I recently read a very interesting paper, The Growing Importance of Social Skills in the Labor Market, by Harvard professor David Deming. Deming’s paper shows that over the past several decades, labor markets have been increasingly rewarding social skills, that is, interpersonal skills that facilitate interactions and communications with others. He presents evidence that since 1980, social-skill intensive occupations have enjoyed most of the employment growth across the whole wage spectrum, and that employment and wage growth have been particularly strong in jobs that require both high cognitive and high social skills.
Deming’s paper builds on the work of MIT economist David Autor, a leading authority on the impact of technological change on the US labor market. A few weeks ago I wrote about a paper he published this past summer on the history and future of workplace automation. In that paper, Autor summarized the sharp polarization of job opportunities that’s taken place in the US over the past two decades, noting that job opportunities have significantly expanded in both high-skill and low-skill occupations, while they have significantly contracted for mid-skill jobs.
The reason for this polarization is that automation has been most successful when applied to mid-skill routine tasks, that is, tasks or processes that follow precise, well understood procedures that can be well described by a set of rules. The occupations most susceptible to automation have included blue-collar physical activities such as manufacturing and other forms of production, as well as white-collar, information-based activities like accounting, record keeping, and many kinds of administrative tasks. As a result, these occupations have experienced the biggest declines in employment opportunities and earnings.
On the other hand, non-routine tasks are much harder to describe by a set of rules that a machine can follow. These include manual jobs in fast-food restaurants, janitorial services and health-care aides that require relatively low skills and education, as well as high-skill jobs that involve expert problem solving and complex communications requiring strong cognitive skills and a college education.