Government shouldn’t try to stop machines, whether robots or algorithms, from replacing workers. That doesn’t mean policymakers, however, don’t have a role to play. The Financial Times reports the US has lost almost 2 million clerical jobs since 2007 “as new technologies replace office workers and plunge the American middle class deeper into crisis.” Those jobs — including bookkeepers, bank tellers, file clerks, cashiers — still make up 16% of the US workforce, commanding an average annual salary of $34,000.
That sector is headed where manufacturing already is. Output up, employees down. There are two million fewer factory workers today than in 2007 despite output fast approaching its old high. The story of PPG Industries, as related by The New York Times, tells the tale:
The production lines run 24 hours a day, seven days a week at PPG’s plants, including one in Carlisle, Pa., that makes flat glass. It’s among the plants benefiting from a rebound in housing. “Because it is automated, we won’t have to add a lot of employees with the upturn in the construction industry,” Mr. Beuke said. “You don’t touch a piece of glass in our factories.” At PPG, production is up 10 percent since the recession — but employment remains flat.
It’s not all bad news. Cheaper energy will help manufacturing employment a bit. IHS Global Insight, according to the NYT, estimates the shale gas industry could eventually create 1.6 million jobs in the coming decades. Also, demand for managers, described by the FT as “people who figure out how to replace clerical workers – such as operations managers, management analysts and logisticians” is up, adding 387,000 jobs since 2007. In other words, non-routine jobs replacing routine jobs.
Maybe not fast enough. As Andrew McAfee concedes, “previous waves of automation have not, in the long run, led to mass unemployment.” But there is also no guarantee that creative destruction and labor markets will adjust as smoothly as we would like. And we could be entering as period where the fast pace of technological change overwhelms, at least for a while, our ability to educate workers and create new businesses and business models. McAfee:
Since the end of the 2001 recession real GDP has increased by just about 20%. The number of hours worked, however, has increased by only 2.8% over that same time, and the total number of jobs by 1.9%. Those latter two numbers are pretty close to zero. Is it so hard to believe that a realistic future combination of fast automation and relatively slow GDP growth could cause them to turn negative?
I don’t find that scenario implausible at all. Technological employment has not happened economy-wide yet, but as the facts change — as technology’s role in the economy shifts — shouldn’t we change our opinions about what constitutes a myth?