Two schools of economists haggle over the ultimate impact of automation on employment.
The Neoclassicals soothe us with human resilience: jobs lost will eventually be balanced by new jobs found. The Neo-Luddites reply that technological advances have changed the rules, and many jobs will be lost forever.
“So, who is right? Nobody knows,” said Moshe Y. Vardi, the Karen Ostrum George Distinguished Service Professor in Computational Engineering at Rice University, who suggests we examine the past and present before drawing grand conclusions about the future.
Vardi’s lecture, “Humans, Machines and Work: The Future is Now,” was sponsored by the Ken Kennedy Institute for Information Technology, of which he is the director, and by the Fondren Library and the Humanities Research Center. An audience of 175 attended his lecture in Duncan Hall, on Oct. 27. The title of his lecture contrasts subtly with the name of the upcoming De Lange Conference to be held at Rice on Dec. 5-6: “Humans, Machines and the Future of Work.” (See http://delange.rice.edu.)
Vardi cited the example of automobiles, “the most important industrial product of the 20th century.” Thirty companies are now developing self-driving vehicles, and Vardi said he expects most of their “technical issues” will be resolved within 10 years. If widely adopted, the number of accidents will be reduced but a “major loss of business” for the insurance, legal and medical industries will result.
In addition, truck driving is the most common job in 29 of the 50 states. Four-million people are employed as truck and taxi drivers, and 15 million jobs in the U.S. involve operating a vehicle. “Automation of the whole supply chain is expected: cargo ships, ports, trucking, warehouses, delivery,” Vardi said. “Bottom line? Massive loss of jobs. But there will be new jobs, right?”
In manufacturing, long the backbone of the U.S. economy, output has steadily risen since the end of World War II, as did employment until the start of the 21st century. Something similar happened with gross domestic product and jobs during the same period. But labor’s share of U.S. national income has steadily declined since the 1970s. A major “driving force” of the trends, Vardi concluded, has been automation: “Over the past 40 years, automation has had a very harsh impact on middle- and working-class Americans. The middle class is shrinking. Economic growth is reduced.”
We have entered an age of economic precariousness, he said, in which nearly half of all Americans would have difficulty finding $400 to pay for an emergency. “Many Americans are living on the financial edge,” he said.
Neither of the major-party candidates in the current U.S. presidential election has addressed the impact of automation on the economy, said Vardi, noting the “eerie correlation” between the parts of the country where Donald Trump is performing best and the where middle-aged whites are dying the fastest.
Vardi cited a 2014 poll among economists who were asked if information technology and automation were the principal reason median wages had been stagnant in the U.S. for the previous decade, despite rising productivity. Forty-three percent said yes, 30 percent were uncertain, 24 percent disagreed and four percent disagreed strongly.
“Technology has been destroying jobs since the start of the Industrial Revolution,” Vardi said, “and new jobs have continually been created, but we have never faced machines that may be able to out-compete us in almost everything.”
Vardi proposed no solutions, arguing that we must first accept that a problem exists before considering possible ways to correct it. He believes work is an essential component of human well-being, and he closed by saying:
“Some people ask me, are you a pessimist or an optimist? I’m a second-generation Holocaust survivor. It means I must be supremely pessimistic because of the sheer loss of my family, which is just astounding. But here I am, so I must also be supremely optimistic. So I am a short-term pessimist and a long-term optimist.”
A member of the National Academy of Engineering and the National Academy of Science, Vardi has since 2008 served as the editor-in-chief of Communications of the ACM, the flagship publication of the Association for Computing Machinery, one of the world’s largest computational professional societies. He is former chair of the Department of Computer Science at Rice. His honors include the 2011 IEEE Computer Society Harry H. Goode Award, the 2008 ACM Presidential Award, the 2008 Blaise Pascal Medal for Computer Science by the European Academy of Sciences and the 2000 Gödel Prize for outstanding papers in the area of theoretical computer science.