This is part two of a two-parter News from MIT feature examining new job creation in the United States since 1940, based on new research by Ford economics professor David Autor. Part 1 is available here.
Ever since the Luddites were destroying power looms, it has been obvious that new technologies can kill jobs. But technical innovations also create new jobs: consider a computer programmer or someone who installs solar panels on a roof.
In general, does technology replace more jobs than it creates? What is the net balance between these two things? Until now, that has not been measured. But a new research project led by MIT economist David Autor has developed an answer, at least for US history since 1940.
The study uses new methods to examine how many jobs have been lost to machine automation and how many have been created through “augmentation,” in which technology creates new tasks. On the web, the study finds, and especially since 1980, technology has replaced more US jobs than it has created.
“There appears to be a faster rate of automation and a slower rate of increase in the last four decades, from 1980 to the present, than in the previous four decades,” says Autor, co-author of a recently published paper. detailing the results.
However, that finding is just one of the study’s breakthroughs. The researchers also developed an entirely new method to study the question, based on an analysis of tens of thousands of US census job categories in relation to a comprehensive view of the text of US patents over the past century. That allowed them, for the first time, to quantify the effects of technology on both job loss and job creation.
Previously, scholars were only able to quantify job losses caused by new technologies, not job gains.
“I feel like a paleontologist looking for dinosaur bones that we thought were supposed to exist, but couldn’t find until now,” says Autor. “I think this research starts with things that we suspected were true, but we didn’t have direct evidence of them before this study.”
The article, “New Frontiers: The Origins and Content of New Work, 1940-2018,” appears in Quarterly Journal of Economics. The co-authors are Autor, the Ford Economics professor; Caroline Chin, PhD student in economics at MIT; Anna Salomons, Professor at the Faculty of Economics, Utrecht University; and Bryan Seegmiller SM ’20, PhD ’22, assistant professor at the Kellogg School of Northwestern University.
Automation versus augmentation
The study finds that overall, about 60 percent of jobs in America represent new types of work, which have been created since 1940. A century ago, that computer programmer might have been working on a farm.
To determine that, Autor and his colleagues combed through nearly 35,000 job categories listed in U.S. Census Bureau reports, tracking how they emerge over time. They also used natural language processing tools to analyze the text of all US patents filed since 1920. The research examined how words were “embedded” in the census and patent documents to discover related passages of text. This allowed them to determine links between new technologies and their effects on employment.
“You can think of automation as a machine that takes the inputs of a job and does it for the worker,” explains Autor. “We think of augmentation as a technology that increases the variety of things people can do, the quality of things people can do, or their productivity.”
From about 1940 to 1980, for example, jobs like elevator operator and typist tended to be automated. But at the same time, more workers filled roles such as shipping and receiving clerks, buyers and department heads, and civil and aeronautical engineers, where technology created a need for more employees.
From 1980 to 2018, the ranks of cabinetmakers and machinists, among others, were reduced by automation, while, for example, industrial engineers and operations and systems researchers and analysts enjoyed growth.
Ultimately, the research suggests that the negative effects of automation on employment were more than double in the period 1980-2018 than in the period 1940-1980. There was a more modest, and positive, change in the effect of increased employment in 1980-2018, compared to 1940-1980.
“There is no law that these things have to be balanced one by one, although there was no period when we did not also create new work,” observes Autor.
What will the AI ​​do?
Research also uncovers many nuances in this process, as automation and augmentation often occur within the same industries. It’s not just about technology decimating the ranks of farmers while creating air traffic controllers. Within the same large manufacturing company, for example, there may be fewer machinists but more systems analysts.
Relatedly, over the past 40 years, technological trends have exacerbated the wage gap in the US. U.S., with highly educated professionals more likely to work in new fields, which are divided between high-paying and lower-income jobs.
“New work is bifurcated,” says Autor. “As the old work was wiped out in the middle, the new work grew up on either side.”
As the research also shows, technology is not the only thing driving new jobs. Demographic changes are also behind growth in many sectors of service industries. Interestingly, the new research also suggests that large-scale consumer demand also drives technological innovation. Inventions are not only provided by brilliant people who think outside the box, but respond to clear societal needs.
The 80-year data also suggests that future pathways for innovation and employment implications are difficult to predict. Consider the possible uses of AI in workplaces.
“AI is really different,” says Autor. “It can replace some highly skilled experience, but it can supplement decision-making tasks. I think we’re in an age where we have this new tool and we don’t know what it’s for. New technologies have strengths and weaknesses and it takes time to figure them out .GPS was invented for military purposes and took decades to be in smartphones.
He adds: “We hope that our research approach will give us the ability to say more about that in the future.”
As Autor acknowledges, there is room for the research team’s methods to be more refined. At the moment, he believes that the research opens up new areas of study.
“The missing link was documenting and quantifying how much technology increases people’s employment,” says Autor. “All the previous measures only showed automation and its effects on the displacement of workers. We were surprised to be able to identify, classify and quantify the increase. So, for me, it’s pretty fundamental.”
Research support was provided, in part, by The Carnegie Corporation; Google; Institute Gak; the MIT Work of the Future Task Force; Schmidt Futures; the Smith Richardson Foundation; and the Washington Center for Equitable Growth.
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