Blog 2 - Automation - What does it mean for jobs?

Why are there still so many jobs? The fraction of US adults, employed in the labor market, is higher now than it was 125 years. But how can this be, you might ask? As our machines increasingly do our work for us, why does this not make our work redundant? According to a TedxCambridge talk by David Autor in 2016, there are logical reasons why there are still so many jobs. He begins explaining this by using two fundamental economic principle. One has to do with human genius and creativity. The other has to do with human insatiability or greed. The first principal or human genius he refers to has the O-Ring principal and it determines the type of work that we do. The second principal he refers to as “the never get enough” principal and it determines how many jobs there actually are.

The primary message of his argument is that automation creates wealth by allowing us to do more work in less time. Where the catch is, is how we will use that wealth and if we will use it well. That is where we need to be concerned. A current example of this when you compare the countries of Norway and Saudi Arabia. Both of these countries are extremely wealthy due to oil. The big difference between these two nations is how they have used the wealth to improve human prosperity. Norway is a well oiled democracy (no pun intended). Year after year, Norway typically ranks between first and fourth in national happiness. Saudi Arabia on the other hand, is a monarchy in which there severe gap between the citizens in a path for personal advancement. Saudi Arabia generally ranks in the high 30’s for its nations happiness. These two countries are equally wealthy but not equally well off.

Year after year, decade after decade, it has been predicted that advancements in technology will be the downfall of the people because of an intense fear that jobs will be eliminated due to technology. However, it is very selfish to think that are not people out there with the imagination necessary to envision the new jobs that can be created due to advancements in technology. For example, look at the automobile or ATM machines, the invention of these did not eliminate jobs but instead required people in these professions to focus on different skills.

As technology advances, we are beginning to see growing disparities between the upper class, middle class and lower class. As technology advances, so does the need for highly educated and highly paid workers in fields like medicine, engineering and computer science. As people in these fields become wealthier, jobs in low paid, blue collar support industries such as house cleaners and gardeners are also growing. These examples demonstrate that there is job growth for highly educated elite and job growth for low paid low skill workers, the scary question is, what does this mean for the middle class?

If you have the time, please watch David Autor’s Ted Talk below!