In my last post, I explained how the academics behind the job polarisation literature (declining middle class) have given us a framework for understanding the emergence of very clear winners and losers in the modern workplace. Yet most of these scholars have refused to extend their analysis to justify any fear of technology-led mass unemployment.
According to these economists, the disappearing middle class —due to the death of white collar routine cognitive work carried out by office employees and blue collar routine manual work performed by factory employees—will reappear in cognitive non-routine or manual non-routine jobs. In so doing, these academics have generally wasted few opportunities to bash lump-of-labour advocates; that is, those people who believe that there exists a fixed pool of jobs that computers are draining away.
Nonetheless, there are cracks in the facade. For example, back in 2003 Paul Krugman (who has acted as a commentator on the job polarisation literature rather than an originator) was rock solid behind the consensus economic profession position as can be seen here. But by December 2012 we see a significant U-turn in a piece called Rise of the Robots in the New York Times.
However, I would say that the consensus, while shaky, is still in place. Moreover, for a high-voltage polemic against the lump of labour theory, I recommend you read “Are Robots Taking Our Jobs, or Making Them?” by Ben Miller and Robert Atkinson of the Information Technology and Innovation Foundation. Like all good polemics, the essay assembles all the evidence that supports their thesis of ‘don’t worry, be happy’ and omits any evidence that contradicts it.
Nonetheless, it is a good, comprehensive exposition of the consensus position of the economics profession that has dominated thinking for decades. Further, we can actually take their analysis, but subvert it somewhat to fit the facts of what is actually happening in the job market, and from there think about solutions.
Miller and Atkinson sum up their position thus:
Both history and scholarly analysis have clearly and consistently refuted the notion that increased productivity leads in the moderate to long term to higher unemployment. This is because rising productivity increases overall wealth, and in a competitive economy that increased wealth gets reallocated to create additional demand that requires new workers.
This is a bold statement that I would agree used to be true, but may no longer be valid. But before we look at any data, let’s focus on the mechanism that they claim supports their assertion. The next sentence is key: Continue reading