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David Autor: Will automation take away all our jobs?
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Here's a paradox you don't hear much about: despite a century of creating machines to do our work for us, the proportion of adults in the US with a job has consistently gone up for the past 125 years. Why hasn't human labor become redundant and our skills obsolete? In this talk about the future of work, economist David Autor addresses the question of why there are still so many jobs and comes up with a surprising, hopeful answer.
David Autor - Economist
David Autor's work assesses the labor market consequences of technological change and globalization. Full bio
David Autor's work assesses the labor market consequences of technological change and globalization. Full bio
Double-click the English transcript below to play the video.
00:13
Here's a startling fact:
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in the 45 years since the introduction
of the automated teller machine,
of the automated teller machine,
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those vending machines that dispense cash,
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the number of human bank tellers
employed in the United States
employed in the United States
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has roughly doubled,
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from about a quarter of a million
to a half a million.
to a half a million.
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A quarter of a million in 1970
to about a half a million today,
to about a half a million today,
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with 100,000 added since the year 2000.
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These facts, revealed in a recent book
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by Boston University
economist James Bessen,
economist James Bessen,
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raise an intriguing question:
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what are all those tellers doing,
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and why hasn't automation
eliminated their employment by now?
eliminated their employment by now?
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If you think about it,
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many of the great inventions
of the last 200 years
of the last 200 years
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were designed to replace human labor.
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Tractors were developed
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to substitute mechanical power
for human physical toil.
for human physical toil.
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Assembly lines were engineered
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to replace inconsistent human handiwork
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with machine perfection.
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Computers were programmed to swap out
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error-prone, inconsistent
human calculation
human calculation
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with digital perfection.
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These inventions have worked.
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We no longer dig ditches by hand,
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pound tools out of wrought iron
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or do bookkeeping using actual books.
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And yet, the fraction of US adults
employed in the labor market
employed in the labor market
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is higher now in 2016
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than it was 125 years ago, in 1890,
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and it's risen in just about every decade
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in the intervening 125 years.
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This poses a paradox.
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Our machines increasingly
do our work for us.
do our work for us.
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Why doesn't this make our labor redundant
and our skills obsolete?
and our skills obsolete?
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Why are there still so many jobs?
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(Laughter)
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I'm going to try to answer
that question tonight,
that question tonight,
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and along the way, I'm going to tell you
what this means for the future of work
what this means for the future of work
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and the challenges that automation
does and does not pose
does and does not pose
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for our society.
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Why are there so many jobs?
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There are actually two fundamental
economic principles at stake.
economic principles at stake.
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One has to do with human genius
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and creativity.
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The other has to do
with human insatiability,
with human insatiability,
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or greed, if you like.
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I'm going to call the first of these
the O-ring principle,
the O-ring principle,
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and it determines
the type of work that we do.
the type of work that we do.
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The second principle
is the never-get-enough principle,
is the never-get-enough principle,
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and it determines how many jobs
there actually are.
there actually are.
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Let's start with the O-ring.
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ATMs, automated teller machines,
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had two countervailing effects
on bank teller employment.
on bank teller employment.
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As you would expect,
they replaced a lot of teller tasks.
they replaced a lot of teller tasks.
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The number of tellers per branch
fell by about a third.
fell by about a third.
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But banks quickly discovered that it
also was cheaper to open new branches,
also was cheaper to open new branches,
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and the number of bank branches
increased by about 40 percent
increased by about 40 percent
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in the same time period.
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The net result was more branches
and more tellers.
and more tellers.
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But those tellers were doing
somewhat different work.
somewhat different work.
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As their routine,
cash-handling tasks receded,
cash-handling tasks receded,
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they became less like checkout clerks
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and more like salespeople,
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forging relationships with customers,
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solving problems
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and introducing them to new products
like credit cards, loans and investments:
like credit cards, loans and investments:
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more tellers doing
a more cognitively demanding job.
a more cognitively demanding job.
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There's a general principle here.
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Most of the work that we do
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requires a multiplicity of skills,
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and brains and brawn,
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technical expertise and intuitive mastery,
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perspiration and inspiration
in the words of Thomas Edison.
in the words of Thomas Edison.
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In general, automating
some subset of those tasks
some subset of those tasks
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doesn't make the other ones unnecessary.
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In fact, it makes them more important.
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It increases their economic value.
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Let me give you a stark example.
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In 1986, the space shuttle Challenger
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exploded and crashed back down to Earth
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less than two minutes after takeoff.
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The cause of that crash, it turned out,
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was an inexpensive rubber O-ring
in the booster rocket
in the booster rocket
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that had frozen on the launchpad
the night before
the night before
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and failed catastrophically
moments after takeoff.
moments after takeoff.
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In this multibillion dollar enterprise
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that simple rubber O-ring
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made the difference
between mission success
between mission success
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and the calamitous death
of seven astronauts.
of seven astronauts.
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An ingenious metaphor
for this tragic setting
for this tragic setting
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is the O-ring production function,
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named by Harvard economist Michael Kremer
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after the Challenger disaster.
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The O-ring production function
conceives of the work
conceives of the work
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as a series of interlocking steps,
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links in a chain.
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Every one of those links must hold
for the mission to succeed.
for the mission to succeed.
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If any of them fails,
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the mission, or the product
or the service,
or the service,
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comes crashing down.
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This precarious situation
has a surprisingly positive implication,
has a surprisingly positive implication,
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which is that improvements
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in the reliability
of any one link in the chain
of any one link in the chain
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increases the value
of improving any of the other links.
of improving any of the other links.
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Concretely, if most of the links
are brittle and prone to breakage,
are brittle and prone to breakage,
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the fact that your link
is not that reliable
is not that reliable
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is not that important.
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Probably something else will break anyway.
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But as all the other links
become robust and reliable,
become robust and reliable,
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the importance of your link
becomes more essential.
becomes more essential.
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In the limit, everything depends upon it.
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The reason the O-ring was critical
to space shuttle Challenger
to space shuttle Challenger
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is because everything else
worked perfectly.
worked perfectly.
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If the Challenger were
kind of the space era equivalent
kind of the space era equivalent
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of Microsoft Windows 2000 --
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(Laughter)
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the reliability of the O-ring
wouldn't have mattered
wouldn't have mattered
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because the machine would have crashed.
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(Laughter)
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Here's the broader point.
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In much of the work that we do,
we are the O-rings.
we are the O-rings.
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Yes, ATMs could do
certain cash-handling tasks
certain cash-handling tasks
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faster and better than tellers,
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but that didn't make tellers superfluous.
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It increased the importance
of their problem-solving skills
of their problem-solving skills
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and their relationships with customers.
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The same principle applies
if we're building a building,
if we're building a building,
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if we're diagnosing
and caring for a patient,
and caring for a patient,
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or if we are teaching a class
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to a roomful of high schoolers.
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As our tools improve,
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technology magnifies our leverage
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and increases the importance
of our expertise
of our expertise
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and our judgment and our creativity.
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And that brings me
to the second principle:
to the second principle:
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never get enough.
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You may be thinking, OK, O-ring, got it,
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that says the jobs that people do
will be important.
will be important.
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They can't be done by machines,
but they still need to be done.
but they still need to be done.
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But that doesn't tell me
how many jobs there will need to be.
how many jobs there will need to be.
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If you think about it,
isn't it kind of self-evident
isn't it kind of self-evident
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that once we get sufficiently
productive at something,
productive at something,
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we've basically
worked our way out of a job?
worked our way out of a job?
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In 1900, 40 percent of all US employment
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was on farms.
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Today, it's less than two percent.
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Why are there so few farmers today?
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It's not because we're eating less.
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(Laughter)
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A century of productivity
growth in farming
growth in farming
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means that now,
a couple of million farmers
a couple of million farmers
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can feed a nation of 320 million.
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That's amazing progress,
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but it also means there are
only so many O-ring jobs left in farming.
only so many O-ring jobs left in farming.
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So clearly, technology can eliminate jobs.
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Farming is only one example.
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There are many others like it.
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But what's true about a single product
or service or industry
or service or industry
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has never been true
about the economy as a whole.
about the economy as a whole.
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Many of the industries
in which we now work --
in which we now work --
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health and medicine,
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finance and insurance,
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electronics and computing --
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were tiny or barely existent
a century ago.
a century ago.
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Many of the products
that we spend a lot of our money on --
that we spend a lot of our money on --
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air conditioners, sport utility vehicles,
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computers and mobile devices --
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were unattainably expensive,
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or just hadn't been invented
a century ago.
a century ago.
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As automation frees our time,
increases the scope of what is possible,
increases the scope of what is possible,
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we invent new products,
new ideas, new services
new ideas, new services
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that command our attention,
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occupy our time
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and spur consumption.
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You may think some
of these things are frivolous --
of these things are frivolous --
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extreme yoga, adventure tourism,
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Pokémon GO --
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and I might agree with you.
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But people desire these things,
and they're willing to work hard for them.
and they're willing to work hard for them.
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The average worker in 2015
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wanting to attain
the average living standard in 1915
the average living standard in 1915
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could do so by working
just 17 weeks a year,
just 17 weeks a year,
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one third of the time.
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But most people don't choose to do that.
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They are willing to work hard
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to harvest the technological bounty
that is available to them.
that is available to them.
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Material abundance has never
eliminated perceived scarcity.
eliminated perceived scarcity.
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In the words of economist
Thorstein Veblen,
Thorstein Veblen,
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invention is the mother of necessity.
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Now ...
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So if you accept these two principles,
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the O-ring principle
and the never-get-enough principle,
and the never-get-enough principle,
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then you agree with me.
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There will be jobs.
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Does that mean there's
nothing to worry about?
nothing to worry about?
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Automation, employment, robots and jobs --
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it'll all take care of itself?
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No.
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That is not my argument.
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Automation creates wealth
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by allowing us to do
more work in less time.
more work in less time.
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There is no economic law
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that says that we
will use that wealth well,
will use that wealth well,
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and that is worth worrying about.
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Consider two countries,
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Norway and Saudi Arabia.
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Both oil-rich nations,
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it's like they have money
spurting out of a hole in the ground.
spurting out of a hole in the ground.
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(Laughter)
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But they haven't used that wealth
equally well to foster human prosperity,
equally well to foster human prosperity,
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human prospering.
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Norway is a thriving democracy.
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By and large, its citizens
work and play well together.
work and play well together.
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It's typically numbered
between first and fourth
between first and fourth
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in rankings of national happiness.
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Saudi Arabia is an absolute monarchy
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in which many citizens
lack a path for personal advancement.
lack a path for personal advancement.
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It's typically ranked 35th
among nations in happiness,
among nations in happiness,
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which is low for such a wealthy nation.
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Just by way of comparison,
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the US is typically ranked
around 12th or 13th.
around 12th or 13th.
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The difference between these two countries
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is not their wealth
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and it's not their technology.
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It's their institutions.
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Norway has invested to build a society
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with opportunity and economic mobility.
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Saudi Arabia has raised living standards
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while frustrating
many other human strivings.
many other human strivings.
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Two countries, both wealthy,
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not equally well off.
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And this brings me
to the challenge that we face today,
to the challenge that we face today,
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the challenge that
automation poses for us.
automation poses for us.
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The challenge is not
that we're running out of work.
that we're running out of work.
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The US has added 14 million jobs
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since the depths of the Great Recession.
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The challenge is that many of those jobs
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are not good jobs,
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and many citizens
cannot qualify for the good jobs
cannot qualify for the good jobs
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that are being created.
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Employment growth in the United States
and in much of the developed world
and in much of the developed world
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looks something like a barbell
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with increasing poundage
on either end of the bar.
on either end of the bar.
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On the one hand,
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you have high-education, high-wage jobs
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like doctors and nurses,
programmers and engineers,
programmers and engineers,
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marketing and sales managers.
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Employment is robust in these jobs,
employment growth.
employment growth.
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Similarly, employment growth
is robust in many low-skill,
is robust in many low-skill,
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low-education jobs like food service,
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cleaning, security,
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home health aids.
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Simultaneously, employment is shrinking
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in many middle-education,
middle-wage, middle-class jobs,
middle-wage, middle-class jobs,
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like blue-collar production
and operative positions
and operative positions
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and white-collar
clerical and sales positions.
clerical and sales positions.
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The reasons behind this contracting middle
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are not mysterious.
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Many of those middle-skill jobs
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12:09
use well-understood rules and procedures
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that can increasingly
be codified in software
be codified in software
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and executed by computers.
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The challenge that
this phenomenon creates,
this phenomenon creates,
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what economists call
employment polarization,
employment polarization,
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is that it knocks out rungs
in the economic ladder,
in the economic ladder,
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shrinks the size of the middle class
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and threatens to make us
a more stratified society.
a more stratified society.
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On the one hand, a set of highly paid,
highly educated professionals
highly educated professionals
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doing interesting work,
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on the other, a large number
of citizens in low-paid jobs
of citizens in low-paid jobs
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whose primary responsibility is to see
to the comfort and health of the affluent.
to the comfort and health of the affluent.
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That is not my vision of progress,
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and I doubt that it is yours.
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But here is some encouraging news.
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We have faced equally momentous
economic transformations in the past,
economic transformations in the past,
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and we have come
through them successfully.
through them successfully.
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In the late 1800s and early 1900s,
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when automation was eliminating
vast numbers of agricultural jobs --
vast numbers of agricultural jobs --
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remember that tractor? --
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the farm states faced a threat
of mass unemployment,
of mass unemployment,
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a generation of youth
no longer needed on the farm
no longer needed on the farm
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but not prepared for industry.
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Rising to this challenge,
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they took the radical step
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of requiring that
their entire youth population
their entire youth population
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remain in school
and continue their education
and continue their education
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to the ripe old age of 16.
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13:33
This was called the high school movement,
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13:35
and it was a radically
expensive thing to do.
expensive thing to do.
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Not only did they have
to invest in the schools,
to invest in the schools,
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13:40
but those kids couldn't work
at their jobs.
at their jobs.
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It also turned out to be
one of the best investments
one of the best investments
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the US made in the 20th century.
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It gave us the most skilled,
the most flexible
the most flexible
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and the most productive
workforce in the world.
workforce in the world.
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13:54
To see how well this worked,
imagine taking the labor force of 1899
imagine taking the labor force of 1899
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13:58
and bringing them into the present.
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14:00
Despite their strong backs
and good characters,
and good characters,
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14:03
many of them would lack
the basic literacy and numeracy skills
the basic literacy and numeracy skills
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14:07
to do all but the most mundane jobs.
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Many of them would be unemployable.
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What this example highlights
is the primacy of our institutions,
is the primacy of our institutions,
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most especially our schools,
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in allowing us to reap the harvest
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14:21
of our technological prosperity.
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14:24
It's foolish to say
there's nothing to worry about.
there's nothing to worry about.
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Clearly we can get this wrong.
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14:29
If the US had not invested
in its schools and in its skills
in its schools and in its skills
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a century ago with
the high school movement,
the high school movement,
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14:35
we would be a less prosperous,
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14:37
a less mobile and probably
a lot less happy society.
a lot less happy society.
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14:40
But it's equally foolish
to say that our fates are sealed.
to say that our fates are sealed.
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14:43
That's not decided by the machines.
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14:45
It's not even decided by the market.
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14:47
It's decided by us
and by our institutions.
and by our institutions.
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14:50
Now, I started this talk with a paradox.
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14:52
Our machines increasingly
do our work for us.
do our work for us.
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Why doesn't that make
our labor superfluous,
our labor superfluous,
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14:57
our skills redundant?
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Isn't it obvious that the road
to our economic and social hell
to our economic and social hell
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15:02
is paved with our own great inventions?
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History has repeatedly offered
an answer to that paradox.
an answer to that paradox.
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15:10
The first part of the answer
is that technology magnifies our leverage,
is that technology magnifies our leverage,
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increases the importance, the added value
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15:16
of our expertise,
our judgment and our creativity.
our judgment and our creativity.
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15:20
That's the O-ring.
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15:21
The second part of the answer
is our endless inventiveness
is our endless inventiveness
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15:24
and bottomless desires
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15:26
means that we never get enough,
never get enough.
never get enough.
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15:28
There's always new work to do.
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15:31
Adjusting to the rapid pace
of technological change
of technological change
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15:35
creates real challenges,
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15:36
seen most clearly
in our polarized labor market
in our polarized labor market
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15:39
and the threat that it poses
to economic mobility.
to economic mobility.
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2520
15:43
Rising to this challenge is not automatic.
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15:46
It's not costless.
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15:47
It's not easy.
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15:49
But it is feasible.
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15:51
And here is some encouraging news.
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15:52
Because of our amazing productivity,
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15:55
we're rich.
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Of course we can afford
to invest in ourselves and in our children
to invest in ourselves and in our children
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3136
15:59
as America did a hundred years ago
with the high school movement.
with the high school movement.
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16:02
Arguably, we can't afford not to.
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16:06
Now, you may be thinking,
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16:07
Professor Autor has told us
a heartwarming tale
a heartwarming tale
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16:10
about the distant past,
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16:12
the recent past,
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16:14
maybe the present,
but probably not the future.
but probably not the future.
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16:17
Because everybody knows
that this time is different.
that this time is different.
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16:21
Right? Is this time different?
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2816
16:24
Of course this time is different.
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Every time is different.
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16:27
On numerous occasions
in the last 200 years,
in the last 200 years,
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16:31
scholars and activists
have raised the alarm
have raised the alarm
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16:34
that we are running out of work
and making ourselves obsolete:
and making ourselves obsolete:
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16:37
for example, the Luddites
in the early 1800s;
in the early 1800s;
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16:42
US Secretary of Labor James Davis
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16:45
in the mid-1920s;
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16:47
Nobel Prize-winning economist
Wassily Leontief in 1982;
Wassily Leontief in 1982;
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16:53
and of course, many scholars,
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16:56
pundits, technologists
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2136
16:58
and media figures today.
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17:01
These predictions strike me as arrogant.
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3320
17:05
These self-proclaimed oracles
are in effect saying,
are in effect saying,
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2696
17:08
"If I can't think of what people
will do for work in the future,
will do for work in the future,
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17:11
then you, me and our kids
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2896
17:14
aren't going to think of it either."
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17:17
I don't have the guts
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1935
17:19
to take that bet against human ingenuity.
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3176
17:22
Look, I can't tell you
what people are going to do for work
what people are going to do for work
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17:25
a hundred years from now.
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1896
17:27
But the future doesn't hinge
on my imagination.
on my imagination.
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2601
17:31
If I were a farmer in Iowa
in the year 1900,
in the year 1900,
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3776
17:35
and an economist from the 21st century
teleported down to my field
teleported down to my field
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3537
17:38
and said, "Hey, guess what, farmer Autor,
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2520
17:42
in the next hundred years,
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17:43
agricultural employment is going to fall
from 40 percent of all jobs
from 40 percent of all jobs
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3776
17:47
to two percent
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1055360
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17:48
purely due to rising productivity.
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2000
17:51
What do you think the other
38 percent of workers are going to do?"
38 percent of workers are going to do?"
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3160
17:55
I would not have said, "Oh, we got this.
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17:58
We'll do app development,
radiological medicine,
radiological medicine,
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2856
18:01
yoga instruction, Bitmoji."
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18:04
(Laughter)
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I wouldn't have had a clue.
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1286
18:07
But I hope I would have had
the wisdom to say,
the wisdom to say,
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18:10
"Wow, a 95 percent reduction
in farm employment
in farm employment
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18:14
with no shortage of food.
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18:16
That's an amazing amount of progress.
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18:19
I hope that humanity
finds something remarkable to do
finds something remarkable to do
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18:22
with all of that prosperity."
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And by and large, I would say that it has.
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Thank you very much.
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(Applause)
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5055
ABOUT THE SPEAKER
David Autor - EconomistDavid Autor's work assesses the labor market consequences of technological change and globalization.
Why you should listen
David Autor, one of the leading labor economists in the world and a member of the American Academy of Arts and Sciences, is Ford Professor of Economics and associate department head of the Massachusetts Institute of Technology Department of Economics. He is also Faculty Research Associate of the National Bureau of Economic Research, Research Affiliate of the Abdul Jameel Latin Poverty Action Lab, Co-director of the MIT School Effectiveness and Inequality Initiative, Director of the NBER Disability Research Center and former editor in chief of the Journal of Economic Perspectives. He is an elected officer of the American Economic Association and the Society of Labor Economists and a fellow of the Econometric Society.
Autor's work focuses on earnings inequality, employment and feedback between labor market opportunities, household structure and the social/intellectual development of children. He has published extensively in many major academic journals in economics. His best known research formally models and empirically analyzes how computerization substitutes for and complements human labor; asks how the rapid rise of import competition from China has reshaped U.S. manufacturing, upending the conventional economic wisdom that free trade is a free lunch; explores how the economic pressures of globalization are reshaping U.S. electoral politics; and conducts large-scale randomized experiments that test whether generous financial aid grants improve the odds of college completion and long-run economic security of students from low income families.
Autor has received a number of prestigious prizes, the Alfred P. Sloan Foundation Fellowship, the National Science Foundation Career award, and the Sherwin Rosen Prize for outstanding contributions in the field of Labor Economics, and the John T. Dunlop Outstanding Scholar Award in 2006 given by the Labor and Employment Relations Association, to name just a few. His teaching has earned several awards, including MIT’s James A. and Ruth Levitan Award for excellence in teaching, the Undergraduate Economic Association Teaching Award, and the Technology and Public Policy Program’s Best Professor Award.
David Autor | Speaker | TED.com