The future of work: What we must do to cope with impending changes

The Institute for Emerging Issues at N.C. State University is holding the second day of its two-day 2016 Forum on the future of work today. It’s a provocative topic with lots of ramifications for current and future public policy debates. Last fall, economist Patrick McHugh of the N.C. Budget and Tax Center wrote an outstanding “Progressive Voices” essay for N.C. Policy Watch in which he spelled out some of the central issues in this discussion along with some of the steps we need to take. Enjoy this rerun!

RobotsThe future of work in our rapidly changing economy: Don’t fear the robots, so long as we raise wages

By Patrick McHugh

The first time I saw a GPS-equipped bulldozer a decade ago, it was a revelation. The machine could take a set of plans and peel away soil down to exactly the chosen depth, based on satellites tracking the precise location of the bulldozer’s blade in real time.

Today, you probably have GPS in your pocket. GPS made a lot of industries more efficient, but it also has meant that a lot of jobs are no longer necessary. No need to follow earthmoving equipment around with two-person surveying crews, and the GPS-equipped machines allow even seasoned dozer hands to work faster. There’s still an operator in most bulldozers right now, but that may not be the case for much longer.

This is the sort of thing that has many people fretting over whether the next few decades of innovation will make people better or worse off. Some foresee robots dominating a blasted economic landscape, leaving masses of unemployed people struggling for survival. Others tell of a coming technological utopia with humans freed to follow higher pursuits, spending more time with friends and family. The reality will almost certainly fall somewhere in the middle, with the policy choices we make playing a big role in shaping whether the future looks more like purgatory or Eden.

Technology keeps getting smarter. It solves complicated problems that only people could tackle before. Computer programs analyze data, diagnose problems, and write cogent prose (will a rose smell as sweet when named by a computer?). At the same time, nimble robotics are learning to do tricky work in the physical world, like stocking shelves, cooking food, and driving. All of this means that we soon won’t need people to do a lot of the jobs that exist now.

If we make sure this improved productivity translates into rising income for everyone, we will create a bunch of new jobs in new occupations that we still can’t imagine. If enough people have money to buy new goods and services, those new jobs will make up for the work that machines are doing. But if we continue on the path of the past few decades, declining wages will further undermine consumer demand, and there won’t be enough new types of work to replace what is taken over by computers and robots.

History shows that technological progress does not automatically bring better overall pay. Rising wages did accompany rapid innovation and automation from the end of World War II through the mid-1970s. New equipment popping up from office to factory made postwar American workers more productive, and pay went up accordingly. Better pay fueled an explosion in demand for houses, cars, appliances, and gadgets that created more than enough jobs to offset what was being automated.

The story since the 1970’s is not so good. Technology has kept advancing, allowing each worker to deliver more goods and services to the market, but very little of that wealth is actually showing up in Americans’ paychecks.

If we make the policy choices today to create robust wage growth, we probably don’t have to worry about automation leading to mass unemployment. But that will still leave important work to do.

Even if jobs lost to mechanization are replaced, we will still need to prepare people for the jobs of the future. Current education and training systems can’t handle the number of people that will to see their jobs automated out of existence in the coming decades.

Beyond navigating the decline of many occupations, our training systems will have to be retooled for a future in which change is the norm. Most of today’s schools and training programs are still designed for people just starting out, or experiencing a career shift, but the future of work will require life-long learning, continually assimilating new skills to reflect the demands of the market. I have no idea what skills my one-year-old son will need in 2035, because many of the technologies that he will be using haven’t been invented yet. And the skills necessary in 2035 might not cut it in 2050.

The twin challenges of raising incomes across the board and preparing everyone for the jobs of the future will not solve themselves. If we do nothing, incomes will continue to slip, levels of unemployment far above the worst of the Great Recession could become commonplace and most people won’t have the skills for the jobs that do exist. But, this need not be our fate.

The key is to address the challenge with intentional public solutions that promote widespread prosperity rather standing by, passively. With the right policies in place, we can be confident that future technological progress leads to a better standard of living. It’s time to really look at how to build a future of work that works for everyone.

Patrick McHugh is Policy Analyst at the North Carolina Budget and Tax Center.

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The future of work: What we must do to cope with impending changes