By Christopher Mims
Since the 1970s, when automated teller machines arrived, the
number of bank tellers in America has more than doubled. James
Bessen, an economist who teaches at Boston University School of
Law, points to that seeming paradox amid new concerns that
automation is "stealing" human jobs. To the contrary, he says, jobs
and automation often grow hand in hand.
Sometimes, of course, machines really do replace humans, as in
agriculture and manufacturing, says Massachusetts Institute of
Technology labor economist David Autor in a succinct and
illuminating TED talk, which could have served as the headline for
this column. Across an entire economy, however, Dr. Autor says
that's never happened.
The threat that machines pose to workers is in the news again,
after an election that turned on the frustration of working-class
voters. Last week, Amazon.com Inc. introduced Amazon Go, a store
Three days later, President-elect Donald Trump nominated Andy
Puzder, chief executive of CKE Restaurants Holdings Inc., the
parent company of Hardee's and Carl's Jr. chains, to be secretary
of labor. Mr. Puzder has said that self-serve ordering kiosks, like
those recently unveiled by McDonald's Corp., will help his company
Such developments are worrying. But a long trail of empirical
evidence shows that the increased productivity brought about by
automation and invention ultimately leads to more wealth, cheaper
goods, increased consumer spending power and ultimately, more
In the case of bank tellers, the spread of ATMs meant bank
branches could be smaller, and therefore, cheaper. Banks opened
more branches, and in total employed more tellers, Mr. Bessen
Some individuals are uprooted and suffer. In 1900, 40% of U.S.
workers toiled in agriculture; today, that figure is less than 2%.
Manufacturing employment in industrialized countries has declined
in recent decades, as fewer people make more goods. But society, on
the whole, has come out ahead.
It's true that technology alters the quality, as well as the
quantity, of jobs. Ian Stewart, chief U.K. economist at Deloitte
LLP in the U.K., co-wrote a paper last year that used census data
as far back as the late 1700s to examine the changing nature of
jobs in the U.K., cradle of the industrial revolution.
The authors found big increases in both low-paying and
high-paying jobs. There are more barbers and barkeepers. But there
also are more accountants and nurses, reflecting the rising
complexity of the modern economy.
Paradoxically, says Mr. Stewart, many of the fields most
transformed by technology have produced the biggest increases in
employment, from medicine to management consulting. "What we saw
was that machines and people were highly complementary," he
Such bifurcated labor markets have ill effects. Disappearing
factory jobs have largely been replaced by jobs in the service
sector, where highly skilled workers, like doctors and computer
programmers, are paid more, while many others see to the comfort
and health of the affluent. In the middle, wages have stagnated,
helping spawn our current age of populism.
"The era of mass manufacturing employment in the 1960s and 1970s
was a good thing," says Dr. Autor. "It created a lot of good jobs,
it needed a lot of hands and eyes, and required some skills but not
an enormous skill set. The work was relatively high value added."
But, he adds, that era is for the most part behind us.
That's helped fuel arguments from pundits, technologists and
armchair economists that this time is different, that the emerging
combination of robotics and artificial intelligence -- already
spawning robot security guards and self-driving trucks -- will
render many people permanently unemployable.
I'm more optimistic. For all the recent advances in artificial
intelligence, such techniques are largely applied to narrow areas,
such as recognizing images and processing speech. Humans can do all
these things and more, which allows us to transition to new kinds
Some of my fellow optimists worry about the people being left
behind. "The exact same thing is happening that has always happened
-- we're evolving, and the jobs are changing," says Rob Nail, CEO
of Singularity University in Silicon Valley. "The one major
difference, however is that the time of change is compressing
because the pace of technology is moving exponentially."
Mr. Bessen, the Boston University economist, says the problem is
not "mass unemployment, it's transitioning people from one job to
Other countries devote more resources than the U.S. to
cushioning and retraining displaced workers. As a share of gross
domestic product, Denmark spends 25 times as much, says Dr.
He offers another historical example. Near the end of the 19th
century, America's agricultural states faced the prospect of mass
unemployment as farms automated.
In response, they created the "high school movement," which
required everyone to stay in school until age 16. It was hugely
expensive, both because of the new schools and teachers, but also
because these young people could no longer work on the farm. But it
better prepared workers for 20th century factory jobs and fueled
the explosion in college attendance after World War II.
As a country, "We're very wealthy," says Dr. Autor. "If anyone
can do anything about this transition, it's us."
Write to Christopher Mims at email@example.com
(END) Dow Jones Newswires
December 11, 2016 13:31 ET (18:31 GMT)
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