The Great Underemployment Debate, Continued

IEEE Spectrum’s Steven Cherry recently published a Techwise Conversations podcast with Professor Henrik Christensen regarding automation/technology and its impact on jobs: Robots are Not Killing Jobs, Says a Roboticist.  We are going to hear and see ever greater conversation on this topic over the next decade, as robotics and automation continues to break through new, unforeseen barriers, threatening skilled labor from angles that were previously out of view.  Christensen uses the Industrial Revolution as historical evidence that forward progress typically leads to more jobs, not less, by creating new job categories over the long term. In fact he distinguishes between short-term effects of robotics in the workplace and long-term consequences, suggesting that although there may be short-term loss of jobs, the eventual trend will reverse. The potential for mistaken extrapolation on this front lies in the possibility that today’s dynamics just aren’t the same as 120 years ago. Anyone interested in this question ought to give Race Against the Machine a read– it demonstrates how, since the mid-1980’s, rising productivity is leading to greater relative unemployment rather than new employment categories and positions. The trends reverse some thirty years ago, and the trend is not thrilling, neither short-term nor long-term.

One interesting trope that Steven Cherry brings up in this interview is the skills gap and training gap concern: is the problem that there aren’t enough replacement jobs, or is the problem that companies and educational institutions cannot or will not do enough retraining to have a net positive effect on society? First, turn to the Atlantic’s article on falling factory employment and the skills gap. While the skills and training gaps are important issues, the real issue is that automation is becoming cheap so fast that its return on investment far exceeds that of hiring or training up humans. We’re expensive, and we don’t get cheaper. Every year robots get cheaper. That is a problem that simply cannot reverse naturally.

Yet another fascinating conversation revolves around Europe versus the U.S. Prof. Christensen suggests that Europe is a land where legislators may actively decide to cap productivity in the social interest of employment, whereas the U.S. is a country that will never take such drastic steps. I think an alternate interpretation of the last few decades is that Europe is playing productivity catch-up because, as Friedman would say, the world is flattening and Europe must compete evenly with both the U.S. and with Asia. Europe has no choice but to move toward productivty, and while the U.S. leads that movement, every major economic powerhouse tows that line as far as I can see. We are reaching the future faster than anyone else, but they are all following. The question is, are we heading in a desirable direction?