Will the Workplace of the Future Have any Workers?
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Transcript of Will the Workplace of the Future Have any Workers?
Will the Workplace of the Future Have any Workers? Automation Anxiety
Returns
David Autor, MIT and NBER IRPP-CLSRN Inequality Conference February 25, 2014
An Era of Technology Anxiety
An Era of Technology Anxiety
“…If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets.”
Are We Entering the ‘PC Era’ of Workplace Robotics?
Are We Entering the ‘Terminator Era’ of Robotics?
iRobot Warrior 710 with weapon accessory
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. Not enough jobs versus the ‘wrong’ jobs
4. Beyond the “lump of labor” fallacy
5. Is the challenge scarcity or abundance?
.55
.6.6
5.7
Labo
r Sha
re
1975 1985 1995 2005 2015
United States
.55
.6.6
5.7
Labo
r Sha
re
1975 1985 1995 2005 2015
Japan.3
5.4
.45
.5La
bor S
hare
1975 1985 1995 2005 2015
China
.55
.6.6
5.7
Labo
r Sha
re
1975 1985 1995 2005 2015
Germany
Figure 2: Declining Labor Share for the Largest Countries
Notes: The figure shows the labor share and its linear trend for the four largest economies in the world from 1975.
36
Declining Labor Share of Value Added in Four Large Economies, 1975 - 2010
Karabarbounis and Neiman, 2014
U.S. Employment to Population Rates, 1974 - 2014
Males
Females
35#%#
40#%#
45#%#
50#%#
55#%#
60#%#
65#%#
70#%#
75#%#
80#%#
1974# 1979# 1984# 1989# 1994# 1999# 2004# 2009# 2014#
Males& Females&
Canadian Employment to Population Rates, 1976-2013
Males
Females
35#%#
40#%#
45#%#
50#%#
55#%#
60#%#
65#%#
70#%#
75#%#
80#%#
1974# 1979# 1984# 1989# 1994# 1999# 2004# 2009# 2014#
Males& Females&
U.S. Real GDP vs. Median Income per Capita, 1960-2011
Brynjolfsson and McAfee, 2014
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. The record so far
4. Not enough jobs versus the ‘wrong’ jobs
5. Beyond the “lump of labor” fallacy
6. Is the challenge scarcity or abundance?
An Earlier Era of Technology Anxiety
Ned Ludd “Machine Trashing”
1812 – 1813
Technology Anxiety in the 1960s
The ‘Automation Crisis’ of 1964 • President Johnson establishes “Blue-Ribbon National Commission
on Technology, Automation, and Economic Progress” • “Leisure, thought by many to be the epitome of paradise, may well
become the most perplexing problem of the future.”
AU
TOM
ATION
AN
XIET
Y
THE WILSON QUARTERLY SUMMER 2013
argued that rapid technological change had supercharged productivity in ag-riculture and manufacturing, and now threatened “a whole new group of skills—the sorting, filing, checking, calculat-ing, remembering, comparing, okaying skills—that are the special preserve of the office worker.”
Ultimately, Heilbroner warned, “as machines continue to invade society, duplicating greater and greater num-bers of social tasks, it is human labor itself—at least, as we now think of ‘la-bor’—that is gradually rendered redun-dant.” Heilbroner was not the biggest
A year after the Milwaukee-Matic’s star turn, Lyndon B. Johnson took time from his many troubles—Vietnam, ur-ban unrest—to create the blue-ribbon National Commission on Technology, Automation, and Economic Progress. The New York Times took the enter-prise seriously enough to name all the commission members in its pages. The Public Interest, which would become one of the most influential intellectual journals of the postwar era, took up the automation crisis in its debut issue the next year. In one of the essays, the prom-inent economist Robert Heilbroner
COURTESY MAG CINCINNATI
The Milwaukee-Matic industrial machining tool was not computerized, but the ability to have an operator feed it instructions on long strips of punched paper tape was one of its great innovations.
The Milwaukee-Matic industrial machining tool, 1963
1964 ‘Ad-Hoc Committee on the Triple Revolution’
• Open letter to President Johnson ‘66 “The traditional link between jobs and incomes is being broken… The economy of abundance can sustain all citizens in comfort and economic security whether or not they engage in what is commonly reckoned as work.” − Key members Jacob Heilbroner, Linus Pauling, Gunnar Myrdal
A Long History of Popular Anxiety… vs. Traditional Economic View
1. Technological change is a win-‐win • The only free lunch that economists can believe in (Mokyr, 1990)
2. Labor demand is unlimited
• “One of the best-‐known fallacies in economics is the notion that there is a @ixed amount of work to be done—a lump of labor—which can be shared out in different ways to create fewer or more jobs.”
3. Those who fear technological change are “Luddites”
The Lump of Labor Fallacy
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. The record so far
4. Not enough jobs versus the ‘wrong’ jobs
5. Beyond the “lump of labor” fallacy
6. Is the challenge scarcity or abundance?
66
100 Years of U.S. Consumer Spending
The sources of incomes changed,too. In 1901, the average U.S. familyreceived 90.5 percent of its income fromthe earnings of family members, with9.5 percent of these earnings contrib-uted by children. By the 21st century,only 80.7 percent of family income camefrom the direct earnings of family mem-bers. Interestingly, in 2002-03 in NewYork City and Boston, family earningsconstituted a greater proportion ofhousehold income than they did in thecountry as a whole. In New York City,family members’ earnings contributed85.0 percent to total household income;in Boston, family earnings contributed89.0 percent.
During the 100-year period, house-hold expenditure patterns also demon-strated great variability. In 1901, theaverage U.S. household had $769 inexpenditures. By 2002–03, these expen-ditures had increased 53-fold, to$40,748. Over the same period, expen-ditures in New York City had increased62-fold, from $814 to $50,319, while in
Boston, the increase was 48-fold, from$880 to $41,814. (See chart 39.)
In real dollars, calculated with 1901as the base, expenditures also demon-strated a notable increase. In 1901, asnoted, the average U.S. family had $769in expenditures. By 2002–03, thatfamily’s expenditures would have risento $1,848, a 2.4-fold increase. In NewYork City the increase would have been2.8-fold, from $814 to $2,283; in Bostonthe increase would have been 2.2-fold,from $880 to $1,897. (See chart 40.)
The material well-being of familiesin the United States improved dramati-cally, as demonstrated by the changeover time in the percentage of expendi-tures allocated for food, clothing, andhousing. In 1901, the average U.S. fam-ily devoted 79.8 percent of its spend-ing to these necessities, while familiesin New York City spent 80.3 percent,and families in Boston allocated 86.0percent. By 2002–03, allocations on ne-cessities had been reduced substan-tially, for U.S. families to 50.1 percent
of spending, for New York City familiesto 56.7 percent, and for Boston familiesto 53.8 percent. (See chart 41.)
The continued and significant de-cline over the century in the share ofexpenditures allocated for food alsoreflected improved living standards. In1901, U.S. households allotted 42.5 per-cent of their expenditures for food; by2002–03, food’s share of spending haddropped to just 13.2 percent. For NewYork City households, the expenditureshare had declined from 43.7 percentto 13.9 percent; for Boston households,the decline was from 41.7 percent to13.5 percent. (See chart 42.)
Beginning in the 1970s, anothertrend emerged in spending for food. Atthe time, the average U.S. family allo-cated 72.4 percent of food expendituresfor food eaten at home and 26.4 per-cent for food eaten away from home.In New York City, a similar pattern held:households allocated 72.2 percent oftheir food spending for food eaten athome and 26.7 percent for food eaten
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
1901 1918-19 1934-36 1950 1960-61 1972-73 1984-85 1996-97 2002-03
United States
Boston
New York City
Chart 38. Income deflated to 1901 for the United States, New York City, and Boston
SOURCE: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey
Over the Course of a Century… Six-Fold Rise in Real Incomes, 1901 - 2002
Over the Course of a Century… Share of Income Spent on Necessities Falls from 85% to 55%
68
100 Years of U.S. Consumer Spending
away from home. Boston family foodexpenditure patterns were different,with 66.1 percent of food spending al-located for food at home and 33.5 per-cent allocated for food eaten away fromhome.
By the 21st century, however, theaverage U.S. family allocated just 58.1percent of food spending for food eatenat home and 41.9 percent for food eatenaway from home. Similar patterns ex-isted in New York City and in Boston:the allocations in New York City were54.4 percent and 45.6 percent, respec-tively; in Boston, they were 58.7 per-cent and 41.3 percent.
Changes in diets also occurred overthe 100-year period. In 1901, New YorkCity families allocated 40.4 percent oftheir grocery expenditures for meat,poultry, fish, and eggs; 16.3 percent fordairy products; 14.5 percent for fruitsand vegetables; and 11.0 percent forcereals and bakery products. AmongBoston families, the allocations forthese four categories of items were 48.4
percent, 17.5 percent, 8.3 percent, and9.2 percent, respectively.
By 2002–03, grocery expenditureshares for meat, poultry, fish, and eggshad decreased to 28.3 percent in NewYork City and to 27.2 percent in Bos-ton. Shares for dairy products had de-creased to 10.4 percent in New York Cityand 10.8 percent in Boston; shares forfruits and vegetables had increased to19.2 percent in New York City and 17.0percent in Boston; and shares for cere-als and bakery products had increasedto 15.0 percent in both cities.
Home ownership shifted markedly.In 1901, 19 percent of Americans ownedtheir home, while in 2002–03, 67 per-cent of U.S. families did. In 2002–03,56 percent of New York City householdsowned their home, while in Boston, theshare was greater: 59 percent.
With greater home ownership andhigher housing costs, in the 1960s fam-ily spending for housing became themost significant item in household bud-gets, displacing spending on food.
Spending for shelter constituted thesingle largest segment of the averagefamily’s housing expenditures: 62.5 per-cent in the country as a whole, 62.7 per-cent in New York City, and 66.8 percentin Boston.
Forty years later, in 2002–03, sheltercosts represented 19.3 percent of totalhousehold expenditures in the coun-try as a whole, 24.6 percent in New YorkCity, and 24.3 percent in Boston. Inother words, 1 out of every 4 dollarsspent by New York City and Bostonfamilies went for shelter.
With the rise in expenditures forshelter came an increase in spendingfor utilities. In the 1970s, the averageU.S. family allotted 4.9 percent of totalspending for utilities; the average NewYork City family, 3.8 percent; and theaverage Boston household, 4.9 per-cent. By 2002–03, shares of totalspending for utility costs were 6.7 per-cent, 6.1 percent, and 6.4 percent.
Over the 100-year period, expendi-ture shares for clothing steadily de-
50
55
60
65
70
75
80
85
90
1901 1918-19 1934-36 1950 1960-61 1972-73 1984-85 1996-97 2002-03
Percent
United States
Boston
New York City
Chart 41. Food, clothing, and housing expenditure shares for the United States, New York City, and Boston
SOURCE: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey
Not One but Two Technological Revolutions: The Green Revolution and the Industrial Revolution
Johnston 2012
68%
22%
10%
40%
27%
33%
11%
37%
52%
2%
20%
78%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Agriculture Industry Services
U.S. Employment Shares in Agriculture, Industry and Services, 1840 - 2010
1840 1900 1950 2010
Automation of ‘Routine Tasks:’ Jacquard Loom (1801)
Automation of ‘Routine Tasks:’ Milwaukee-Matic Industrial Machining Tool, 1963
The Milwaukee-Matic industrial machining tool, 1963
AU
TOM
ATION
AN
XIET
Y
THE WILSON QUARTERLY SUMMER 2013
argued that rapid technological change had supercharged productivity in ag-riculture and manufacturing, and now threatened “a whole new group of skills—the sorting, filing, checking, calculat-ing, remembering, comparing, okaying skills—that are the special preserve of the office worker.”
Ultimately, Heilbroner warned, “as machines continue to invade society, duplicating greater and greater num-bers of social tasks, it is human labor itself—at least, as we now think of ‘la-bor’—that is gradually rendered redun-dant.” Heilbroner was not the biggest
A year after the Milwaukee-Matic’s star turn, Lyndon B. Johnson took time from his many troubles—Vietnam, ur-ban unrest—to create the blue-ribbon National Commission on Technology, Automation, and Economic Progress. The New York Times took the enter-prise seriously enough to name all the commission members in its pages. The Public Interest, which would become one of the most influential intellectual journals of the postwar era, took up the automation crisis in its debut issue the next year. In one of the essays, the prom-inent economist Robert Heilbroner
COURTESY MAG CINCINNATI
The Milwaukee-Matic industrial machining tool was not computerized, but the ability to have an operator feed it instructions on long strips of punched paper tape was one of its great innovations.
Two Centuries of Productivity Growth in Computing: 2+ Trillion Fold Decline in Cost of Computing v. Labor
Nordhaus 2007
Information Technology Accounted for ~40% of Business Investment as of 2010
0.00#
0.04#
0.08#
0.12#
0.16#
0.20#
0.24#
0.28#
0.32#
0.36#
0.40#
1959# 1962# 1965# 1968# 1971# 1974# 1977# 1980# 1983# 1986# 1989# 1992# 1995# 1998# 2001# 2004# 2007# 2010#
Informa4on#Processing#Equipment#+#SoBware#Share#of#All#Private#NonIResiden4al#Investment,#1959#I#2010#(Source:#BEA#NIPA)#
Substitution, Complementarity: Tasks and Technology
Task
Descrip,on
Example Occupa,ons
Poten,al Impact of Computeriza,on
Rou,ne Tasks • ‘Rules-‐based’ • Repe//ve • Procedural
• Bookkeepers • Assembly line workers
• Direct Subs/tu/on
Abstract Tasks • Abstract problem-‐solving • Mental flexibility
• Scien/sts • ADorneys • Managers • Doctors
• Strong Complementarity
Manual Tasks • Environmental Adaptability • Interpersonal Adaptability
• Truck drivers • Security guards • Flight aDendants • Home health aides • Waiters • Cleaners
• Limited Complementarity or Subs/tu/on
U.S. Job Task Input by Education Group in 1980
HS D
ropouts
HS D
ropouts
HS D
ropouts
HS G
raduates
HS G
raduates
HS G
raduates
Some C
ollege
Some C
ollege
Some C
ollege
College G
rads
College G
rads
College G
rads
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Manual Tasks Abstract Tasks Routine Tasks
U.S. Task Input by Education Group, 1980 Averages
Autor, Levy and Murnane, 2003
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. The record so far
4. Not enough jobs versus the ‘wrong’ jobs
5. Beyond the “lump of labor” fallacy
6. Is the challenge scarcity or abundance?
Employment Polarization, 1979 – 2010 Percent Growth in Employment by Occupation
-.2
0.2
.4.6
Personal Care
Food/Cleaning Service
Protective Service
Operators/Laborers
Production
Office/Adm
in
Sales
Technicians
Professionals
Managers
Percent Change in Employment by Occupation, 1979-2010
1979-1989 1989-19991999-2007 2007-2010
Changes in Employment Share by Job Skill Tercile, 1993-‐‑2006 Comparison of U.S. and European Union Countries
-20
-10
010
20
USA
EU Averag
e
Portug
al
Irelan
d
Finlan
d
Norway
Netherl
ands
Greece UK
Sweden
German
ySpa
in
Belgium
Denmark
Luxe
mbourg
France
Austria Ita
ly
Source: Goos, Salomons and Manning (2009)
Lower Third Middle Third
Upper Third
US v. EU Averages
EU Nations Ordered by Growth in High Skill Occupation Share
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. Not enough jobs versus the ‘wrong’ jobs
4. The record so far
5. Beyond the “lump of labor” fallacy
6. Is the challenge scarcity or abundance?
But the Luddites did have Something to Fear
Ned Ludd “Machine Trashing”
1812 – 1813
Technology Anxiety: Should We Worry?
What economic theory actually says…
a. Technological Δ raises productivity and hence national income.
b. Technological Δ is not necessarily (or even usually) Pareto improving: It creates winners and losers
c. Workers can be directly displaced by machinery, their scarce skills devalued.
d. The market-‐clearing wage is not necessarily a living wage.
Change in Real Wage Levels of Full-Time U.S. Male Workers by Education, 1963 - 2012
1.0
1.2
1.4
1.6
1.8
2.0Re
al W
eekly
Ear
nings
Rela
tive
to 1
963
1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
High School Dropout High School Graduate Some College
Bachelor's Degree > Bachelor's Degree
Autor 2014
Change in Real Wage Levels of Full-Time U.S. Female Workers by Education, 1963 - 2012
1.0
1.2
1.4
1.6
1.8
2.0Re
al W
eekly
Ear
nings
Rela
tive
to 1
963
1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012
High School Dropout High School Graduate Some College
Bachelor's Degree > Bachelor's Degree
Autor 2014
Changes in Male Employment/Population and Changes in Male Wages 1979 – 2008 (Ages 25-39)
19Wayward Sons: The Emerging Gender Gap in Labor Markets and Education
holds in each of the last three decades (1979-89, 1989-99, and 2000-10), as well as before and during the Great Recession (2000-2007 and 2007-2010). Over the entire 1979-2010 period, a 10% rise in wages for a demographic group is robustly associated with a 5.7 percentage point rise in its employment to population rate. Conversely, a 10% decline in wages is associated with a 5.7 percentage point decline in employment to population. Appendix Table 2 further shows that this robust positive relationship between wage and employment changes is detected for all demographic subgroups: both sexes, all race groups, both younger and older workers, and both college and non-college workers. Demographic groups with declining earnings over the past three decades experienced declining employment-to-population rates, and vice versa for groups with rising earnings.23
This summary evidence strongly supports the view that the changing patterns of employment and earnings documented above are driven to a substantial extent by changes in employers’ demands for workers of various skill levels and occupational specialties, rather than by changes in the supply of workers to the labor market. Thus, to understand the decline in labor force participation of less-educated males, we need to understand their declining earnings.
Figure 6: Relationship between Male Employment to Population Rates and Male Earnings for Persons Ages 25-39, 1979-200822
W SMCW CLG
W GTC
B HSD
B HSG
B SMC
B CLG
B GTC
O HSD
O HSG
O SMC
O CLG
O GTC
−30
−25
−20
−15
−10
−5
0
5
10
W HSG
Per
cent
age
Poi
nt C
hang
e in
M
ale
Em
ploy
men
t to
Pop
ulat
ion
Rat
es
−25 −20 −15 −10 −5 0 5 10 15 20 25 30 35 40
Percentage Change in Male Hourly Wages
Fitted ValuesBlackOther Non−WhiteWhite
W HSD
Source: Census IPUMS 5 percent samples for years 1980, 1990, and 2000 and American Community Survey (ACS) 2009.Autor and Wasserman 2014
Will the Workplace of the Future Have any Workers?
1. The case for concern
2. A brief history of technology anxiety
3. The record so far
4. Not enough jobs versus the ‘wrong’ jobs
5. Beyond the “lump of labor” fallacy
6. Is the challenge scarcity or abundance?
Stage I: Simulation
Women’s Army Corps (WACs): Manhattan Project, 1943
Stage II: Intensive Communications
Stage III: Engagement – Non-trivial Interactions Between Computers and the Physical World
Stage III: Engagement – Non-trivial Interactions Between Computers and the Physical World
Images from DARPA Robotic Grand Challenge 2013"
The Challenge: Scarcity or Abundance?
Jacob Heilbroner in The Public Interest ‘65
Technology now threatens… “a whole new group of skills… as machines continue to invade society, duplicating greater and greater numbers of social tasks, it is human labor itself—at least, as we now think of ‘labor’—that is gradually rendered redundant”
The Challenge: Scarcity or Abundance?
Herbert Simon’s response to Heilbroner in ‘66
“The world’s problems in this generation and the next are problems of scarcity, not of intolerable abundance. The bogey-man of automation consumes worrying capacity that should be saved for real problems—like population, poverty, the Bomb, and our own neuroses.” − in New York Review of Books
Chicago Economists’ Poll, February 21, 2014
6%
0% 0% 3%
64%
24%
0%
10%
20%
30%
40%
50%
60%
70%
Uncertain Strongly Disagree
Disagree No Opinion Agree Strongly Agree
Question: Advancing Automation has Not Historically Reduced Employment in the United States...
Chicago Economists’ Poll, February 21, 2014
32%
21%
3%
9%
35%
0% 0%
5%
10%
15%
20%
25%
30%
35%
40%
Uncertain Disagree Strongly Disagree
No Opinion Agree Strongly Agree
Q: Information Technology and Automation Are a Central Reason Why Median Wages Have Been Stagnant in the US
Over the Past Decade, Despite Rising Productivity.
Will the Workplace of the Future Have any Workers?
1. Three views of the problem a. We lack imagination b. We have a labor demand problem c. We have an income distribution problem
2. Worst case economic scenario • Horses – but there’s a difference…
3. Education: “America’s best idea” • Effective for raising incomes and generating economic opportunity