August 09, 2019

Saturday Special: Ensuring AI Creates Jobs For All

Dr.Lamba

Dr.Lamba
Chairman/Retired

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Whenever I talk to people about the potential impact of artificial intelligence (AI) and robotics, it’s clear there is a lot of anxiety surrounding these developments. 

And no wonder: these technologies already have a huge impact on the world of work, from AI-powered algorithms that recommend optimal routes to maximize Lyft and Uber drivers’ earnings; to machine learning systems that help optimize lists of customer leads so salespeople can be more effective.

We’re on the verge of tremendous transformations to work. Millions of jobs will be affected and the nature of work itself may change profoundly. We have an obligation to shape this future — the good news is that we can.

It’s easier to see the jobs that will disappear than to imagine the jobs that will be created in the future but are as yet unknown. If, as The Wall Street Journal suggests, we think of AI as a technology that predicts, it’s much easier to map its impact. We must push ourselves to do that and understand the future of work.

Here are six principles to keep in mind as we imagine how the world of work will evolve.

1. Expect massive disruption 

As Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, explains, we’re in the midst of a “Fourth Industrial Revolution”, after steam power (the first), electric power (the second) and digitization (the third). The fourth, which incorporates AI and robotics as well as other technologies, will have an even greater impact.

Of course, most new technologies create new opportunities at the same time as they eliminate old jobs, but there is rarely a perfect correspondence between these two forces. The people whose jobs go away aren’t easily retrained for the new jobs and that can lead to anger and social unrest — and, in the short term, massive inequalities, across both geographies and groups of people.

It’s essential to prepare for change by keeping abreast of new technologies, both in general and in your specific field. Learn as much as you can and keep your skills up to date.

2. AI will replace repetitive tasks more than jobs 

Recent studies, including one from McKinsey and another from the OECD, have poured cold water on earlier estimates that nearly half of the American jobs are at risk of being eliminated by AI. 

Newer studies look at specific, repetitive tasks instead of whole jobs and find that, for most of us, some fraction of the work we do each day could be done better with AI. But for most jobs, computers aren’t going to replace everything we do. 

For the majority of us, AI will take away the most repetitive and boring tasks, enabling us to spend more time on creative problem-solving and on the parts of our jobs that involve complex human interactions and relationships.

To help prepare for this future, investigate AI-powered tools in your own field. Learn how to use them and exploit them to increase your own productivity.

3. Middle-skilled jobs will be hit hardest 

The job market will not, however, be untouched by automation. The OECD estimates that 9% of US jobs are in principle automatable. If that happens, it’s going to have the worst effect on people with mid-level skills. Both mid and low-level jobs will be the easiest to automate, but there’s a stronger business case for replacing mid-level workers with machines because they are more expensive. 

If the people replaced by AI and robots aren’t retrained well, they’ll be forced to apply for low-skilled jobs, leading to an oversupply of workers at that level and depressing those wages even further. 

At the same time, there will be fewer people qualified for high-skilled jobs, increasing wages in that segment. This dynamic, if unchecked, will hollow out the middle of the job market and lead to even greater polarization.

To mitigate the impact, society needs to provide education and job placement opportunities for those most affected by automation.

4. Opportunities will be unequally distributed — at first 

Over time, jobs will return. But they won’t be the same kinds of jobs and they will, in all likelihood, appear in different parts of the country to the jobs that automation has destroyed. 

For instance, researchers Daron Acemoglu and Pascual Restrepo have examined the impact of robots on jobs in the US. What they found is a strong regional impact: for every new robot introduced in a particular metro region, an estimated 6.2 jobs were lost in the same geographic area. But when examining the country as a whole, they found that the impact was about half or equivalent to three workers losing their jobs for each additional robot.

One possible explanation is that the automation of industrial jobs in the Midwest and US south is partially offset by new types of jobs in coastal cities.

But that’s no comfort if you’re living in one of the states with a net decline in jobs. Those who have lost their jobs need retraining and we need an education system that prepares all US children, not just a privileged subset, for the jobs of the future.

We also need to acknowledge the uneven geographic impact of automation and take steps, as businesses and collectively as a society, to increase opportunity in geographic areas that are affected adversely.

5. Technology designers have responsibility 

The ethical mandate is not just in education, but also in the design of technology products themselves. Autonomous technologies are not value-neutral with respect to the jobs they impact. Carnegie Mellon robotics professor Illah Nourbakhsh makes the case in a recent podcast that the makers of robots and AI software need to think ethically. Are they creating technologies whose sole purpose is to replace human workers or are they facilitating human productivity and happiness?

Designers, computer scientists, and CTOs all need to understand the ethical implications of how we create and use robots and AI. This needs to be a topic of discussion among business leaders on national and global stages. Merely calling for a universal basic income is sidestepping the question: technology makers need to account for human dignity and work in their very products.

6. The long-term trend can be positive — if we make it so 

Eventually, after the Industrial Revolution, there were at least as many jobs as there were before and they were better ones. The net result was an increase in productivity and in the number of people employed, which raised overall wealth. But that wasn’t a foregone conclusion.

In the 21st century, we’re facing a massive change in the technologies and types of jobs available, similar to that faced by our grandparents in the early 20th century. Like them, we can’t be certain that both productivity and employment will rise.

We, as a society, need to make the commitment to guide our technologies responsibly and to capitalize on the prosperity we are creating, just as those who came before us did. That way we will ensure that AI technology creates an opportunity for all, not just for a lucky few.

This time may be different

The word automation is credited to an engineer from Ford Motor Co. in the 1940s, but workers have been worried about machines since they first appeared on farms 200 years ago.

The famous early example is that of England's 19th-century Luddites, workers who resorted to destroying the textile and farming machines that were leaving many them either out of work or working in putrid, unhealthy conditions during the Industrial Revolution.

More recently, in the US, President John F. Kennedy described the rise of machines in the workplace as "the major domestic challenge of the '60s." He framed it in an exchange with a reporter in February 1962 that sounds like a conversation that might take place in 2017:

"QUESTION: Mr. President, our Labor Department estimates that approximately 1.8 million persons holding jobs are replaced every year by machines. How urgently do you view this problem, automation?

"THE PRESIDENT: Well, it is a fact that we have to find, over a 10-year period, 25,000 new jobs every week to take care of those who are displaced by machines, and those who are coming into the labor market, so that this places a major burden upon our economy and on our society. It is one to which we will have to give a good deal of attention in the next decade. I regard it as a very serious problem.

"If our economy is moving forward, we can absorb this 1.8 million, even though in particular industries we might get special structural unemployment. We have seen that in steel, we have seen it in coal, we may see it in other industries. But if our economy is progressing as we hope it will, then we can absorb a good many of these men and women. But I regard it as the major domestic challenge, really, of the '60s, to maintain full employment at a time when automation, of course, is replacing men."

The English government's response to the Luddites was to hang them until the violence stopped. Kennedy's solution was obviously less draconian, but it also sounds out of place today.

"Much can be done through collective bargaining," Kennedy said in a 1960 speech when he was still a senator, "through the willingness of labor and management to cooperate to solve a problem whose solution is vital to the future of industry and workers alike."

There's still time

Both examples are illustrative of the idea that disruption from technology isn't a 21st-century notion. And they're a reminder that job creation has continued even as technology has advanced. That's broadly true even in the decades since the advent of the internet, though there are some notable pockets of exception, Goldman Sachs economists say.

"The technological advances of recent decades do not appear to have resulted in faster productivity growth or more intense disruption across occupations and industries, much less mass unemployment," they wrote in a recent note to clients. "But changes related to technology and trade have produced important shifts in the structure of the economy, which have hit some groups of workers much harder than others."

Goldman's research found that digitization had hit two industries particularly hard: publishing and department stores. They have shed 500,000 jobs and 300,000 jobs, respectively, over 16 years. Similarly, Goldman's economists predict that self-driving cars will displace about 300,000 truck, bus, and taxi drivers — but not for about 25 years.

is time for the government to respond. To know how Washington can look overseas or at local programs in the US.

In the European Union, apprenticeship programs are more common and are seen as effective ways of integrating the education system into the job market. This can include guaranteeing workers employment as they enter the workforce or transition to new fields.

One model is Germany, which leans on a so-called dual training system that includes schooling alongside work apprenticeships in firms where students are encouraged if not expected to find jobs. These seamless connections make training more targeted and boost prospective employment chances.

The cost, meanwhile, is borne by both government and business. In 2012, for example, total government spending accounted for about 57% (split between federal, state and local entities). Businesses picked up the rest.

Pockets of success

There are also pockets of success within the US that can serve as guides to revamping America's pathways from school to work and back again.

One is sector-based partnerships, in which employers from a particular industry work with representatives from local and regional economic development offices, educational institutions, and nonprofits to meet the needs of job seekers, the industry, and the regional economy.

"The focus of such partnerships is to more effectively align education and job training with employers' skill needs," said Lisa Nelson, an adviser in the Federal Reserve Bank of Cleveland's community-development department who has studied the matter closely.

"Employers play a key role in such partnerships, and their input is essential to developing and designing training programs that are effectively meeting the demands of their industry," she wrote in an email.

One case study focused on coal miners in eastern Kentucky whose jobs were vanishing at an alarming rate. From 2011 to 2014, one out of every two coal miners was laid off. A program funded by the Labor Department made strides in training coal miners to work as electrical linemen, the study said, while others learned computer coding.

That's not to say these programs are a silver bullet. They don't speak to broader social inequities — including early access to (and therefore familiarity with) technology among lower-income Americans.

"Addressing the 'soft skill' issues was mentioned by nearly all of the partnerships we spoke with. Technical skills are crucial but workplace etiquette issues were mentioned consistently by the employers we interviewed," Nelson said. "Sector partnerships often involve nonprofits who can assist with some of the soft skill issues, such as working with job seekers on interviewing skills and the importance of punctuality."

Indeed, developing students' abilities to harness new technologies is only a limited, supply-side solution to US labor-market problems. As long as the economy remains lukewarm and job growth gradual, employers will tend to have the upper hand, keeping wages at bay and even dampening investment in human capital — including in-house training for new employees.

"We want better-educated people, but that's not the thing holding back the labor market right now," says Dean Baker, the co-director of the Center for Economic and Policy Research in Washington.

Learning curves

The word "retraining" is itself misleading — education is and should be a lifelong process, and it tends to be so for people with higher incomes and better access to quality education. Indeed, lifelong learning is increasingly a necessity rather than a luxury, says Steven Partridge, the vice president for workforce development at Nova, the community college the tech-savvy Sorto is attending.

He says automation per se is not a major threat to employment in the Washington, DC, area, unlike his previous home of Charlotte, North Carolina, where a heavy manufacturing presence was much more deeply affected. Still, many of his students, who are focused on cybersecurity and information technology as a way to guarantee solid, good-paying employment, have to constantly update their skills and certifications to remain current.

"Two-thirds of all the cybersecurity jobs in the country are in the DC area, so it's a unique situation," Partridge said in an interview. But a growing industrial base does not mean any less instability, insecurity, and change.

Partridge says Nova itself has to keep up with new types of industry certifications that begin to pop up on IT job boards so they can offer the proper course work that can deliver those credentials.

"We have a full-time data analyst that mines job market information" for those shifts, he said.

Sorto will graduate with five such certifications, in addition to his applied associate degree.

His story points to a world that's just moving a lot faster: Here's a 25-year-old who has had about eight jobs and internships and has already made a career change.

Maybe the word "training" isn't apt at all. Call it what it is: work.

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