Martin Ford continues his thoughts on:
The Mythology of the Future Job Market
Angry Bear recently picked up an article by Michael Lind at Salon on the jobs of tomorrow. The story notes that advancing job automation technology is going to be the primary force that will shape the future job market. That’s something that I have also been talking about here.
Lind’s article then goes on to do a pretty good job of fleshing out the conventional wisdom on where jobs are going to come from in the future:
The most numerous and stable jobs of tomorrow will be those that cannot be offshored, because they must be performed on U.S. soil, and also cannot be automated, either because they require a high degree of creativity or because they rely on the human touch in face-to-face interactions. The latter are sometimes called “proximity services” and they include the fastest-growing occupations, healthcare and education.
So we are led to expect that, over time, the bulk of the workforce is going to migrate into jobs that require creativity or innovation, or jobs that depend on uniquely human traits or talents. Furthermore, these new jobs are going to require that any innovation, creativity or personal attention occur pretty much while actually holding onto your customer’s hand—so that the job can’t be offshored. Is that really a likely scenario?
The first thing to note is that the two sectors singled out as being promising—healthcare and education—are by no means exempt from automation. Specific healthcare tasks are likely to be automated, while decision making and patient monitoring may migrate increasingly into expert systems.
Automation is clearly going to be a major factor in specialized, vocational-type education and training. Today in California, you can get your real estate license completely online. You won’t encounter an actual human being until you run into a proctor at the licensing exam. A similar thing has happened with the traffic school programs that drivers have to complete after getting a ticket. If training can be offered online, it will be. I see no reason why something similar won’t eventually occur in college education, especially since new graduates have been seeing a lower financial return on their investment. It seems likely that if the credential is worth less, many people will gravitate toward less expensive, automated online learning.
The biggest problem with the conventional wisdom is the number of jobs we are talking about. In the U.S. we have a workforce of around 140 million workers. The majority of these jobs are basically routine and repetitive in nature. At a minimum, tens of millions of jobs will be subject to automation, self-service technologies or offshoring. The automation process will never stop advancing: computer hardware and, perhaps most importantly, software will continue to relentlessly improve. Therefore, simply upgrading worker skills is not going to be a long-term solution; automation will eventually (and perhaps rapidly) catch up. If you are willing to look far enough into the future, the number of impacted jobs is potentially staggering.
Can we really expect that such an enormous number of these supposedly safe creative/“proximity service” jobs are going to materialize? And even if they do appear, can we reasonably anticipate that millions of workers who are now employed as cashiers, accounting clerks, materials movers—or even as college-educated “Dilberts”—are going to be able to successfully transition into those jobs?
Historically, the job market has always looked like a pyramid in terms of worker skills and capabilities. At the top, a relatively small number of highly skilled professionals and entrepreneurs have been responsible for most creativity and innovation. The vast majority of the workforce has always been engaged in work that is fundamentally routine and repetitive. As various sectors have mechanized or automated, workers have transitioned from routine jobs in one sector to routine jobs in another. In many cases, skills have been upgraded, but the work has nonetheless remained routine in nature. So, historically, there has been a reasonable match between the types of work required by the economy and the capabilities of the available workforce.
Now, as it becomes clear that automation is going to ultimately consume the entire base of the job skills pyramid, the conventional wisdom is that we are going to somehow cram everyone into the very top. And even if we somehow manage to do that, the jobs will be highly susceptible to offshoring, so we also have to require that the jobs be somehow anchored locally. I think this is somewhat analogous to having the agricultural sector mechanize and then expecting that everyone will get a job driving a tractor. The numbers don’t work. The problem with the conventional wisdom is that it underestimates the long-term impact of automation, and it expects too much in the way of occupational acrobatics from the average worker.
Yet another problem is that even if all these creative jobs materialize, the result would likely be far from optimal. Jobs that rely heavily on creativity, talent or unique personality traits (think authors, actors, musicians, commission sales people) very often have a power law income distribution. In other words, a few people do phenomenally well, while nearly everyone else struggles to survive. Even if vast numbers of workers could successfully migrate into these more creative areas (and I doubt that), it would probably do very little to slow down our drive toward ever-increasing income inequality.
The bottom line is that, at some point, we are all going to have to wake up to reality. It will be a long, arduous trek across the wasteland of denial, but someday all of us will have to start thinking the unthinkable and saying the unsayable: The jobs of the future…are not going to be there. Jobs are disappearing, and we will have to somehow adapt to that. In the long run, the solution will likely have to involve some type of job sharing, and it will also have to incorporate income supplementation for most people. It’s almost impossible to imagine how that will happen in a world that includes Fox News, but I think it will nonetheless have to happen. Perhaps the chances of it happening will improve when conservatives and business owners begin to recognize that workers and consumers are basically the same people and that the vast majority of consumer spending is supported by wage income.
The good news, though, is that you can ignore all this because it’s wrong. Many economists will tell you so. Ask any well-regarded economist such as Krugman, DeLong, Mankiw or Thoma. None of them are really worried about this, or if they are, they’re certainly not talking about it. They may nibble at the edges of this issue. Yes, we might have some structural unemployment for a few years while the economy adjusts and new jobs are created, but, no, jobs aren’t going to disappear. The economy always creates jobs; it gravitates toward full employment.
Why? Because it always has. Economists have studied it and analyzed reams of data from the past. They’ve built mathematical models, and the models say there will be jobs. It’s a rule. Hundreds of years ago there were lots of jobs for guys who shoveled coal into steam engines. Now those jobs are gone, and we all have jobs that people back then could never have imagined. It will be the same this time around. So don’t worry. And leave a cookie out on Christmas Eve. Santa might be hungry.
Martin Ford is the author of The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future and has a blog at econfuture.wordpress.com.