Automation and Employment

There has been a lot of media coverage about job automation recently. The interest is sparked by news of rapid technological progress and the unemployment rate which remains stubbornly high nearly 3 years after the end of the recession. Articles in Slate and the New York Times focus on advanced software that is capable of automating tasks performed by highly paid, highly educated workers like screening mammograms for breast cancer or sorting through legal documents. Two books on the subject (Race against the Machine, The Lights in the Tunnel) take a broader view, proposing that technological advances are causing structural unemployment as more and more tasks are automated. One chart from from the authors of Race Against the Machine shows that the ratio of employment to population has decreased by almost 5% since 1995 even as GDP, corporate profits, and corporate investments have all steadily increased (caveat: these changes may be the result of demographic factors and not automation).

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There is also some historical evidence that automation can lead to big problems in the economy. An article by Joseph Stiglitz claims that the Great Depression was a result of farm mechanization that eliminated the need for many farm laborers. The problems were ultimately resolved, according to Stiglitz, when massive government spending on factories for the war effort helped transition the surplus farm workers to factory jobs.

Another lesson from history is more optimistic. Technology and social changes repeatedly caused huge shifts in the way we live and work over the past century, but the economy has nimbly adapted each time (this report from the Bureau of Labor Statistics gives a nice overview of occupational changes in the 20th century). In 1850, 80% of the workers in the U.S. worked on farms. Increasingly powerful and sophisticated farm machines, such as this modern combine, drastically reduced the number of farmers needed to feed the country to the point that only 2% of the modern U.S. population works on a farm. There have also been social changes that had a profound impact on the workforce. From 1960 to the mid 2000’s, the fraction of U.S. population that was employed increased from 20% to 30%, largely because women entered the workforce. Despite these and many other changes, the economy provided enough jobs, on average, to keep the country at full employment throughout the century.

So there is reason to be optimistic that the economy will adapt to upcoming technological changes. That is a good thing, because large changes seem to await us in the next few decades. Here is a table of the ten largest occupations by employment as well as technologies that may automate some of their workload in the future.

 

Occupation

Number Employed (Millions) Automation Technology
Retail Salespeople

4.15

online product reviews and mobile devices (1,2)
Cashiers

3.35

self-checkout kiosks (1,2,3)
Office Clerks

2.79

continued advancement of office automation
Food Preparation and Serving Workers (Fast Food)

2.69

               —
Registered Nurses

2.66

               —
Waiters and Waitresses

2.24

tablet menus (1)
Customer Service Representatives

2.15

speech recognition and automated call centers (1)
Janitors

2.06

robotic floor cleaners (1,2)
Laborers and Material Movers

2.02

mobile robots(1,2,3)
Secretaries

1.84

Virtual Assistants (1,2)

Source Data

As you can see there are technologies on the horizon that could, in principle, reduce the need for many of the largest occupations. But don’t expect any of these jobs to disappear overnight – there are more than 600,000 bank tellers in the United States even though ATMs were introduced in the 1970’s (Here is a commercial for a bank with an ATM from 1980). Other occupations that have been automated by technology have not disappeared as quickly as some people assume, although they are declining. This includes travel agents (70,000 employed), telephone operators (18,000 employed) and file clerks (212,000 employed).

Big changes in how people are employed are on the horizon because automation will reduce or eliminate the need for many occupations that are common today. These changes will not happen immediately, but will probably play out over a decade or more, and, if history is a guide, the economy will adapt to create new jobs to employ the displaced workers.

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One thought on “Automation and Employment

  1. Carol says:

    Brilliant!

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