The Work of the Future: Building Better Jobs in an Age of Intelligent Machines, by David Autor, David Mindell and Elisabeth Reynolds was published last week. The new book is based on the multiyear MIT Task Force on The Work of the Future that they jointly co-chaired.
The Task Force was commissioned by MIT President Rafael Reif in the spring of 2018 to address one of the most critical questions of the digital economy, - an economy that technology universities like MIT have played a major role in bringing about: as emerging technologies raise aggregate economic output and the wealth of nations, will they also enable people to attain higher living standards, better working conditions, greater economic security, and improved health and longevity? Led by Autor, Mindell and Reynolds, the task force involved over 20 faculty members from 12 departments at MIT as well as more than 20 graduate students. Its final report was released in November of 2020. In addition, the Task Force published a number of working papers and research briefs.
“Amidst a technological ecosystem delivering rising productivity, and an economy generating plenty of jobs (at least until the COVID-19 crisis), we found a labor market in which the fruits are so unequally distributed, so skewed towards the top, that the majority of workers have tasted only a tiny morsel of a vast harvest.” was the Task Force overarching conclusion. But, it argued that with better policies in place, more people could enjoy good careers even as new technologies transform the very nature of work.
Let me summarize the Task Force key findings which the book builds on:
Technological change is simultaneously replacing existing work and creating new work. It is not eliminating work altogether: “No compelling historical or contemporary evidence suggests that technological advances are driving us toward a jobless future. On the contrary, we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them, and that robotics and automation will play an increasingly crucial role in closing these gaps.”
Rising labor productivity has not translated into broad increases in incomes because societal institutions and labor market policies have fallen into disrepair. In the 30 years between 1948 and 1978, US productivity as measured by output per hour rose by 108%, an annual growth rate of 2.4%, while the average compensation of production workers increased in lock-step by 95%. But then came the so-called great divergence of the past four decades. Between 1978 and 2016, productivity rose by 66%, an annual growth rate of 1.3%, while median compensation increased by only 9%. While the U.S. witnessed major technological innovation in recent decades, policy innovation on behalf of workers has fallen behind.
Momentous impacts of technological change are unfolding gradually. Historically transformative technologies, - like electricity, the Internet, and now AI, - generally require massive complementary investments over several decades to be widely embraced by companies and industries across the economy. “This time scale of change provides the opportunity to craft policies, develop skills, and foment investments to constructively shape the trajectory of change toward the greatest social and economic benefit.”
Fostering opportunity and economic mobility necessitates cultivating and refreshing worker skills. The US must invest in existing educational institutions, including primary and secondary schools and vocational and college programs, to help workers remain productive in our fast changing economy. In addition, the US must create innovative life-long education and skills development programs.
Productivity gains must translate into better quality jobs. The US must address the large and growing gulf between the desire of employers for low costs, high profits, and rising productivity with the need for workers to receive reasonable compensation, fair treatment, and economic security.
Investing in innovation will drive new job creation, speed growth, and meet rising competitive challenges. “Investments in innovation grow the economic pie, which is crucial to meeting challenges posed by a globalized and fiercely technologically competitive world economy.” Technological innovation over the last century was heavily driven by federal investments in R&D which led to new industries and occupations and offered new earring opportunities. Federal investments in R&D as a percentage of GDP peaked at 1.86% in 1964 but have significantly declined from a little over 1% percent in 1990 to 0.66% in 2016.
While expanding on these findings, the book explores the major changes that have taken place since the release of the Task force report in 2020, especially the impact of the Covid-19 pandemic on work and business.
“We are living in a period of significant disruption, but not of the kind envisioned in 2018, when the Task Force was launched,” note the authors. “The final phases of researching and writing this book occurred during the 2020 months of COVID-19, when citizens of many countries were in a state of pandemic lockdown. Our technologies have been instrumental in enabling us to adapt to these new circumstances via telepresence, online services, remote schooling, and telemedicine. These tools for performing work remotely don’t look anything like robots, but they too are forms of automation, displacing vulnerable workers from low-paying service jobs in such industries as food service, cleaning, and hospitality. We face a labor market crisis stemming from the COVID-19 pandemic. Millions are unemployed. But technological advances did not cause this crisis.”
“Long before this disruption, our research on the work of the future made it clear how many in our country are failing to thrive in a labor market that generates plenty of jobs but little economic security. The effects of the pandemic have made it even more viscerally and publicly clear: despite their official designation as ‘essential,’ most low-paid workers cannot effectively do their jobs through computing platforms since they must be physically present to earn their livings. … However it plays out, the effects of COVID-19 on technology and work will last long beyond the pandemic, although those effects may look quite unlike what anyone envisioned in 2018.”
As I read the book’s concluding section, two major messages came through loud and clear. First, technological advances are not driving us toward a jobless future. More than 60% of today’s jobs hadn’t even been invented in 1940. “Inventing new ways of accomplishing existing work, new business models, and entirely new industries drives rising productivity and new jobs. Innovation brings new occupations to life, generates demands for new forms of expertise, and creates opportunities for rewarding work. What human work will look like a century from now is unknown, but most jobs of tomorrow will be distinct from those today, and will owe their existence to the innovations sprouting from scientific and technological progress.”
Finally, the work of the future is ours to invent. The central challenge ahead is to advance labor market opportunities to meet, complement, and shape technological innovations. “The economic history of the twentieth century shows that a healthy labor market can serve as the foundation for shared prosperity. Well-designed institutions foster opportunity, buttress economic security, and spur democratic participation. The US must commit to rebuilding this foundation in the twenty-first century. It needs to strengthen and build these institutions, launch new investments, and forge policies that ensure that work remains a central, rewarded, esteemed, and economically viable avenue for most adults to prosper.”
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