Robert J. Samuelson
Just what explains today’s continuing high unemployment remains a central economic question of our time. In my last column, I largely exonerated the computer revolution, which — according to some economists — eliminates more jobs than it creates. This (the argument goes) makes it hard to reduce the joblessness that resulted from the Great Recession. To the contrary, I wrote, past technological upheavals have tended to be net job creators through two mechanisms: lower prices, which expand demand for their output, and higher wages and profits, which increase purchasing power across the economy. There’s little evidence that computer technologies depart from this history.
Interestingly, two longer essays appeared on the same subject almost simultaneously with mine. They make fascinating reading for anyone engaged by this vital issue. The first, “Automation Anxiety” by Daniel Akst in the Wilson Quarterly, recounts a similar episode at the start of the 1960s. Akst writes that “unemployment in the Kennedy and early Johnson years remained stubbornly high, reaching 7 percent at one point. Automation, seen loitering in the vicinity of the industrial crime, appeared a likely culprit.” To take one example: Life magazine published a picture in 1963 of a new automated machine tool called Milwaukee-Matic that could replace 18 workers.
It was feared that this was the new norm. Robert Heilbroner, a well-known economist who wrote a widely read book on economic history (“The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers”) warned: “As machines continue to invade society ... it is human labor itself — at least, as we now think of ‘labor’ — that is gradually rendered redundant.”
So concerned was President Johnson that in 1964 he appointed a National Commission on Technology, Automation and Economic Progress. To be fair: Not everyone fretted about technology. Americans still lived in the shadow of World War II, when new technologies were credited with helping win the war. For many, there was a lingering optimism that automation would solve many social problems. Herman Kahn, a prominent futurist, predicted a four-day workweek and 13 weeks of vacation each year.
Both technology optimists and pessimists were proved wrong. By 1969, unemployment had dropped to 3.5 percent and prices were up 6 percent; easy credit and Vietnam War spending produced an inflationary boom. As for the 13 weeks of vacation, it’s still on the drawing board. The lesson seems to be that business cycles dominate the short-term employment picture, for better or worse. Technology has profound effects on jobs, but changes occur over many years.
Indeed, this theme animates the second essay, “Dancing With Robots,” published by Third Way, a liberal think tank, and written by economists Frank Levy of the Massachusetts Institute of Technology and Richard Murnane of Harvard. They take it for granted that computers have eliminated many jobs and will continue to do so. ATMs have reduced the need for tellers (true, bank tellers increased 8 percent from 1990 to 2011, but total U.S. employment was up 18 percent). Computerized airport kiosks have curbed the number of ticket agents. But Levy and Murnane contend that new computer jobs dwarf losses. They count 3.5 million workers directly involved “in creating computer infrastructure” — software developers, systems analysts and data experts.
For Levy and Murnane, the crucial question is whether schools can adapt to the computer revolution. “For the foreseeable future,” they write, “the challenge of ‘cybernation’ is not mass unemployment but the need to educate many more young people for the jobs computers cannot do.”
Computers excel, they argue, at automating tasks that can be distilled to data inputs and rigid rules — say, placing an Amazon order or making bank deposits. As a result, job creation in the future will “center on three kinds of work: solving unstructured problems [example: performing delicate surgery], working with new information [example: analyzing marketing data] and carrying out non-routine manual tasks [example: moving furniture].”
Schools aren’t any worse than in earlier decades, argue Levy and Murnane, but the skills required for the first two types of jobs — the well-paying jobs — have become more complex. Future living standards depend heavily, they say, on whether schools can impart those skills in larger quantities.
Robert Samuelson writes a weekly economics column for The Washington Post.