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Debate: Will Automation Create More Jobs Than It Eliminates?

Art Bilger, Founder & CEO, WorkingNation

Art Bilger: No One Can Predict The Specifics

James Bessen, Economist & Lecturer, Boston University School of Law

James Bessen: History Shows Demand Has A Bigger Impact Than Tech


With advancements in technology, industrial products have evolved. Manufacturing has changed, and jobs must adapt. GE is actively investing in developing the workforce of the future, but greater collaboration is needed among business, government and academia. GE Reports Perspectives is excited to welcome experts to analyze the impact of technology on the future of work.  

 

 

There isn’t a single answer to the question, “Will automation create more jobs than it eliminates?” If we replace “automation” with the broader and more applicable term “technology,” we can focus on the certainties that will be brought on by the changes of advanced technology in the workplace.

Technology certainly will create, destroy and alter jobs. And while no one can predict the specifics, we can be sure that unemployment challenges loom in the United States. This could threaten the jobs of nearly half the American workforce over the next 20 years. The impact will be felt across all of society.

Technology is one of the four key causes of the issue we call structural unemployment. Along with globalization, employee longevity and an education system that is not yet structured to meet future job related needs, these factors are coming together like never before, rapidly changing the future of work.

We all know many jobs are being automated, from manufacturing assembly line tasks that are repetitive in nature to kiosks for banking and other transactions that are replacing humans at a staggering rate. In the future, it won’t just be factory workers and unskilled laborers who lose their jobs. Technology is eliminating jobs – or showing the potential to eliminate jobs – even in some of the most highly-skilled positions in white-collar industries.

As a result, technology will demand a workforce with different, adaptable skills to meet evolving job opportunities. At the core of this is the challenge to educate, train and retrain people so that they can achieve their full potential and offer employers valued skills. A mass movement of re-skilling and up-skilling our workforce is now mandatory to meet the technological tasks that will be demanded by the jobs of the future.

Without a re-skilling of the workforce, we should be very concerned about the net outcome on employment. The good news is that these efforts already have begun. Some companies, not for profit organizations and state and local leaders have begun working to re-skill America. Organizations like Encore exist to retrain and re-invigorate older workers. Community colleges are collaborating with companies and changing curricula to meet the demands of employers in their respective regions. Companies are investing more time and resources in their current employees through mid-career programs that train their more experienced employees and re-training across all levels of their workforce. Toyota, Vex, Kodak and YearUp all provide examples of truly successful efforts taking place at companies right now to address this issue.

Never before have we had to re-educate and retrain so much of the middle-aged and older workforce. In order to achieve a sustainable, globally competitive economy that provides good jobs and wages for Americans, business, labor, local government leaders, education leaders and citizens must mobilize to drive the solutions forward alongside the President and members of Congress.

 

(Top image: Courtesy Getty Images.)

Art Bilger is Founder and CEO of WorkingNation, a national not-for-profit campaign to educate the American public about the future of work while holding officials and thought leaders accountable for finding solutions posed by looming structural unemployment.

 

All views expressed are those of the author.


With advancements in technology, industrial products have evolved. Manufacturing has changed, and jobs must adapt. GE is actively investing in developing the workforce of the future, but greater collaboration is needed among business, government and academia. GE Reports Perspectives is excited to welcome experts to analyze the impact of technology on the future of work.  

 

 

 

Automation is creating more jobs than it is destroying.

While it’s true that robots—not just traditional industrial robots, but all sorts of artificial intelligence—are indeed likely to automate a lot of work over the next 20 years, computer automation is actually increasing employment in most industries.

We’ve seen this before in history. Take the impact of the Industrial Revolution on textile production, for example. By 1910, 98 percent of the human labor that had been required to produce a yard of cloth just 100 years earlier was taken over by machines. But the number of textile workers actually grew during this period.

How could that be? Demand increased. About 200 years ago, cloth was very expensive and most people had little of it. A typical person had only one set of clothing, often made of wool or linen. Automation sharply reduced the price of cotton cloth, and so people bought more—much more. By 1910, people were consuming 10 times as much cloth per capita as in 1810.

Today, people have closets full of clothing and the market for cotton cloth is saturated. A price decline isn’t enough to induce consumers to buy much more. As a result, automation has been reducing employment in textiles since the 1950s.

However, when it comes to information technology, the evidence still points to large, unmet demand in most industries, generating growing employment. Research shows that information technology is associated with faster employment growth in the non-manufacturing sector, but with job losses in manufacturing.

Bar code scanners, for example, automated much of the work of cashiers, but the number of cashiers increased. Electronic document discovery automated much of the work of paralegals in 2000, but employment of paralegals grew. Electronic document discovery has been a billion-dollar business since 2000, and from 2000 through 2013, full-time equivalent jobs for legal support occupations grew 1.1 percent per year, faster than the workforce. ATMs took over cash handling tasks from bank tellers, but bank teller employment has since grown in the U.S. Specifically, since 2000, the number of full-time equivalent bank tellers has increased 2 percent per annum, substantially faster than the entire labor force. The ATM made it substantially less expensive for banks to open up a branch office since fewer employees were necessary per office—down from 20 to 13 in the average urban market—so they opened up more. This increased the demand for tellers, even though there were far fewer tellers per branch.

Jobs grew in these occupations because automation allowed workers to deliver better, faster and cheaper services that were in demand. Bank customers wanted more convenient banking at nearby offices, and the ATM allowed banks to meet that demand. In the process, employment grew.

Although automation will lead to further job losses in manufacturing, warehouse operations, and truck driving, the overall impact of automation across most industries will be to increase employment. Even though the pace of advances in robotics and artificial intelligence may accelerate over the next two decades, the impact of that change—whether it tends to increase or decrease employment—depends not on the technology, but on demand. And overall, these technologies will boost employment because they are addressing major unmet needs.

But there are winners and there are losers. Some people will see their jobs become obsolete and will need to acquire new skills in order to obtain well-paying work. Robots and artificial intelligence will exacerbate economic inequality and place a burden on many workers to learn new skills. And many employers will face a continued “skills gap,” because too few workers have learned to work with the new machines. So, while automation will create more jobs than it eliminates, we also need to think about how to retrain workers and support them in making these job transitions.

 

(Top image: Courtesy Getty Images.)

James Bessen, an economist, is Lecturer at the Boston University School of Law, where he heads a research project on technology and policy. Bessen’s most recent book, Learning by Doing: The Real Connection Between Innovation, Wages, and Wealth, looks at history to understand how new technologies affect wages and skills today.

All views expressed are those of the author.