Automation's Impact On Employment Is Already Here

Published in Online Spin, March 2nd, 2018.

On February 26, 1928, the New York Times ran a headline: “March of the Machine Makes Idle Hands.” The subhead: “Prevalence of Unemployment with Greatly Increased Industrial Output Points to the Influence of Labor-Saving Devices as an Underlying Cause.”

This was still two years before John Maynard Keynes would coin the term “technological unemployment” -- but over a century after people had begun to fear the concept.

The most famous resisters, of course, were the Luddites. Ask 100 people what they know about Luddites, and you’ll get something along the lines of, “They smashed up machines because they didn’t like technology.”

It’s a tidy narrative. But the real world is rarely that tidy.

According to Clive Thompson in Smithsonian magazine, at the turn of the 19th century, weavers, spinners and croppers were high-skilled workers who took pride in their products and had plenty of time off. But war and changing fashions combined to put immense pressure on the textile industry, leaving company owners to wonder: How could they reduce labor costs?

Exit plenty of time off. Enter automation. The new products were poor quality, and the new jobs offered 14-hour days.

The most surprising thing about Thompson’s narrative was not that the Luddites’ grievances were justifiable. It was that smashing the machines was their last option, not their first: “The workers tried bargaining. They weren’t opposed to machinery, they said, if the profits from increased productivity were shared. The croppers suggested taxing cloth to make a fund for those unemployed by machines. Others argued that industrialists should introduce machinery more gradually, to allow workers more time to adapt to new trades.”

and

“At heart, the fight was not really about technology. The Luddites were happy to use machinery—indeed, weavers had used smaller frames for decades. What galled them was the new logic of industrial capitalism, where the productivity gains from new technology enriched only the machines’ owners and weren’t shared with the workers.”

Let’s come back to the present, where fears of technological unemployment have gained new urgency in recent years. Perhaps it began in 2013, when Frey and Osborne issued their now-infamous report suggesting that 47%-81% of jobs were under threat from technology within 20 years. Perhaps it was exacerbated in 2016, when a study from the International Labour Organization predicted the replacement of 137 million textile industry jobs in five Southeast Asian countries, again within 20 years.

But is this true? Should we be afraid?

Techno-optimists like to say that every time new technology has replaced work, new jobs have more than made up for it.

It’s a tidy narrative. But the real world is rarely that tidy.

Last week, in a long but excellent essay on the topic, Scott Alexander examined the issue from every angle.

Here’s the quick version:

Unemployment is super-low -- people who are looking for work are generally finding it.

But the prime-age labor force participation rate is also super-low, meaning lots of people who should be right in the middle of their professional lives have given up looking. The people most likely to have dropped out? Uneducated men. Poor people. Ex-convicts. Blue-collar workers. Minorities.

Wages are stagnating, which some economists believe is a result of automation.

And the middle class is hit hardest when it comes to disappearing job opportunities.

“The best-paying jobs -- managers, professionals, and the like -- are doing fine. The lowest-paying jobs, like personal care and food, are also doing fine. It’s the middle-paying jobs that are in trouble.”

This is not a positive confluence of indicators. It’s a sign that the current logic of industrial capitalism is failing a large chunk of our society.

Will we be willing to read the sign before people start smashing machines?

Kaila Colbin