Robots won't destroy jobs, but they may destroy the middle class

Will automation take your job away? No, argues economist David Autor in a new paper presented at the Federal Reserve conference in Jackson Hole, Wyoming on Friday. Instead, it'll just push you into a menial low-wage job.

That, at least, has been the recent past of technology's impact on the labor market, Autor suggests. We've seen what he calls "job polarization" where automation has increased the demand for highly skilled managers and creative types, plus the demand for low-paid food prep workers and such. He offers these two charts as evidence:

(David Autor)

This chart shows that across a whole bunch of different European countries, we've seen high-wage jobs grow and low-wage jobs grow while middle-wage jobs shrink. Here's another chart:

(David Autor)

This one shows that across various recent time periods, we've seen job growth at the low end. At times we've also seen job growth at the high end. But at all times, the middle tends to be crowded out.

Autor says this more or less shows the importance of improving education. Someone who might once have been qualified for a pretty good secretarial job is nowadays only going to be qualified for a job at Chipotle, since modern technology reduces the need for secretaries. To save her from the dismal future of a burrito stomping on a human face forever, she needs to be trained up to the level where she can get a job as an app developer or devising burrito marketing campaigns.

The other view, which Autor doesn't really mention, is that perhaps a strong labor movement could turn burrito-rolling into a highly paid job. The most likely answer, I think, is that to the extent you try to transform low-wage work into middle-wage work you simply encourage those newly middle class jobs to be automated.

The way Autor puts it is that "if the nineteenth century U.S. labor force were suddenly restored in the twentieth century, a large fraction of workers would be surely unemployable due to their exceedingly low levels of education — averaging approximately nine years of completed schooling."

It's not that American workers from 1864 were inherently useless or unemployable. It's just that many of them didn't have the skills to do anything that someone would want to pay someone to do in 2014 — the vast staple commodity crop fields of the American midwest only need so many workers in a world of highly efficient agricultural machinery.

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