18 November 2020

Workforce and Robotics

The new MIT The Work of the Future: Building Better Jobs in an Age of Intelligent Machines report by David Autor, David Mindell and Elisabeth Reynolds comments 

Three years ago, robots, artificial intelligence (AI), and self-driving cars seemed to be coming fast. A widely cited study projected nearly half of all jobs in industrialized countries could soon be performed by robots or AI. A New Yorker cover published in late 2017 showed robots striding to work on a sidewalk where a disheveled human panhandler begged for coins. During the 2019 Super Bowl, six TV commercials featured robots or AI-enabled assistants. One beer advertisement showed robots gleefully surpassing humans in running, bicycling, and golfing, but ended with a robot gazing wistfully through a window at people socializing in a bar. Humans would soon be outcompeted in every arena except social drinking, this ad seemed to say. 

In this context, MIT President L. Rafael Reif commissioned the MIT Task Force on the Work of the Future in the spring of 2018. He tasked us with understanding the relationships between emerging technologies and work, to help shape public discourse around realistic expectations of technology, and to explore strategies to enable a future of shared prosperity. The Task Force is co-chaired by this report’s authors: Professors David Autor and David Mindell and executive director Dr. Elisabeth Reynolds. Its members include more than 20 faculty members drawn from 12 departments at MIT, as well as over 20 graduate students. 

In the two-and-a-half years since the Task Force set to work, autonomous vehicles, robotics, and AI have advanced remarkably. But the world has not been turned on its head by automation, nor has the labor market. Despite massive private investment, technology deadlines have been pushed back, part of a normal evolution as breathless promises turn into pilot trials, business plans, and early deployments — the diligent, if prosaic, work of making real technologies work in real settings to meet the demands of hard-nosed customers and managers. 

Yet, if our research did not confirm the dystopian vision of robots ushering workers off of factory floors or artificial intelligence rendering superfluous human expertise and judgment, it did uncover something equally pernicious: Amidst a technological ecosystem delivering rising productivity, and an economy generating plenty of jobs (at least until the COVID-19 crisis), we found a labor market in which the fruits are so unequally distributed, so skewed towards the top, that the majority of workers have tasted only a tiny morsel of a vast harvest. 

Four decades ago, for most U.S. workers, the trajectory of productivity growth diverged from the trajectory of wage growth. This decoupling had baleful economic and social consequences: low-paid, insecure jobs held by non-college workers; low participation rates in the labor force; weak upward mobility across generations; and festering earnings and employment disparities among races that have not substantially improved in decades. While new technologies have contributed to these poor results, these outcomes were not an inevitable consequence of technological change, nor of globalization, nor of market forces. Similar pressures from digitalization and globalization affected most industrialized countries, and yet their labor markets fared better. 

History and economics show no intrinsic conflict among technological change, full employment, and rising earnings. The dynamic interplay among task automation, innovation, and new work creation, while always disruptive, is a primary wellspring of rising productivity. Innovation improves the quantity, quality, and variety of work that a worker can accomplish in a given time. This rising productivity, in turn, enables improving living standards and the flourishing of human endeavors. Indeed, in what should be a virtuous cycle, rising productivity provides society with the resources to invest in those whose livelihoods are disrupted by the changing structure of work. 

Where innovation fails to drive opportunity, however, it generates a palpable fear of the future: the suspicion that technological progress will make the country wealthier while threatening livelihoods of many. This fear exacts a high price: political and regional divisions, distrust of institutions, and mistrust of innovation itself. 

The last four decades of economic history give credence to that fear. The central challenge ahead, indeed the work of the future, is to advance labor market opportunity to meet, complement, and shape technological innovations. This drive will require innovating in our labor market institutions by modernizing the laws, policies, norms, organizations, and enterprises that set the “rules of the game.” 

As this report documents, the labor market impacts of technologies like AI and robotics are taking years to unfold. But we have no time to spare in preparing for them. If those technologies deploy into the labor institutions of today, which were designed for the last century, we will see similar effects to recent decades: downward pressure on wages, skills, and benefits, and an increasingly bifurcated labor market. This report, and the MIT Work of the Future Task Force, suggest a better alternative: building a future for work that harvests the dividends of rapidly advancing automation and ever-more powerful computers to deliver opportunity and economic security for workers. To channel the rising productivity stemming from technological innovations into broadly shared gains, we must foster institutional innovations that complement technological change. 

We are living in a period of significant disruption, but not of the kind envisioned in 2018. The final phases of researching and writing this document occurred during the 2020 months of COVID-19. Our technologies have been instrumental in enabling us to adapt via telepresence, online services, remote schooling, and telemedicine. While they don’t look anything like robots, these remote work tools too are forms of automation, displacing vulnerable workers from low-pay service jobs in industries like food service, cleaning, and hospitality. 

We face a labor market crisis stemming from the COVID-19 pandemic. Millions are unemployed. But technological advances had little to do with this crisis. Long before this disruption, our research on the work of the future made it clear how many in our country are failing to thrive in a labor market that generates plenty of jobs but little economic security. The effects of the pandemic have made it even more viscerally and publicly clear: Despite their official designation as “essential,” most low-paid workers cannot effectively do their jobs through computing platforms. Most must be physically present to earn their livings. Some see robots taking over those roles (though few have yet). Others see the indispensable role of human flexibility as people have been essential to transforming supply chains. Still others see COVID-19 as an automation-forcing event. However it plays out, we will be living with the effects of COVID-19 on technology and work for a long time, though those effects will look different from what anyone had anticipated in 2018. 

Other forces have also roiled the 2018 visions of the future, including the rupture between the world’s two largest economies and a surge of political turmoil and economic populism. These pressures are reshaping alliances, breaking apart and reorganizing global business relationships, and even altering patterns in human migration. The United States and China had friction before, but nothing like the fracture that is now occurring. What began as a trade war has morphed into a technology war. 

This clash is filtering out through the economy and threatens to hinder innovation, which increasingly emerges from countries around the world, often by researchers who are collaborating across borders and time zones. How can we make sure that technological advances, whenever they come, yield prosperity that is widely shared? How can the U.S. and its workers continue to play a leading role in inventing and shaping the technologies and reaping the benefits? 

Following two years of study, data collection, and analysis, the Task Force draws the following conclusions: 

1. Technological change is simultaneously replacing existing work and creating new work. It is not eliminating work altogether. 

No compelling historical or contemporary evidence suggests that technological advances are driving us toward a jobless future. On the contrary, we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them, and that robotics and automation will play an increasingly crucial role in closing these gaps. Nevertheless, the impact of robotics and automation on workers will not be benign. These technologies, in concert with economic incentives, policy choices, and institutional forces, will alter the set of jobs available and the skills they demand. This process is both challenging and indispensable. Inventing new ways of accomplishing existing work, new business models, and entirely new industries drives rising productivity and new jobs. Such innovations bring new occupations to life, generate demands for new forms of expertise, and create opportunities for rewarding work. Most of today’s jobs hadn’t even been invented in 1940. The United States needs not less, but more technological innovation to meet humanity’s most pressing problems, including climate change, disease, poverty, malnutrition, and inadequate education. Meeting these challenges through investment and innovation will create opportunity and improve well-being. 

2. Momentous impacts of technological change are unfolding gradually. 

Spectacular advances in computing and communications, robotics, AI, and manufacturing processes are reshaping industries as diverse as insurance, retail, healthcare, manufacturing, and logistics and transportation. But we observe substantial time lags, often on the scale of decades, from the birth of an invention to its broad commercialization, assimilation into business processes, widespread adoption, and impacts on the workforce. We find examples of this incremental pace of change in the adoption of novel industrial robots in small and medium-sized firms, and in the still-imminent large-scale deployments of autonomous vehicles. Indeed, the most profound labor market effects of new technology that we found were less due to robotics and AI than to the continuing diffusion of decades-old (though much improved) technologies of the internet, mobile and cloud computing, and mobile phones. This time scale of change provides the opportunity to craft policies, develop skills, and foment investments to constructively shape the trajectory of change toward the greatest social and economic benefit. 

3. Rising labor productivity has not translated into broad increases in incomes because labor market institutions and policies have fallen into disrepair. 

Peer nations from Sweden to Germany to Canada have faced the same economic, technological, and global forces as the United States, and have enjoyed equally strong economic growth, but have delivered better results for their workers. What sets the United States apart are U.S.-specific institutional changes and policy choices that failed to blunt, and in some cases magnified, the consequences of these pressures on the U.S. labor market. 

The U.S. has allowed traditional channels of worker voice to atrophy without fostering new institutions or buttressing existing ones. It has permitted the federal minimum wage to recede to near-irrelevance, lowering the floor under the labor market for low-paid workers. It has embraced a policy-driven expansion of free trade with the developing world, Mexico and China in particular, yet failed to direct the gains towards redressing the employment losses and retraining needs of workers. 

No evidence suggests that this strategy has paid off for the United States. U.S. leadership in growth and innovation is longstanding: It led the world throughout the 20th century, and led even more definitively in the several decades immediately after World War II. Conversely, the labor market maladies documented here are recent. Nothing suggests that these failures inevitably follow from innovation or constitute costs worth paying to gain the other economic benefits that they ostensibly deliver. We can do better. 

4. Improving the quality of jobs requires innovation in labor market institutions. 

In the absence of deliberate policy, good jobs are under-supplied by markets and yet have broad social and political benefits, especially in a democracy. Work is a crucial human good. “Not simply a source of income,” Task Force Research Advisory Board member Josh Cohen writes in a MIT Work of the Future research brief, “work is a way that we can learn, exercise our powers of perception, imagination, and judgement, collaborate socially, and make constructive social contributions.” Even when work is solely a means of acquiring an income, it should offer a sense of purpose and not require submission to demeaning or arbitrary authority, unhealthy or unsafe conditions, or physical or mental degradation. The U.S. must innovate to rebalance the desire of employers for low-cost, minimal commitment, and maximal flexibility, with the necessity that workers receive fair treatment, reasonable compensation, and a measure of economic security. The U.S. must craft and enforce fair labor standards, ensure effective collective bargaining, set a well-calibrated federal minimum wage, extend the scope and flexibility of its unemployment insurance system, and modernize its dysfunctional system of employer-based health insurance. 

To channel the rising productivity stemming from technological innovations into broadly shared gains, we must foster institutional innovations that complement technological change. 

5. Fostering opportunity and economic mobility necessitates cultivating and refreshing worker skills. Enabling workers to remain productive in a continuously evolving workplace requires empowering them with excellent skills programs at all stages of life: in primary and secondary schools, in vocational and college programs, and in ongoing adult training programs. The distinctive U.S. system for worker training has many shortcomings, but it also has unique virtues, for example, offering numerous points of entry for workers who may want to reshape their career paths or need to find new work after a layoff. The U.S. must invest in existing educational and training institutions and innovate to create new training modes to make ongoing skills development accessible, engaging, and cost-effective. 

6. Investing in innovation will drive new job creation, speed growth, and meet rising competitive challenges. 

Investments in innovation grow the economic pie, which is crucial to meeting challenges posed by a globalized and fiercely technologically competitive world economy. Throughout our studies, we found technologies that were direct results of U.S. federal investment in research and development over the past century and longer: the internet, advanced semiconductors, artificial intelligence, robotics, and autonomous vehicles, to name but a few. These new goods and services generate new industries and occupations that demand new skills and offer new earnings opportunities. The U.S. has a stellar record of supporting innovations that inventors, entrepreneurs, and creative capital deploy to support and create new businesses. We must foster and grow the U.S. innovation system to ensure that when workers are displaced by technological change, they can move to new jobs in new industries. Simultaneously, we can shape the direction of innovation through public investment and policy to maximize these benefits. 

Adopting new technology creates winners and losers and will continue to do so. Involvement of all stakeholders — including workers, businesses, investors, educational and social organizations, and government — can minimize the damage done to individuals and communities and help ensure that the jobs of the future offer benefits that are shared by all. We explore this inclusive approach by examining the institutional frameworks around work, including how education and training programs can be made more effective and inclusive, as well as new ways of empowering workers who may never have the protections afforded by traditional union structures. 

This report begins by documenting and diagnosing the challenges facing the U.S. labor market. Next, we survey the technological frontier to draw lessons about the pace and direction of change and its likely impacts on employment, skill demands, and opportunity. Finally, we synthesize insights from work and technology to consider how our policies and institutions should innovate to leverage technological and economic opportunities while surmounting the substantial challenges that lie ahead.