SESSION 3 - Worrying about automation and jobs

Question 1

What does the author say about worrying for future and jobs?

Answer 1

*Robots: takeover many mechanical processes
*Computer-based algorithms are replacing human decision-makers
*Artificial intelligence can analyse and learn from increasingly available “big data”

Question 2

Whats the main concern?

Answer 2

Renewed concern is that the process of technological change appears to be faster than ever before. Innovation no longer threatens simply the production-line jobs of blue-collar or unskilled workers, but also those of the articulate middle classes. These authors suggest that algorithms and artificial intelligence will soon supersede the skills of many lawyers, doctors, and architects. This in turn has led to case being made for radical new policies such as a tax on robots, compulsory cuts in working hours

Question 3

What is Frey’s opinion regarding the industrial revolution and job destruction?

Answer 3

Frey’s view is that technological change in this period was primarily ‘worker-replacing’, keeping wages down, and thus two generations of workers gained little. In the nineteenth century working-class living standards began to rise significantly, ‘worker-enabling’.This means technologies enable them to perform new functions, making them more productive in a way that also increases their wages”

Question 4

What is the problem with Frey’s view?

Answer 4

One problem with Frey’s approach is that there is very little evidence of widespread job loss due to technological innovation. In the United States factory workers have not lost their jobs primarily because of automation, but because of competition from low-cost competitors in China or other industrializing nations. Over the period 1998–2008, on average 2.5 million jobs were ‘lost’ in each year while 2.67 million were ‘created’. Most of the ‘lost jobs were lost not because of technological change, but because of business model failures, poor cost control, domestic and foreign competitors, changes of consumer taste, and so forth.

Question 5

What about policies?

Answer 5

One widely discussed proposal is to put taxes on robots. Considering such a tax as protecting jobs, but they also focus on the way in which unemployment and lower wages resulting from employing robots would reduce income tax.
*Problems with that:
-Defining a robot is hard
-There would lobbying (medical robots)

Another type of policy intervention is the introduction of a universal basic income (UBI). A UBI in its simplest form is the payment of a regular income at a single fixed level to an individual regardless of circumstances.
*Problems:
-Costly
-Unpredictable effect on labour supply

Question 6

Whats the conclusion?

Answer 6

-In conclusion, the pace of change is accelerating and today’s labor market entrants have to be prepared to be flexible and enterprising. Traditional career paths will not be as stable in the future as they have been in the past, and many human workers are likely to find that automation
-There is no obvious way as yet in which government intervention can improve the workings of the free market to maintain employment.
-Policymakers need to reflect that over-hasty intervention in labor markets which are currently performing pretty well could do more harm than good.