Spend and Retrain: Unemployment and Income Inequality driven by Policy not Automation - BLOG

Spend and Retrain: Unemployment and Income Inequality driven by Policy not Automation

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May 8, 2017 – Washington D.C. based – ITIF (Information Technology and Innovation Foundation) released an interesting study on the inter-relationship between automation technology, policy and employment. In their own words – there is considerable confusion about the potential effects of emerging technologies such as robotics and artificial intelligence on employment. From taxi drivers being displaced by Uber, to lawyers losing their jobs to artificial intelligence-enabled legal-document review, to robotic automation putting blue-collar manufacturing workers on unemployment, popular opinion is that technology is driving a relentless pace of Schumpeterian “creative destruction,” and we are consequently witnessing an unprecedented level of labor market “churn.” One Silicon Valley executive even predicts that technology will eliminate 80 to 90 percent of U.S. jobs in the next 10 to 15 years. Such grim assessments are the products of faulty logic and erroneous empirical analysis, making them simply irrelevant to the current policy debate. For more see “False Alarmism: Technological Disruption and the U.S. Labor Market.
1) Labor market disruption is not abnormally high; it’s at an all-time low, and predictions that human labor is just one tech “unicorn” away from redundancy are likely vastly overstated.

2) Full employment is dependent on technologically driven productivity growth which in turn raises living standards (if not offset by poor policy making in other fields). Technology-driven automation is central to the process of increasing our living standards. That is because better “tools” allow us to produce more. It is only by producing more that workers can earn more and companies can lower prices, both of which increase living standards.

3) Regardless of the rate of technological automation, the United States needs to do more to help workers make transitions between jobs and occupations. The failure to give workers skills and assistance to move into new jobs or occupations not only contributes to higher structural unemployment, but also breeds resistance to innovation and automation.

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