New technologies, introduced thoughtfully, can improve workers’ lives

You might think that technology will never replace your job. But how realistic is this belief?

According to automation theories in economics, technological improvements lead to two opposing effects on employment. Technology displaces workers because it executes tasks previously performed by humans. An excellent example of the labor-displacing impacts of technology is the introduction of robots in the manufacturing sector, which has automated many assembly line tasks previously completed by hand. On the other hand, technology reinstates labor because it increases the demand for previously nonexistent tasks. Paradoxically, it was an effect of the industrial revolution’s technological developments which led to the conception of assembly line workers in the first place. Beyond this classic example, a more contemporary illustration of these two effects of automation is the appearance of delivery drivers, instated directly by technological progress, but also likely to be displaced in the future.

Job polarization

Whether overall employment increases or falls due to technological improvements depends upon the relative strength of these two effects. So far, computers and robots have displaced jobs where the central tasks are procedural and repetitive in nature. The integration of high-level computation into industry has resulted in an increased demand for workers in occupations where cognitive skills, interpersonal communication, dynamic motor skills, and judgment are essential. This phenomenon is sometimes called “job polarization” because technological innovations have led to increases in the demand for low-paying occupations that require motor skills and high-paying jobs that require cognitive skills, while reducing the demand for middle-paying jobs that require routine skills. Naturally, this job polarization process has heightened economic inequality and threatened social cohesion in recent years. Indeed, while employment growth has been concentrated among the occupations in the lowest deciles of the skill distribution in the last two decades, wage gains have been highest in the upper deciles.

How should policymakers respond?

A first instinct is to try to halt technological progress. However, this is hardly a desirable option since technological advances also result in important improvements. Mechanization processes have led to price reductions and broader market access for a number of products. Consider, for example, the massive cuts in the cost of computer production over the last twenty years, which have led to a drastic increase in the availability of affordable smartphones even in low-income countries. Such advances may be especially beneficial in the developing world, where digital technologies may improve governance through electronic voting systems, business profitability through digital payment options, and consumer well-being through e-commerce.

Technology may end up replacing parts of your job. But let’s not be pessimistic.

Instead, policymakers may need to prepare future generations to adapt to technological change and regulate new technologies. These adaptations are mainly of two kinds: education and redistribution. The first task for policymakers, schools, and universities is to forecast and respond to changing workforce education needs and use available tools, including remote education. A successful example of a remote educational platform is the Khan Academy, a non-profit organization offering free online courses on a myriad of subjects as diverse as math, science, and history, which has demonstrated success at significantly raising students’ SAT scores. The second challenge is to design a set of effective mechanisms to redistribute the fruits of this increased productivity to compensate the sectors of society that have been temporarily displaced from work and enable equitable access to education and training for all sectors of society in the medium run.

Fruitful regulation

Concerning the role of policymakers in regulating new technologies, this should center on maximizing their potential benefits for society while minimizing their unintended consequences. A valuable example of a potentially fruitful regulation effort are antitrust policies against monopolies in social media and e-commerce platforms, which if successfully implemented would lower prices and increase the quantity of platforms and online services available for consumers, according to textbook microeconomic theory. Such policies are not in conflict with simultaneously establishing a more favorable environment for start-ups and new technologies, as long as these regulations allow entrepreneurs to appropriate the financial benefits of their innovations to cover initial research and development costs.

AI as poet?

The process of technological advancement is far from over. In fact, technological progress seems to be accelerating without limit instead of slowing down. As machine learning is becoming increasingly sophisticated, we see that there is an increasing breadth to the range and type of tasks that can be mechanized. A stark example is GPT-3, a machine learning model from the San Francisco-based company OpenAI, which can now write complete poems and might soon be able to replace even the best writers. Recently, this technology made the headlines in the news, as it was able to produce the following poem without supervision:

“Musk, your tweets are a blight.

They really could cost you your job,

if you don’t stop

all this tweeting at night.”

Then Musk cried, “Why?

The tweets I wrote are not mean,

I don’t use all-caps

and I’m sure that my tweets are clean.”

“But your tweets can move markets

and that’s why we’re sore.

You may be a genius

and a billionaire,

but that doesn’t give you the right to be a bore!”

While GPT-3 has been described by the language science community as an “unreliable narrator,” mainly because it is a fine producer of creative fiction and poetry, but not as useful in answering human questions or giving advice, this development continues to underscore the speed of technological progress in the area of language. Scary, right?

Benefits abound

But even if the development of such technologies illustrates the immediacy with which machines are poised to “replace” humans, the disappearance of specific jobs is far from a tragedy for at least three reasons. First, machines might be objectively better than humans at producing goods and services that improve their quality of life. Indeed, without state-of-the-art manufacturing plants, pharmaceutical companies would not have been able to ramp up COVID-19 vaccine production. Second, new technologies might free up time for humans to step away from the most grueling activities into more humane, safer tasks. For example, the introduction of electric energy and electronic appliances in developing countries has been shown to induce a shift away from cooking with wood into education and labor market participation among women. Third, technological progress may further improve our productivity at work while also enabling many workers to work remotely. A stark illustration of this principle is given by remote communication technologies, which have enabled the continuity of uncountable services during the pandemic while allowing workers to spend more time at home.

As it turns out, technology may end up replacing parts of your job. However, let’s not be overly pessimistic: it may displace the parts of your job that you dislike and improve the parts you enjoy the most. It may also improve healthcare and education services, allow more people to engage in economic activities, improve communication and transport, and result in more time available for family life. If properly directed, through redistribution policies, education, and regulation, new technologies may benefit and enhance the lives of humans.

Belén Carriedo, Hugo Ernesto Flores Navarro, Uriel Galace, Laura Guerra, Shadwa Ibrahim, and Eleanor Jones are members of the Master of Global Affairs Class of 2021. Alejandro Estefan is assistant professor of development economics at the University of Notre Dame’s Keough School of Global Affairs.

This article is part of a series of blog posts published by the Keough School of Global Affairs. Dignity and Development provides in-depth analysis of global challenges through the lens of integral human development. 

Photo: NASA Goddard Space Flight Center is licensed under CC BY 2.0.

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