Automation, management, and the future of work
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Deep Dive
What has been the trend in employment rates for men aged 25 to 55 in the United States since the 1970s?
Employment rates for men aged 25 to 55 in the United States have declined since the 1970s. In the 1970s, about 90% of men in this age range were employed, but the current number is around 86%, representing approximately 2 million fewer men working today compared to 20-25 years ago.
How has the share of men with less than a bachelor's degree reporting zero weeks of work per year changed over time?
The share of men with less than a bachelor's degree reporting zero weeks of work per year has increased significantly. In the mid-1980s, this number was about 8%, but today it is around 14%, meaning roughly one in seven men in this age range with less than a bachelor's degree is idle from the labor force for an entire year.
What has been the impact of automation on manufacturing employment in the United States since the 1970s?
Manufacturing employment in the United States has declined sharply since the 1970s. In the 1970s, there were about 18 million manufacturing jobs, but this number dropped by 2 million in the 1980s and by 6 million between 2000 and 2010. There has been little rebound in manufacturing jobs since then.
What are the two main stories explaining the decline in manufacturing jobs in the United States and the UK?
The two main stories explaining the decline in manufacturing jobs are exposure to trade, particularly with China, and automation. Sectors most exposed to trade with China also automated the most, leading to fewer workers needed for the same level of production.
How has the labor share of income in the manufacturing sector changed since the 1980s?
The labor share of income in the manufacturing sector has declined since the 1980s. Previously, about one-third of income in the manufacturing sector went to workers, but today it is around one-quarter, representing a 7-8 percentage point decline.
What does the historical example of the agricultural sector in the United States tell us about technological displacement?
The historical example of the agricultural sector in the United States shows that technological displacement does not necessarily lead to overall economic destabilization. In 1910, one-third of men worked in agriculture, but by today, only 3% do. Workers displaced by automation in agriculture were reabsorbed into other growing sectors.
What are the three key questions to consider when evaluating the labor market effects of technology?
The three key questions are: 1) Is the technology a complement or substitute with workers? 2) If the technology is a substitute, how easy is it for displaced workers to be reallocated to growing sectors? 3) Are there barriers to the adjustment of workers being reabsorbed into the economy?
What are the potential political risks associated with technological disruption and worker displacement?
Technological disruption and worker displacement can lead to political risks, including increased inequality, concentration of wealth, and the rise of populism. Historical examples show that such disruptions can lead to social and political tensions, including violence and shifts toward authoritarianism.
How can policymakers address the challenges of automation and AI in fostering inclusive economic progress?
Policymakers can address these challenges by investing in workforce retraining, implementing legal and regulatory measures to redistribute wealth, and promoting labor-complementary AI. Additionally, fostering remote work opportunities and encouraging industry-led training initiatives can help mitigate the negative effects of automation.
What are the potential effects of AI, fusion energy, and quantum computing on labor markets in the medium term?
The effects of AI, fusion energy, and quantum computing on labor markets will depend on whether these technologies act as complements or substitutes for workers. The speed of technological change and the ability of workers to adjust to new sectors will be critical factors. While some workers may benefit from increased productivity, others may face displacement, requiring policy interventions to facilitate transitions.
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