Tech Is Splitting the U.S. Work Force in Two - The New York Times - 0 views
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tech economics policy crisis employment income stagnation polarization
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Phoenix cannot escape the uncomfortable pattern taking shape across the American economy: Despite all its shiny new high-tech businesses, the vast majority of new jobs are in workaday service industries, like health care, hospitality, retail and building services, where pay is mediocre.
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automation is changing the nature of work, flushing workers without a college degree out of productive industries, like manufacturing and high-tech services, and into tasks with meager wages and no prospect for advancement.
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Automation is splitting the American labor force into two worlds. There is a small island of highly educated professionals making good wages at corporations like Intel or Boeing, which reap hundreds of thousands of dollars in profit per employee. That island sits in the middle of a sea of less educated workers who are stuck at businesses like hotels, restaurants and nursing homes that generate much smaller profits per employee and stay viable primarily by keeping wages low.
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economists are reassessing their belief that technological progress lifts all boats, and are beginning to worry about the new configuration of work.
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“We automate the pieces that can be automated,” said Paul Hart, a senior vice president running the radio-frequency power business at NXP’s plant in Chandler. “The work force grows but we need A.I. and automation to increase the throughput.”
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“The view that we should not worry about any of these things and follow technology to wherever it will go is insane,”
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Because it pushes workers to the less productive parts of the economy, automation also helps explain one of the economy’s thorniest paradoxes: Despite the spread of information technology, robots and artificial intelligence breakthroughs, overall productivity growth remains sluggish.
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Axon, which makes the Taser as well as body cameras used by police forces, is also automating whatever it can. Today, robots make four times as many Taser cartridges as 80 workers once did less than 10 years ago
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The same is true across the high-tech landscape. Aircraft manufacturing employed 4,234 people in 2017, compared to 4,028 in 2010. Computer systems design services employed 11,000 people in 2017, up from 7,000 in 2010.
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To find the bulk of jobs in Phoenix, you have to look on the other side of the economy: where productivity is low. Building services, like janitors and gardeners, employed nearly 35,000 people in the area in 2017, and health care and social services accounted for 254,000 workers. Restaurants and other eateries employed 136,000 workers, 24,000 more than at the trough of the recession in 2010. They made less than $450 a week.
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While Banner invests heavily in technology, the machines do not generally reduce demand for workers. “There are not huge opportunities to increase productivity, but technology has a significant impact on quality,” said Banner’s chief operating officer, Becky Kuhn
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The 58 most productive industries in Phoenix — where productivity ranges from $210,000 to $30 million per worker, according to Mr. Muro’s and Mr. Whiton’s analysis — employed only 162,000 people in 2017, 14,000 more than in 2010
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Employment in the 58 industries with the lowest productivity, where it tops out at $65,000 per worker, grew 10 times as much over the period, to 673,000.
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The same is true across the national economy. Jobs grow in health care, social assistance, accommodation, food services, building administration and waste services
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On the other end of the spectrum, the employment footprint of highly productive industries, like finance, manufacturing, information services and wholesale trade, has shrunk over the last 30 years
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“In the standard economic canon, the proposition that you can increase productivity and harm labor is bunkum,” Mr. Acemoglu said
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By reducing prices and improving quality, technology was expected to raise demand, which would require more jobs. What’s more, economists thought, more productive workers would have higher incomes. This would create demand for new, unheard-of things that somebody would have to make
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To prove their case, economists pointed confidently to one of the greatest technological leaps of the last few hundred years, when the rural economy gave way to the industrial era.
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In 1900, agriculture employed 12 million Americans. By 2014, tractors, combines and other equipment had flushed 10 million people out of the sector. But as farm labor declined, the industrial economy added jobs even faster. What happened? As the new farm machines boosted food production and made produce cheaper, demand for agricultural products grew. And farmers used their higher incomes to purchase newfangled industrial goods.
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The new industries were highly productive and also subject to furious technological advancement. Weavers lost their jobs to automated looms; secretaries lost their jobs to Microsoft Windows. But each new spin of the technological wheel, from plastic toys to televisions to computers, yielded higher incomes for workers and more sophisticated products and services for them to buy.
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In a new study, David Autor of the Massachusetts Institute of Technology and Anna Salomons of Utrecht University found that over the last 40 years, jobs have fallen in every single industry that introduced technologies to enhance productivity.
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The only reason employment didn’t fall across the entire economy is that other industries, with less productivity growth, picked up the slack. “The challenge is not the quantity of jobs,” they wrote. “The challenge is the quality of jobs available to low- and medium-skill workers.”
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the economy today resembles what would have happened if farmers had spent their extra income from the use of tractors and combines on domestic servants. Productivity in domestic work doesn’t grow quickly. As more and more workers were bumped out of agriculture into servitude, productivity growth across the economy would have stagnated.
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The growing awareness of robots’ impact on the working class raises anew a very old question: Could automation go too far? Mr. Acemoglu and Pascual Restrepo of Boston University argue that businesses are not even reaping large rewards for the money they are spending to replace their workers with machines.
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the cost of automation to workers and society could be substantial. “It may well be that,” Mr. Summers said, “some categories of labor will not be able to earn a subsistence income.” And this could exacerbate social ills, from workers dropping out of jobs and getting hooked on painkillers, to mass incarceration and families falling apart.
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Silicon Valley’s dream of an economy without workers may be implausible. But an economy where most people toil exclusively in the lowliest of jobs might be little better.