig economy” – many workers have series of short-term, part-time jobs, often simultaneous

• Eliminate tie between employment and health care coverage

Educational Strategies

• Life-long learning and retraining– Online learning (MOOCs)

• Greater emphasis on STEM education• Shift focus of education to the types of skills that

people will have an advantage over machines– e.g., large-frame pattern recognition, ideation,

complex communication (Brynjolfsson & McAfee, 2014)

• Cognitive enhancement technologies

http://wepartypatriots.com/wp/wp-content/uploads/2014/02/11economix-degree-pew-blog480.png

Tax Policy

• Offer corporations tax credits for hiring long-term unemployed

• Alan Blinder, former vice-chair of Federal Reserve, proposed giving companies tax credit equal to ten percent of the increase in their wage payments over the previous year

• Reduction of red tape and tax credits for establishing and maintaining new or small businesses

• Reduce corporate income tax?

Legislative and Regulatory Employment Impact Statements

• Wide variety of laws requiring regulators to consider various impacts of rules– e.g., environmental impact statement – consider envt’l

impacts of different regulatory alternatives• A few states (TX, NJ, MD) now require employment

impact analysis that considers impact on jobs• Although somewhat of a paper exercise, such

impact statements could be useful for comparing alternative proposals at federal and state level

Sharing of Work:Shorter Work Week

• Downshifting workweek as equitable means of distributing work– Bills introduced in Congress to mandate a shorter

work week– Will save government some unemployment and

welfare costs; savings could be used to fund a tax deduction for employees working shorter work weeks

Other Work Sharing Proposals

• Work share programs (2 workers sharing one position)

• Mandated profit-sharing allows workers to directly participate in productivity gains

• Restrictions on overtime• Mandatory retirement age• Paid (or unpaid) sabbaticals• Longer paid vacations• Preventing work email at night and on weekends

National Service Programs

• Voluntary or mandatory 2 year government work service program for young people

• Expand existing programs (e.g. AmeriCorps) or create additional corps directed toward education, student summer service, health, environment, or emergency response

Government Work Programs

• Depression-era Civilian Conservation Corps helped to put people back to work doing useful jobs

• Much work needs to be done that current market forces will not pay for– e.g., environmental cleanup, infrastructure, inner city

redevelopment, elderly and sick care• Expensive, but better value for government than

payments and better for worker morale and interest

Volunteerism

• Volunteer sector replaces market relationships• Tax deductions encourage greater

participation • By prioritizing deductions, government could

play role in guiding social economy• President Bush introduced Points of Light

Initiative

Social Wage• Move away from economic/market system to social wage

system• People rewarded for volunteer work, environmental

stewardship, continuing education, child-care, caretaking, inventive acts, art, music, and other good deeds

• Compensation and entitlements would be based on each individual’s social contribution score– Use Big Data to track

• Would require long-term and fundamental changes to social organization and reward

Other Suggestions

• “Made by humans” labeling movement (Brynjolfsson & McAfee 2014)

Conclusion:A Ray of Hope

• “The rise of intelligent machines is a moment in history. It will change many things, including our economy. But their potential is clear they will make it possible for human beings to live far better lives.”– Martin Wolf, Financial Times, Feb. 11, 2014

• Arthur C. Clarke – “The goal of the future is full unemployment, so we can play.”

• What types of leisure activities will people engage in?– Will they be happier? Or will they increasingly resort to

hedonic or destructive behaviors?– How will people economically support themselves?

Available at http://jetpress.org/v24/marchant.htm