By Kish Rajan
Today, many of us are trying to sort through a contradiction in how we understand our economy. Fewer people are unemployed than at any time in the past decade. But as a country, we don’t feel like we’re as prosperous as we’ve been in the past. Many people would like to blame technology for this phenomenon, pointing to chips and data as the great job killers. But as with many things in life — the truth is more complicated.
Take productivity for example. This is an important measure because increased productivity helps boost the annual GDP, and can lead to higher wages and better standards of living. Technology has been a giant boon for manufacturing productivity, which has nearly doubled in the past 20 years, with half that gain coming in the tech sector, according to a new study by the Progressive Policy Institute. Since 2007, when the current tech boom started, employment in computer and mathematical occupations — including good-paying jobs for software developers and network administrators — has grown by more than 900,000 jobs. One study found that robots added nearly a half percent to annual GDP growth between 1993 and 2007.
But then there’s the flip side. Well over half of us are in jobs that could be at least 30% automated right now, according to research by McKinsey & Company.
In the United States, middle-income households, the young and those with less education have already been hit hardest by automation. One study by Boston University found that robotics reduce the employment-to-population ratio and wages in those sectors where automation is added. According to this study, workers with only a high school degree saw their wages fall from 80% of their college-educated peers to less than 60% between 1975 to 2014.
Unsurprisingly, these low-skilled, less-educated workers are employed in occupations at the greatest risk of further automation. In fact, experts predict the number of robots performing jobs in the U.S. will quadruple by 2025, which could eliminate as many as 3.4 million jobs.
These conflicting numbers paint a picture of a world where more high-paying jobs are being created while low-paying jobs are being replaced by robots. It’s no wonder that so many people are so concerned about the future of work.
So what can we do?
Believe it or not, we have a lot of power to shape how this all plays out. The future of work is going to depend a lot on the decisions businesses and government make today. And in order for those with power to make the right decisions, we all have to be asking the right questions.
Is technology causing net job growth or net job loss? It can be difficult to tell. Different reports tell different stories. Some job categories are growing and some are shrinking, so what’s the overall effect?
And if high-paying tech-heavy jobs are growing faster than low-wage service jobs are disappearing, how do we as a nation of workers adjust? We’ve seen that government-sponsored training to move displaced workers into new tech jobs isn’t always successful. Is there a better way? And who bears the responsibility of retraining workers, businesses or the government?
How do we balance encouraging tech companies to grow while ensuring that people have good jobs? It’s important that innovators and entrepreneurs be encouraged to build the Googles and Facebooks of tomorrow, but what do we do when those new companies displace workers in other industries? And how do we make sure that those tech jobs are popping up in Peoria and not just in Silicon Valley?
These questions should be high-priority for government at every level, from city hall to the White House.
Technology has always been a convenient boogie man for politicians looking to place blame for a changing job environment. The automobile put carriage drivers out of work. TV eventually killed radio storytelling (though thanks to podcasts it’s making a comeback) and online travel companies kicked most travel agents to the curb.
But each of these innovations also advanced our society in important ways and created new jobs. There’s no reason to think the current tech revolution will be any different and when you look at the productivity numbers from the recent Progressive Policy Institute report, there’s reason for hope.
But we’d be foolish to hide our heads in the sand and deny that the landscape is changing in a way that is hurting some Americans. Finding the right balance here will be key to building an America that will prosper and offer new opportunities to all citizens.
Kish Rajan is chief evangelist at CALinnovates and former director of Gov. Jerry Brown’s GOBiz initiative. He can be contacted at kish@CALinnovates.org.