May 11, 2017    4 minute read

Should We Intentionally Slow the Pace of Technological Change to Help Workers?

Playing Catch-up    May 11, 2017    4 minute read

Should We Intentionally Slow the Pace of Technological Change to Help Workers?

Originally published on the American Enterprise Institute by  on the 4th of May 2017

So another, shall we say, “soft” productivity report. Hourly output per worker decreased at a 0.6% annualised rate in the first quarter. Nothing new there. Productivity has been increasing at just a 0.6% annual pace over the past five years vs. 2.2% from 1947 through 2007. Yet at the same time, many people are worried robots will soon make humans so productive that we will need far fewer carbon-based workers in the future. (“It’s No Myth: Robots and Artificial Intelligence Will Erase Jobs in Nearly Every Industry.”)

Of course maybe one day the worriers will be proven correct, and history will not repeat itself when it comes to automation and jobs. You know, overall far greater prosperity and employment. This from PricewaterhouseCoopers should still be the baseline scenario:

… these new automated technologies will boost productivity considerably over time1 (if not, they will not be adopted on economic grounds). This will generate extra incomes, initially for the owners of the intellectual and financial capital behind the new technologies, but feeding into the wider economy as this income is spent or invested in other areas. This additional demand will generate increased jobs and incomes in sectors that are less automatable, including healthcare and other personal services where robots may not be able to totally replace, as opposed to complement and enhance, workers with the human touch for the foreseeable future.

But what about right now? The US economy is creating gobs of jobs. And in the past year, overall personal income is up nearly 5% with private wages and salaries are up 6.0%, according to First Trust Advisors. Still, people are cooking up ideas to deal with the rise of the robots. The Week column takes a look at a trillion-dollar plan to turn the EITC into a proto-basic income. Along similar lines, recall that Bill Gates recently mused about a “robot tax” to finance wage subsidies or workers training — and even to slow down the pace of automation to figure out to help displaced workers and damaged communities. And this by Brookings’ Alice Rivlin also shows how delay might work, as it concerns driverless trucks:

A possible policy response is delaying the consequences of the technological revolution as long as possible. For example, diesel railroad engines were required to carry firemen long after there was no coal to be shoveled. This type of response, called “feather-bedding,” only postpones the inevitable transition. Trucks could be required to have a driver on board at all times, for “safety” reason, but if that person proved genuinely superfluous, their employment would not last long.

So this is hardly a new strategy, and it is mentioned more and more in various forms such as “human job quotas.” Indeed, delay has also been mentioned as a possible response to the 2000s China trade shock. As economist David Autor recently told The Washington Post, if “we knew how disruptive this would be, we would have wanted to do it more slowly.”

But truck driving is a good example of how automation fears can be overdone, particularly when it comes to the 1.5 million long-haul drivers in the US. As analyst Benedict Evans has explained:

The average age of a long-haul driver is now 49, and around 90 thousand leave the industry every year, half though retirement. The industry thinks it has a shortage of around 50,000 drivers, and growing – people are leaving faster than they can be replaced. Truck driving can be an unhealthy, uncomfortable job with a difficult lifestyle. Hence, on these numbers, over half the current driver base will have left in ten years, around the time that most people think full, level 5 autonomy might be working. In the short term, level 4 autonomy makes truck-driving more attractive, since you can rest in the back of the truck until you’re needed instead of having to stop at mandated times.

But on a 20-30 year view, which is really the timeline to think about this transition, effectively all current truck drivers will have quit anyway – you won’t replace them, but you won’t necessarily put anyone directly out of work – until you start looking at truck stops, which takes us right back to the convenience store discussion at the beginning of this piece. And meanwhile, truck-stop operators are already starting to think about the fundamentally different trucking patterns that might come from a shift in the logistics industry away from serving traditional retail and towards serving ecommerce (i.e Amazon).

 

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