In a recent post, Paul Krugman writes about the effect of technology on workers. He argues that until the year 2000, disruptive technology’s effect on Labor was to displace low-skilled workers. The beneficiaries were better-educated workers with the skills to design and to use new technology. A handful of Netflix software engineer benefit, a large number of Blockbuster store clerks lose. And so on and so forth.
The answer from government and business has traditionally been to emphasize education. Go back to any presidential election from the last 15 years and you’ll see discussions of “retraining workers in high growth industries” and whatnot. But Krugman says that the education argument is a mirage. Highly-skilled workers are also facing displacement.
One current example of this is that many of the new business intelligence software and big data processing tools that are becoming widespread can replace functions that have traditionally been performed by teams of business/data analysts. These are skilled, college -educated professionals that are being replaced (partially) through software. And of course it’s not a 1-to-1 trade. The capabilities of new types of software to analyze data and extract insights is far beyond what teams of humans were capable of performing even recently.
You are also going to continue to see examples of technology disrupting low-level labor as we’ve traditionally believed to happen. The implications of self-driving cards and robotics in industrial manufacturing are yet to fully be seen. It’s not out of the question to imagine a world in 10-15 years where most of the delivery drivers, truck drivers, street sweepers, etc. are replaced through automation. You’re already seeing it in the industrial world.
Who benefits from this? Capital and often consumers as well. I think this story helps to partially explain the rising income equality you’ve seen over the last 40 years. Recent research shows that 30% of income inequality in the US can be attributed to tax policy. Perhaps the accrual of technology benefits to capital helps to explain the other 70% of the puzzle.
Technology is great. The iPhone, Google Maps, Wikipedia, Tableau, Kiva Systems, etc. are incredible. They are amazingly powerful tools for improving the lives of consumers and raising the efficiency of businesses. I also think that this “displacement effect” is less pronounced in technology areas outside of pure IT. My sense is that technology in Energy, Medicine, etc. tends to have a less deleterious effect on Labor, though I’m interested in hearing counterexamples to this.
I would never argue that we shouldn’t pursue technological advancement. But if workers across the spectrum are suffering short-term displacement, it only exacerbates inequality and all of the attendant problems. I’m not sure what the solution is, but the first step is to at least to recognize the challenge.