Quality, Not Quantity: Technology’s Effect on the Job Market
Hypothesized decades ago by renowned economists John Maynard Keynes and Wassily Leontief, most everyone has come across the long-standing fear that technology will ultimately take over the job market, forcing millions across the globe into unemployment. For the same duration of time, however, economists have argued the opposite, justifying that technology has freed people from listless tasks and enabled them to get an education, thus boosting productivity. In today’s world, while the latter notion is not completely wrong, it is considerably far from right.
Economists often cite the Industrial Revolution as an example of how technology boosts employment, productivity, standard of living, and more. From 1900 to 2014, inventions like the tractor have cut agriculture industry employment from 12 million to 2 million. But where did these workers go? Simple: the new technology boosted food production, which in turn decreased the price of produce. As a result, the demand for produce increased, and thus, the farmer’s demand for farm machines grew. While agriculture employment rapidly decreased, jobs in industry multiplied even faster.
Unfortunately, however, we no longer live in the industrial era. Our generation faces a new problem: robots now occupy the industry, and its forcing workers into the least productive realms of the economy. Looking past the glistening new iPhones and nanotechnology, one will find that most new jobs are located in the service industry, like hospitality, health care, and building services, where salary is mediocre at best. Such technology can be pointed at as the reason for an unexplainable paradox: while the effects of the technology boom are more prominent than ever before, productivity remains stagnant.
The gap in job quality only appears to be growing larger. In a study done by David Autor of the Massachusetts Institute of Technology and Anna Salomons of Utrecht University, researchers found that highly productive industries, like manufacturing and finance, have significantly reduced their employment in the past forty years in favor of automated machines. Meanwhile, employment in industries with low productivity have increased exponentially in the past decade. An example of this phenomenon can be found in Phoenix, Arizona, a rising tech metropolis. A study done on the 58 most productive industries in the city show that employment has only increased about 10,000 from 2010 to 2017, while the 58 least productive industries’ employment increased tenfold, to 673,000.
Ultimately, it is not the quantity of jobs that is the dilemma, but rather, quality. For how long can workers labor in low-list jobs before those too are replaced by machines? How can the government intervene to break this vicious cycle? And finally, the age-old question; can automation go too far?
Edited by Julie Park and Naomi Santiago.
Sources:
https://www.nytimes.com/2019/02/04/business/economy/productivity-inequality-wages.html
