Can Technology Make Us Better Off While Also Taking Our Jobs?

Earlier this week Axios published the results from a recent Axios-SurveyMonkey poll. The results reveal an interesting dichotomy. There appears to be wide consensus that technology is making us better off and that this will continue into the future. Consider the following findings:

  • 82% of American adults believe the success of U.S. technology companies has had a positive effect on the overall U.S. economy
  • 71% of U.S. adults believe technology has had a positive effect on our society
  • 74% of U.S. adults believe technology will make life better for themselves and their families when looking out 10 years

At the same time, the majority of respondents (55%) believe technology will take away more jobs than it creates over the next 10 years. While we are seemingly optimistic about technology’s role in our lives, the outlook dims when it comes to jobs. And amazingly this pessimism holds across all age cohorts. While you might expect pessimism to increase with age, the results of the poll suggest otherwise. Millennials appear to be just as pessimistic as older cohorts for example. And while the provided crosstabs don’t indicate statistical significance between age cohorts, the oldest cohort (65+) actually appears to be the least pessimist of the bunch. Only 49 percent of those over 65 believe technology will take away more jobs than it will create in the coming decade.

We’re left with a glaring juxtaposition. How can technology both make us better off and be a net destroyer of jobs? Possible in the short-run perhaps, but difficult to imagine that both of these outcomes could be sustained over the long-run.   

Certainly innovation has destroyed its fair share of jobs. In the early 1900s, over 40 percent of Americans were employed in agriculture. By 2000, that figure had dropped to 2 percent. This phenomenon has played out across a variety of economic sectors. Have you seen an elevator operators recently? How about stagecoach drivers? It’s clear there will be job loss. Innovation has always and forever left an imprint on the labor market. But innovation has yet to be a net-destroyer of jobs over the long-run.

What we have seen, especially in recent decades is a polarization of the workforce.  We’ve experienced growth in non-routine work at both ends of the income distribution, while automation and technological change have hallowed out the middle class. But changing jobs doesn’t translate into huge changes in the rate of employment. So again, innovation has been a net-creator of jobs over the long-run.   

We’ve long had a delicate relationship with technological progress. Consider this New York Times headline from 1928. We seem to be able to easily see how technology improves our lives and we can see the jobs that are being lost to innovation and automation. But we’ve long lacked the creativity to imagine how technological transformation will translate into new jobs. This dichotomy plagues our ability to plan for the future because we have very little sense of what that future will entail. Our movies seem to do a good job of portraying future leisure but not a great job of deciphering future work. We seem to intuitively know that technology is making us better off but have little understanding of the employment implications of technology improving our lives. We see the first-order effects, but can’t seem to decipher the second-order effects.

Here’s just one example of what 10 years can bring us. There’s an estimated 22 million software programmers in the world, with maybe 8-10 million developers focused on mobile apps. The first iPhone was released in 2007, but it wasn’t until July 2008 that Apple opened the App Store. The app store as we know it today, wasn’t even in existence 10 years ago. And without it, few developers were focused on mobile development.            

So how should we think about the future of work?

While we fear losing our jobs to automation, technological transformation has really been more focused on improving our productivity than on replacing us. Improving productivity rates enables businesses to produce more with less workers but also means they can expand production in other areas which in turn requires new workers. The net has always been positive.

As history has shown us, we should presume innovation will beget jobs that don’t yet exist today. To understand the future of work, we should look to where production might expand. Here’s one area to consider. Technology shifts consumption. Overtime technology has increased the share of luxuries in overall consumption. Jobs follow these shifting consumption patterns and will continue to do so into the future. innovation will continue to make us better off and be a net-creator of jobs.

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