As the 4th Industrial Revolution ushers the era of automation, the media has widely speculated the fear of massive loss of jobs. A closer inspection by a M.I.T. research team reveals that the fate of jobs may be less determined by the hands of robots but rather by the ones who write the policies pertaining to work.
The Day After Tomorrow
Apprehension regarding a machine-driven literal and job Armageddon apocalypse have been frequently depicted across various mediums. A 2013 paper from the University of Oxford projected that 47 out of every 100 U.S. jobs could be replaced by machines. Only Last year another prominent research reported that robots could replace up to 20 million jobs by 2030. Since then there’s been increasing alarm regarding how technology will shape the future of employment.
However, a novel M.I.T report has found that new technology is in reality generating as many job opportunities as it may be wiping out. The M.I.T. task force looked into how technology has evolved and will continue to shape the workforce. The article states that rather than this changing technology, the problem lies in the formulation of bad policy for workers.
Pledge for Progress
In November 2017, Rafael Reif, the president of Massachusetts Institute of Technology, delivered an intellectual appeal to the University’s Teachers. He termed the issue as the “defining challenge of our time.” His call: Help generate insights into how advancing technology has changed and will change the workforce, and what policies would create opportunity for more Americans in the digital economy. A task force was then banded to examine how technology has changed, and will continue to change the workforce.
After a 3-year period the academic task force got together to address it by publishing its wide-ranging conclusions in a The 92-page report titled, “The Work of the Future: Building Better Jobs in an Age of Intelligent Machines.” The study, which is the final report from M.I.T’s Task Force on the Work of the Future, says that we are actually facing a steady technological advancement, not a robot replacement. On the other hand, without major fixes to the political and economic structures that are built around technology, outcomes for employees don’t look encouraging.
The collective group behind the initiative was made up of M.I.T. professors, graduate students, researchers from other universities, and an advisory board of corporate executives, government officials, educators and labor leaders. In an extraordinarily detailed effort, they included labor market analysis, field studies and policy suggestions for changes in skills-training programs, the tax code, labor laws and minimum-wage rates.
The notable points of the report that focuses on the U.S. economy include importance on how workers have fared and how robots (digital and physical) can affect employees.
The Average American Worker Has Lost
It is common knowledge that higher level job holders have continued to blossom for ages while the average American worker’s wages have gone down. The M.I.T. Report goes into further scrutiny. It found, for example, that real (inflation adjusted) wages for men without four-year college degrees have declined 10 to 20 percent since their peak in 1980. This is alarming as two-thirds of American workers do not have four-year college degrees.
The researchers found that the U.S. economy produces larger gaps in wages, proportionately fewer high-quality job opportunities and less mobility between generations than most other developed nations do. America does not seem to get a compensating payoff in growth. “The U.S. is getting a low ‘return’ on its inequality,” according to the report.
Moreover, the lagging position of American workers does not appear to be the result of technology. “It’s not that we have better technology, automating more middle-wage jobs,” said David Autor, “We have worse institutions.”
Robots and AI are not the Horsemen of a Jobless Doom
Historically technology has always traded some jobs, given birth to new ones and altered the nature of others. The real question is whether things will be different this time as robots and artificial intelligence quickly take over for humans inside factories floors and office spaces.
According to the M.I.T. researchers’ conclusion, the change would be more gradual than world-shattering. It is mentionable that they wrote, “we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them.”
This judgment is informed by field research in numerous industries and sectors including small and medium-size manufacturers, health care, insurance, driverless vehicles, logistics and warehouses and advanced manufacturing.
In the context of self-driving cars and trucks, the M.I.T. researchers reasoned that widespread usage was quite a few years away. Amazon has made great strides with automated conveyance systems and some robotics in their warehouses. However, these depositories still run on human labor, and will for some time.
Irrespective of the progress, robots simply do not have the flexibility and dexterity of human workers. Presently robots learn from data and repetition. While they can master proficiency at a certain task, it is only on that one. For example, the report gives the example of a fine-tuned gripping robot that could pluck a glazed doughnut and carefully place it in a box, with its shiny glaze undisturbed. “But that gripper only works on doughnuts,” the report said. “It can’t pick up a clump of asparagus or a car tire.”
The cost and operational expertise required will also slow the widespread adoption of robots. A research team surveyed dozens of small and medium-sized manufacturers in Massachusetts, Ohio and Arizona, and found “very few robots anywhere.” SMEs, with fewer than 500 workers, account for 98 percent of the U.S.’s manufacturing firms and 43 percent of manufacturing employment.)
Economist and a Co-chair of the task force, David Autor, commented, “People understand that automation can make the country richer and make them poorer, and that they’re not sharing in those gains. We need to restore the synergy between rising productivity and improvements in labor market opportunity.”
Cycle of Jobs
Technology has both been the ender and also bringer of particular types of jobs over the ages. The standout figure from the report is that about 63 percent of jobs performed in 2018 did not even exist in 1940. This indicates that even as technology makes some jobs redundant, many new ones are being created in their place. Similarly, the overall percentage of 18 and over citizens in paid employment has risen for over a century.
Nevertheless, the M.I.T report does recognize that while doubts of a looming jobs apocalypse have been hyped-up, the methods of technology distribution over the last few years has polarized the economy. While white collar and low-paid service jobs have risen, it has come at the expense of middle-tier occupations like receptionists, clerks, and assembly line workers.
The M.I.T. report author’s state, “The 21st century will see a rising tide of new technologies, some of which are now emerging and some of which will surprise us. If those technologies deploy into the labor institutions of today that were designed for the last century, we will see familiar results: stagnating opportunity for the majority of workers accompanied by vast rewards for a fortunate minority.” This is similar to a report released by the World Economic Forum in 2019, which forecasted that while automation will unsettle 85 million jobs globally by 2025, it will also create 97 million new ones.
By contrast, the authors mention that this is not an unavoidable consequence of the change in technology. The problem is that the spoils from technology-driven productivity gains have not been shared equally. The report gives the example of the U.S. economy and states that while the country’s productivity has risen 66 percent since 1978, remuneration for production workers and those in non-supervisory roles has risen only by a meager 10 percent.
According to the authors, the crux of the difficulty lies in the lack of protection for employees with policies like minimum wages, sick leave, notice periods, and collective bargaining rights. Redundancies in training and retraining programs in both the public and private sector act as an impediment for workers to adapt to technological disruption.
Suggestions for Solutions
The report lays out 3 main suggestions for rectifying the problem. First, to begin with significant investment and innovation in training, particularly within firms and at community colleges.
The second urgency should be to develop the position of workers by strengthening labor laws, overhauling unemployment insurance, and setting the minimum wages to at least 40 percent of the national median wage and adjust it by indexing against inflation. Thirdly, the authors recommend that there needs to be redirection of innovation towards socially beneficial consequences and complementing rather than replacing workers. To achieve this national research spending should be enhanced and directed toward sectors that tend to be ignored by the private sector. Moreover, this should be shared out more equitably around the country. Current tax codes, which unduly favors investment in capital, should also be rebalanced to encourage investment in workers and training.
Converting these suggestions into action will not be easy in today’s political environment. Nevertheless, the report proposes its time to stop blaming technology for our woes. The future of work is in our hands if we formulate the right strategies today.