Rising Inequality May Be the Real Risk of Automation – Bloomberg

Technological change has had more impact on earnings distribution than on demand for workers, study finds

June 27, 2017, 4:32 AM EDT

If your main worry over automation is losing your job, history suggests youll probably be just fine.

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After all, evena centuryof unprecedented technological advancement in transportation, production and communication hasnt caused labors share of national income to significantly budge.Economists David Autor and Anna Salomons reckon thats because the primary driver of employment has actually been population growth, despite all the emphasis placed in academic circles on howmachines augment human labor as well as why they will ultimately replace us anyway.

The bigger concern, they say, is how technological advances will affect earnings distribution.

Essentially, the argument that the duo puts forth is that as long as there have been humans, there have been jobs a topic Autor, who works at the MIT Department of Economics, previously exploredin a Ted Talk. Theysuggest that labor supply and final demand for goods and services are what actually determine the level of employment, as consuming workers have more and more needs.

Source: David Autor, Anna Salomons

Autors research together with Salomons, who works at Utrecht University in the Netherlands, will be presented Tuesday to central bankers from around the world atthe European Central Banks forum in Sintra, Portugal.

What has changed as a consequence of greater productivity throughtechnological advances is how jobs are remunerated.

Although the raw count of jobs availablein industrialized countries is roughly keeping pace with population growth, the economists write, many of the new jobs generated by an increasingly automated economy do not offer a stable, sustainable standard of living.

Simultaneously, many highly-paid occupations that are strongly complemented by advancing automation are out of reach to workers without a college education.

So if the problem isnt falling aggregate labor demand, but rather an increasingly skewed distribution of employment and ultimately earnings humans may need to re-direct the focus of what technology will mean for the future of work.

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Rising Inequality May Be the Real Risk of Automation - Bloomberg