What Automation Might Mean For The Shrinking Middle Class
A new report by Bain & Company says automation could displace 2.5 American million workers per year, or more than three times the rate between 1970 and 1990, when computers revolutionized the global economy. New jobs will replace many if not all of the old jobs lost to automation, but some economists worry those jobs won’t be able to support a middle-class lifestyle.
Here & Now‘s Eric Westervelt (@Ericnpr) speaks with Andrew McAfee (@amcafee), co-director of the MIT Initiative on the Digital Economy and co-author of “Machine, Platform, Crowd: Harnessing Our Digital Future.”
McAfee says the U.S. isn’t very well prepared for the kind of economic shift automation presents, nor is it adapting fast enough.
“My big frustration is not about the pace of technology,” he says. “It’s about the fact that we’re not even seriously considering the kinds of adjustments that might be smart, in the face of a whole lot of technology hitting the economy.”
On the report’s findings, and the scale of the potential shift
“There are two things to keep in mind: First of all, it is really hard to predict the path that automation is going to take. So I don’t place a lot of weight in longer-term forecasts, because previous generations of those forecasts have not been very accurate. The other thing to keep in mind is that 2.5 million sounds like a really big number — there are about 1.5 million layoffs every month and the American economy. We have a very big workforce. There are millions and millions of people working. So we can absorb a million and a half layoffs a month and still have net job growth. So that raw number is not too huge for me. But I do believe there is going to be another wave of automation and displacement in the labor force.”
On whether we’re prepared for such a shift
“I don’t think we’re very well prepared for it. … There have been previous big waves of technology: electrification was a big deal, actually container shipping was a big deal, put a lot of longshoremen out of work. We were able to reabsorb those people who got displaced by technology and generally put them back into the workforce at a higher level of wage income, in part because we made some pretty big choices as a society. So for example, about 100 years ago we decided on mandatory high school education for everybody, and that was a controversial choice at the time, turns out to have been a really good one.”
On which sectors will see the most jobs lost to automation
“My rule of thumb for looking around at where jobs are going to be confronted by a lot of automation is, if you’re doing the same thing over and over in a pretty regular environment — even if that thing that you’re doing is pretty complex and pretty subtle. So for me, that’s everything from a cashier in a retail store who’s kinda doing the same thing over and over again, to a radiologist, who’s a very, very well-trained, highly educated person, a lot of their job is very, very subtle pattern recognition. The technologies are reaching superhuman performance in all kinds of pattern recognition now.”
On if there’s any way to control how fast this job displacement occurs
“That’s a great question, and my simple answer to that is no. Tech progress and innovation are both really, really decentralized activities. So trying to think that you’re smarter than innovation, or you know which ones to accept and which ones to try to stop, is a deeply dangerous game, and one that I don’t want us to play. What I wanna do is try to rethink the benefits packages, the safety nets, the environment around this amazing tech progress, so that we don’t have a lot of people feeling overwhelmed and feeling left behind.”
On whether companies doing some automation, like Apple and Amazon, are doing enough to address some of the issues it poses
“I think so. The leaders I talked to in the tech sector and in Silicon Valley are aware that the middle class is getting hollowed out in America, that a lot of people feel like they’re getting a raw deal, and there’s a lot of stagnation going on. And so when I have those discussions, I hear a lot of enthusiasm for participating in solutions. However, I do not think it’s the job of companies in a market-based economy to employ people they don’t need — that’s just kind of asking them to take one for the team, in a way that I don’t think is gonna work out very well.
“I think they do have a job to advocate for the right policy, but you know, business is one element of a society, the workforce is another element, government is another element, education. All these institutions have to respond to this change that we’re living through. I believe we need all hands on deck to participate in solutions. The business community is absolutely part of it.”
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