The Shifts — Great and Small — in Workplace Automation

There have been periodic warnings in the last two centuries that automation and new technology would wipe out large numbers of middle-class jobs.

In the early 19th century, for instance, a group of English textile artisans, known as Luddites, famously protested the automation of textile production by seeking to destroy some of the machines. A century later, concern rose again over “The Automation Jobless,” as they were called in the title of a Time magazine story of February 24, 1961. U.S. President Lyndon B. Johnson even empaneled a Commission on Technology, Automation, and Economic Progress to confront the productivity problem in 1964 — specifically, that productivity was rising so fast it might outstrip demand for labor. The Commission ultimately concluded that automation did not threaten employment, but that didn’t permanently close the case.

Employment displacement concerns are valid and have regained prominence. For instance, in their widely discussed book, The Second Machine Age, MIT scholars Erik Brynjolfsson and Andrew McAfee offer an unsettling picture of the likely effects of automation on employment.

While we can say with certainty that the past two centuries of automation and technological progress have not made human labor obsolete — the employment‐to‐population ratio actually rose during the 20th century as women moved from home to market — past interactions between automation and employment do not necessarily predict the future. There’s no fundamental economic law that guarantees every adult a living solely on the basis of sound mind and good character.

In particular, the emergence of greatly improved computing power, artificial intelligence (AI), and robotics raises the possibility of replacing labor on a scale not previously observed. If this should occur, the primary challenge will be one of income distribution rather than non-employment. How can we ensure that the largest number of people gain from the surge in productivity?

Labor Market Polarization

Automation does, indeed, substitute for labor — as it is typically intended to do. However, automation also complements labor, raises output in ways that lead to higher demand for labor, and interacts with adjustments in labor supply.

The frontier of automation is rapidly advancing, yet the challenges to fully substituting machines for workers in tasks requiring flexibility, judgment, and common sense remain immense.