Relax. Robots Won't Cause Us to Run Out of Jobs.
No, no, a thousand times no! No matter how many times a purported expert claims we are facing an epochal technology revolution that will destroy tens of millions of jobs and leave large swaths of human workers permanently unemployed, it still isn't true.
The latest installment in what has become a relentless series of these kinds of hysterical reports came in a "60 Minutes" segment featuring Kai-Fu Lee, a Taiwanese venture capitalist based in Beijing, China. Lee, who has made his name and fortune investing in artificial intelligence enterprises, casually asserted that in the next 15 years AI will displace about 40 percent of the world's jobs.
But it was a much-ballyhooed study by Oxford University researchers Carl Benedikt Frey and Michael A. Osborne that first set the tone for automation alarmists when it trumpeted the jarring conclusion in 2013 that 47 percent of U.S. employment is at risk of job loss from new technology. Others piled on in the years that followed. Martin Ford, author of the New York Times best-seller "The Rise of the Robots," warned of "soaring long-term unemployment." And not to be outdone, Silicon Valley gadfly Vivek Wadhwa predicted that 80 to 90 percent of jobs will be eliminated by the end of the next decade. Whatever their differences, all agreed we are facing massive technological unemployment that will breed Dickensian conditions.
To ensure that this dystopian world of mass unemployment doesn’t arrive, pundits and policymakers alike increasingly endorse a host of "solutions" that range from the wholesale implementation of a system of universal basic income (UBI), to the taxation of "job-killing" robots, and even to affirmative action programs for humans.
This is, in a word, nonsense. We will not run out of jobs, because we will not run out of work to do. It's as simple as that.
Let's start with the fact that the median household income in the United States is around $61,000. Let's assume for the sake of argument that somehow this magical technology (AI, robots, autonomous vehicles, etc.) increases labor productivity rates by a factor of seven — going from the current 1 percent per year growth to 7 percent. (Point of reference: The fastest rate of productivity growth over a multiyear period in U.S. history has been around 3 percent.) This would mean that by 2039, median household income would be $230,000.
Does anyone really think that households making that much money would run out of things to buy? Today, households making an average of $240,000 spend 2.3 times more on eating out than the median household; 3 times more on furniture, new cars and trucks, and apparel; 4 times more on their pets; 4.5 times more on personal services and other transportation, including airlines. To disagree with F. Scott Fitzgerald, the big difference between the rich and the rest of us is not just that they have more money, but that they spend more money. That spending creates jobs; so, as Americans get richer from technologically induced productivity, they will continue to spend more. That means we won’t run out of jobs, because organizations will have to hire workers to provide those products and services.
But there is an even more basic reason why we won't run out of jobs: There is a vast array of socially valuable work that still needs to be done, and the main reason we aren't doing it today is that even the richest societies in the world don’t have enough money to do it. Let's start with infrastructure. The American Society of Civil Engineers estimates that we need to invest an additional $2 trillion per year to upgrade our infrastructure from its current D+ level of decrepitude to an A. And that doesn't include all the additional infrastructure we need, from more roads to a national network of bike paths, to better high-speed rail and transit, and a massive network of tunnels underneath cities to speed up traffic, as Elon Musk's Boring Company wants to build. With more money from productivity, we also could afford massive investment to improve and beautify our cities and towns.
Next comes education and children. With all this added productivity, we could afford to provide paid parental leave to new parents, even up to four years leave. We could afford to provide visiting aides, as the Swedes do, to ensure that parents have the support they need to raise physically and emotionally healthy children. We could afford to hire more teachers to reduce the average class size in public schools from 23 students per teacher to around 15.
Then there is health care. We could afford to provide for the baby boomers who will drive up health care expenditures as they age and retire in droves. We could finally afford high-quality universal health care for all Americans, regardless of income level. We wouldn’t have to try to squeeze drug prices to save money, so biopharmaceutical firms could be assured of revenues they need to pay for the research and development to support the next wave of revolutionary breakthroughs in medicines and treatments.
And what of energy and the environment? All this added income means that we could afford to spend much more to clean up and keep clean the environment, including our land, rivers, and air. And we could easily afford the higher costs of switching from dirty fossil fuels to clean energy.
While we won’t run out of work, a faster pace of technological innovation and productivity will likely lead to increased labor market churn as some occupations (e.g., truck drivers) decline and others grow (e.g., health care workers). This means that the challenge for policymakers is not to slow down change or enact a wasteful UBI, but to put in place a much more robust system to help workers make employment transitions.
In short, higher productivity from technological innovation is a gift that will enable a much safer, healthier, cleaner, and better-educated society.
Robert D. Atkinson is president of the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.