The Future of Work | Meaningful Integration or Jobless Future?

with Daron Acemoglu and William Janeway

Dec 2, 2020 | 12:00 – 13:00 Download .ics

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The central challenge confronting us in the future of work is this: can we create a future where work exists for all who need one with fair rewards, or will we end up on the path of increasing displacement, leaving workers vulnerable, dispensable, and miserable?

The discussion on the future of work is intricately linked to how human societies will adapt to technologies. As torrents of technological changes press on at unprecedented rates, the central challenge confronting national economies is whether we can create a future where work is available for all who need it with good rewards and fair conditions. The alternative path, one of increasing displacement and precarious employment for the majority of society, needs to be avoided at all costs.

In the seventh episode of the Future of Work webinar series organized by the Institute for New Economic Thinking, Daron Acemoglu, professor of economics at MIT, was joined by William Janeway, cofounder of INET, in a discussion on how we can shift the odds towards a future of meaningful integration between humans and technologies.

It is important to bear in mind that technological changes have always created winners and losers throughout history—or in economist talk, had distributional consequences. Invention of novel tools and production processes have meant the obsolescence of some skills and occupations; while new organizations, products and technologies create tasks that in turn absorb the displaced labor. The massive shift of workers into the manufacturing sector from farms after mechanization of agriculture in early twentieth century U.S. is a case in point. Importantly, successful transitions of this type require changes in institutions that counterbalance the labor replacing trends of technologies with “reinstatement” effects that provide gainful employment opportunities for those displaced. The high school movement, rise of scientific management, and enactment of the social security act have all been at the center of past transitions in the United States.

Since the late 1970s, however, things have not been so rosy. Growth of wages and employment have not kept pace with productivity increases in the economy, which itself has experienced a slowdown compared to previous decades. Employment in the manufacturing sector, which has been crucial in creating a middle class in industrial economies, has seen a steady decline, whereas good jobs in the expanding services sector, few and far between, have largely remained inaccessible to the unskilled workers. Daron Acemoglu worries that recent technological developments have in fact been overly focused on automation and replacing human workers wherever profitable. This trend has contributed to anemic productivity growth, shrinking middle class, and stagnant wages observed in recent years.

The path of increased automation certainly isn’t the only one available to us. Particularly given our more recent experience with technology, the need to redirect technological changes towards more inclusion and empowerment has become more urgent. While some see interfering with inventors and entrepreneurs as outside the province of economic inquiry, the ubiquitous “externalities”, or consequences to other parts of the economy, of technology changes make it imperative to scrutinize them from the get-go. In fact, while economists sat back to wait for the free market to work its magic, the small number of large tech giants have already developed business models centered around automation. Tax systems that favor capital over labor and a global economy laser-focused on cost competition have all pressured businesses to replace fallible humans with seemingly perfect machines. Government policies and public leadership are painfully needed now to illuminate that technology doesn’t have a path of its own and that we could redirect it towards creating tasks that augment and empower human beings.

To ensure we harness technology for inclusive prosperity, public policies will have more important roles to play in the future. What do these polices look like and how should they be designed to confer broad benefits to societies? The future episodes of this webinar series will continue to examine these questions.

Speakers

Meet the leaders and scholars whose new thinking guides our work. View all speakers

  • Daron Acemoglu

    Elizabeth and James Killian Professor of Economics, MIT

  • William Janeway

    Affiliated Member of the Economics Faculty, Cambridge University

    Senior Advisor and Managing Director, Warburg Pincus