Autor Paper at Jackson Hole: Automation Is Polarizing the Labor Market
In an essay in The Wall Street Journal last month, Harvard University economist Lawrence
Summers envisioned a world in which computers and machines displace a vast new array of human work, creating an economy that produced few opportunities and sources of income for actual people.
Taxis wouldn’t need drivers, nor retailers cashiers or banks financial analysts. “The challenge for economic policy will increasingly be generating enough work for all who need work for income, purchasing power and dignity,” he argued.
David Autor, a Massachusetts Institute of Technology economics professor, argues in a paper to be presented Friday to central bankers at the Kansas City Fed’s Jackson Hole symposium that automation is creating a different kind of problem for the economy. Rather than destroying jobs broadly, it is polarizing the labor market. While thinning out the ranks of middle-class jobs easily replaced by machines, he argues automation is increasing the ranks of low-skilled workers who perform tasks that can’t easily be displaced by machines — like cooks or home health workers — and the ranks of high-end workers with abstract thinking skills that computers can’t match.
In 1979, middle-income jobs in sales, office work, manufacturing and administrative work accounted for 60% of U.S. employment. By 2012, these jobs had declined to 46% of employment, while the share of high-end and low-end work expanded, Mr. Autor shows. A similar pattern emerges in Europe, where middle-income jobs have declined as a share of total employment.
The biggest beneficiaries are people at the high end. “From 1979 through 2007, wages rose consistently across all three abstract task-intensive categories of professional, technical and managerial occupations,” Mr. Autor argued. Their work tends to be complemented by machines, he argued, making their services more valuable....MORE