The Impact of AI and Automation on Employment: Moving Forward or Falling Behind?
AI and automation are not destined to make a particular job worse. Rather, these advancements can eliminate certain roles while also creating new ones. Throughout history, technological developments have led to both job displacement and the emergence of better-paid and more desirable positions. Understanding this dynamic can help us navigate the future of work and the changing job market.
Historical Context of Automation and Job Transformation
Across the 20th century, automation transformed agriculture, making farming much easier and allowing for higher food production with less manual labor. This progress, however, resulted in the displacement of a significant portion of the workforce. Many farmers who lost their jobs were forced to seek new employment opportunities, often in better-paid manufacturing roles.
From 1945 to 1980, the number of manufacturing jobs in the United States grew from 14 million to almost 20 million. However, this positive trend was followed by a significant decline from 2000 to 2010, where the number of manufacturing jobs dropped from around 17 million to just over 12 million. Despite this decrease, production continued to rise due to advancements in automation, leading to the so-called rust belt phenomenon, where factory workers struggled to find new, higher-paying jobs.
Job Skill Levels and Automation
Typically, low-skill jobs are among the first to be automated because they are simpler to replicate. While some workers with lower skills could move to higher-paying jobs, many found themselves trapped in low-wage positions, contributing to the phenomenon known as the hollowing out of the middle class. Evidence of this can be seen in the employment data among men aged 25 to 55, where those with less education have seen sharper declines due to their difficulty in adapting to new employment opportunities.
Rolling Out AI and Future Employment Scenarios
As AI becomes more prevalent, we can expect to see higher-skilled jobs being automated. For instance, AI has already surpassed human performance in tasks such as interpreting X-rays and conducting legal discovery. It is also capable of writing financial reports and sports stories as well as or better than human writers. This pattern suggests that fewer people will climb the income ladder, while many more will be pushed down into low-paying positions, unless we take proactive measures.
While some individuals may transition to more skilled jobs, many will be unable to do so, leading to a large portion of the population facing perpetual unemployment. This scenario would require a significant shift in social welfare policies. An unconditional government payment mechanism, such as a Universal Basic Income (UBI), is crucial for ensuring that individuals have income stability. Unemployment insurance is not suitable for this purpose, as it is designed to support job seekers. In a future where job opportunities are scarce, UBI would provide a consistent income for those who may not be able to find employment.
Without a UBI, consumer demand would dwindle, leading to a slowdown in economic activity. Businesses would struggle to remain profitable without a significant consumer base, potentially resulting in further job losses and economic collapse. Therefore, establishing a UBI can help mitigate the adverse effects of job displacement and ensure that society can sustain itself in this evolving landscape.
Conclusion
The impact of AI and automation on employment is a complex issue that requires careful consideration and strategic planning. By understanding historical trends and future projections, we can better prepare for the challenges and opportunities that lie ahead. Implementing policies such as a Universal Basic Income can help ensure that technological advancements benefit society as a whole, rather than exacerbating inequalities. As we look to the future, it is imperative that we prioritize the well-being of all workers and ensure that the transition to an AI-driven economy is inclusive and just.