By the EACCNY – EACC Insights Editorial Note
Machine learning advancements will reorient our labor economy in increasingly significant ways over the next several decades, and companies and governments must prepare its citizens for the many challenges as well as opportunities these advancements will create. Governments, private companies, and institutions at the local, regional, and state wide levels must engage with one another if the EU and US plan to prepare their workforces for these coming shifts. As an economic policy specialist who has worked on these issues throughout cities in the US and Europe, I have seen first-hand how to build consensus throughout the community. I offer my insights on how to re-educate and reskill citizens for the modern labor market. To prepare for the future of work, we must enact smart and innovative policies, and we must start now.
Machine learning will not only replace factory line and agricultural jobs with robotic integrated systems for assembly and distribution of goods using algorithms and artificial intelligence, but has the potential to disrupt, and even replace, mid-level management jobs, executive assistant positions, accountants, bookkeepers, and even pharmacists.
These changes are not all doom and gloom, however. Labor markets have gone through these types of shocks throughout economic history, and through good public policy, the majority of workers were in the past able to reskill and reenter the labor market. Thus technological advancement and its role in labor displacement is not a new phenomenon. In the 1950s and 60s, elevator operators around the country were laid off by the thousands because of automated operating breakthroughs. And before that, inventions like the combine and the cotton gin made mass labor demand in the areas of agriculture obsolete. These reorientations also took policy change and innovative thinking from leadership to find lasting solutions to the challenges of those eras.
Automation and machine learning will allow productivity and profitability to skyrocket in many crucial sectors of the economy, offering workers the ability to forego menial and tedious processing procedures while allowing for more time to focus on innovation, strategic thinking, and team cohesion, among other benefits. But as tasks become automated, it will undoubtedly mean labor cuts and reorientations, often times unforeseen by companies and workers alike.
The future challenge for the US and Europe will be mitigation of external shocks to the labor market. It is clear to any scholar of the economy that massive reorientations are coming, and few sectors will be spared. Although fully functioning robots are decades away, workers are looking into the near future of driverless trucks, AI executive assistances, and fully functioning automated assembly lines. Policy research has found little to no clear cut solutions thus far on exactly how to mitigate for shocks to labor like loss of income, health insurance, and funding for reskilling, let alone a gaping hole in the income tax base for investment in these programs. Public leaders must begin to weigh the pros and cons of automation, not just on the bottom line in the short run, but the intangible tax it will have on society as a whole. Solutions that have been posited have been universal basic incomes, private reskilling taxes for companies who automate, and public rainy day funds that can be utilized by citizens in times of employment transition.
EACCNY members weigh in on this topic as well as several other fascinating ones regarding tech in the workplace.