Key Takeaways
Summary
Our Goldilocks period has reached its end, and the American economy is moving into a new era. It is an era that will be defined by a fundamental shift in the relationship between workers and machines. That shift will ultimately challenge one of our most basic assumptions about technology: that machines are tools that increase the productivity of workers. Instead, machines themselves are turning into workers, and the line between the capability of labor and capital is blurring as never before.
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- While lower-skill occupations will no doubt continue to be affected, a great many college-educated, white-collar workers are going to discover that their jobs, too, are squarely in the sights as software automation and predictive algorithms advance rapidly in capability.
- The fact is that “routine” may not be the best word to describe the jobs most likely to be threatened by technology. A more accurate term might be “predictable.”
- The virtuous feedback loop between productivity, rising wages, and increasing consumer spending will collapse. That positive feedback effect is already seriously diminished: we face soaring inequality not just in income but also in consumption.
- The question I will ask in this book is bigger: Can accelerating technology disrupt our entire system to the point where a fundamental restructuring may be required if prosperity is to continue?
- Manufacturing jobs in the United States currently account for well under 10 percent of total employment. As a result, manufacturing robots and reshoring are likely to have a fairly marginal impact on the overall job market. The story will be very different in developing countries like China, where employment is far more focused in the manufacturing sector.
- In the United States and other advanced economies, the major disruption will be in the service sector—which is, after all, where the vast majority of workers are now employed. This trend is already evident in areas like ATMs and self-service checkout lanes, but the next decade is likely to see an explosion of new forms of service sector automation, potentially putting millions of relatively low-wage jobs at risk.
- Once one of the industry’s major players begins to gain significant advantages from increased automation, the others will have little choice but to follow suit.
- The third major force likely to disrupt employment in the retail sector will be the introduction of increased automation and robotics into stores as brick and mortar retailers strive to remain competitive.
- Seven Deadly - Stagnant Wages, “Bowley’s Law,” Labor Force Participation, Diminishing Job Creation, Lengthening Jobless Recoveries, and Soaring Long-Term Unemployment,
- the problem is not that more jobs are being destroyed in downturns; it is that fewer are being created during recoveries.
- Routine jobs are eliminated for economic reasons during a recession, but organizations then discover that ever-advancing information technology allows them to operate successfully without rehiring the workers once a recovery gets under way.
- The main idea behind comparative advantage is that you should always be able to find a job, provided you specialize in the thing at which you are “least bad” relative to other people.
- Continued progress depends on a vibrant market for future innovations—and that, in turn, requires a reasonable distribution of purchasing power.
- Deep learning systems already power the speech recognition capability in Apple’s Siri and are poised to accelerate progress in a broad range of applications that rely on pattern analysis and recognition.
- In some cases, however, computers are pushing even further and beginning to encroach into areas that nearly everyone assumes are the exclusive province of the human mind: machines are starting to demonstrate curiosity and creativity.
- Blinder has conducted a number of surveys aimed at assessing the future impact of offshoring and has estimated that 30–40 million US jobs—positions employing roughly a quarter of the workforce—are potentially offshorable.
- One factor that is, I think, underappreciated is the extent to which advances in artificial intelligence as well as the big data revolution may act as a kind of catalyst, making a much broader range of high-skill jobs potentially offshorable.
- The jobs of the future will involve collaborating with the machines.
- Advising workers that they should learn to “race with the machines”—rather than against them
- Human-machine collaboration, rather than full automation, will come to dominate the workplaces of the future.
- One of the most important lessons of history is that there is a powerful symbiosis between technological progress and a well-functioning market economy. Healthy markets create the incentives that lead to meaningful innovation and ever-increasing productivity, and this has been the driving force behind our prosperity.
- The biggest disruption of all could come when 3D printers are scaled up to construction size. Behrokh Khoshnevis, an engineering professor at the University of Southern California, is building a massive 3D printer capable of fabricating a house in just twenty-four hours.
- I think that commercial fleets could be one of the first places where we see widespread adoption of automated vehicles.
- The primary message this book has delivered so far is that accelerating technology is likely to increasingly threaten jobs across industries and at a wide range of skill levels.
- In virtually every industry sector that caters directly to American consumers—from home appliances to restaurants and hotels to retail stores—the mid-range is struggling with stagnant or declining sales, while companies that target top-tier consumers continue to thrive.
- Even if China does succeed in rebalancing its economy toward domestic consumption, it seems optimistic to expect that the country’s consumer markets will be fully open to foreign companies.
- It is not at all clear how the poorest countries in Asia and Africa will manage to dramatically improve their prospects in a world that no longer needs untold millions of low-wage factory workers.
- Overall, about 20 percent of US college graduates are considered overeducated for their current occupation, and average incomes for new college graduates have been in decline for more than a decade. The result very often is credential inflation; many occupations that once required only a high school diploma are now open only to those with a four-year college degree, the master’s becomes the new bachelor’s, and degrees from nonelite schools are devalued.
- A basic, or guaranteed minimum, income is far from a new idea. In the context of the contemporary American political landscape, a guaranteed income is likely to be disparaged as “socialism” and a massive expansion of the welfare state.
- The most important factor in designing a workable guaranteed income scheme is getting the incentives right. The objective should be to provide a universal safety net as well as a supplement to low incomes—but without creating a disincentive to work and to be as productive as possible. The income provided should be relatively minimal: enough to get by, but not enough to be especially comfortable. There is also a strong argument for initially setting the income level even lower than this and then gradually increasing it over time after studying the impact of the program on the workforce.
- There are two general approaches to implementing a guaranteed income. An unconditional basic income is paid to every adult citizen regardless of other income sources. Guaranteed minimum incomes (and other variations, such as a negative income tax) are paid only to people at the bottom of the income distribution and are phased out as other income sources rise. While the second alternative is obviously less expensive, it carries with it the danger of disastrous perverse incentives. If the guaranteed income is means-tested at relatively low income levels, recipients will see an effective tax rate on any further earnings that can reach confiscatory levels. In other words, they can fall into a “poverty trap” where there is little or no benefit to working harder.
- In general, I think the fact that some people would elect to work less—or perhaps even not at all—should not be viewed in universally negative terms.
- A basic income program might help revitalize many of the small towns and rural areas that are losing population because jobs have evaporated.
- “47 percent” (the fraction of the population who currently pay no federal income tax).
- Rather than simply raising taxes across the board or on the highest existing tax bracket, a better strategy would be to introduce several new higher tax brackets designed to capture more revenue from those taxpayers with very high incomes—perhaps a million or more dollars per year
- Foremost among these policies is the critical need for the United States to invest in public infrastructure. There is an enormous pent-up requirement to repair and refurbish things like roads, bridges, schools, and airports.
What I got out of it
- Really interesting take on the future of jobs as it relates to automation and advancing technology. It is interesting to compare Colvin's Humans are Underrated to this. I don't think they're that different but Colvin is much more upbeat about it.
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