Technology, Unemployment & Policy Options:
Navigating the Transition to a Better World
Gary E. Marchant, Yvonne A. Stevens and
James M. Hennessy
Center for Law, Science & Innovation
Sandra Day O’Connor College of Law
Journal of Evolution and
Technology - Vol. 24
Issue 1 – February 2014 - pgs 26-44
There is growing concern that emerging
technologies such as computers, robotics and artificial intelligence are
displacing human jobs, creating an epidemic of “technological
unemployment.” While this projection has
yet to be confirmed, if true it will have major economic and social
repercussions for our future. It is
therefore appropriate to begin identifying policy options to address this
potential problem. This article offers
an economic and social framework for addressing this problem, and then provides
an inventory of possible policy options organized into the following six
(a) slowing innovation and change; (b) sharing work; (c) making new work; (d)
redistribution; (e) education; and (f) fostering a new social contract.
The Luddite fear and prediction that
technology will displace many workers and lead to widespread unemployment may,
after many false alarms,finally be coming true.
At the same time, the utopian vision of humans being liberated from a
life filled mostly with the drudgery of manual or mindless labor to enjoy a productive,happier
and more meaningful level of existence through art, music, literature, and rich
social relationships, such as that suggested by behavioral psychologist B.F.
Skinner (1948) in Walden Two,may also be closer to realization.
Navigating the tension between these
negative and positive perspectives on the growing displacement of human labor
by technology requires a calculated and delicate effort to manage this critical
period of transformation. If handled
poorly, the widespread displacement of workers by technology could result in
rapidly expanding economic divergence between rich and poor, economic poverty
and social unrest for growing numbers of dislocated workers, backlashes against
technology and social institutions, and economic and social decline. If properly managed, the use of technology to
replace mundane, lackluster, repetitive, dangerous or strenuous labor, could
free us to live more enjoyable, meaningful and leisurely lives.
Over the years, technologyhas consistently been
anet enhancer of employment. Past
innovations in industries such as the automobile, agricultural, chemical,
energy, computer, and telecommunications sectors have sparked rapid growth in
quality, gainful jobs. In fact, a
1968 paper that perhaps recognized for
the first time the impact of the computer for communications by two leading computer scientists predicted
that as a result of the growing role of computers, “[u]nemployment would
disappear from the face of the earth forever” (Licklider and Taylor 1968,
40). While the computer has indeed had
an enormous impact on communications, those early experts were overly
optimistic about the long-term impact on employment. But there is no doubt that the general effect
of technology on employment over the years has been positive. As the National
Academy of Sciences (NAS) concluded in a 1998 report,“[h]istorically,
technological change and productivity growth have been associated with
expanding rather than contracting total employment and rising earnings” (National
Academy of Sciences 1998, 5).
The same report had a positive prediction
for the future of technology and employment:
The future will see little change in this
pattern…. Rather than producing mass unemployment, technological change will
make its maximum contribution to higher living standards, wages, and employment
levels if appropriate public and private policies are adopted to support
the adjustment to new technologies.(National Academy of Sciences1998, 3-5) (emphasis
The “if” here is an important caveat and
the objective of this paper is to address “the appropriate public and private
policies” that should be pursued to guide the transition into an era where
machines do more and more of the jobs that humans have traditionally
Policy intervention appears necessary. While the evidence is only suggestive and not
conclusive to date, the argument has been made that in this “jobless recovery,”
machines are now resulting in net job loss, perhaps at an accelerating rate
(Rotman 2013; Deane 2013).Brynjolfsson and McAfee (2011) call this the “great
uncoupling” where economic growth has become detached from employment growth
for the first time in the modern era.Other experts vociferously disagree with
this prognosis, contending it is just the latest of a long history of false
alarms about the impact of technology on jobs going all the way back to Ned
Ludd and his Luddite followers in the 19th century (Miller and
Atkinson 2013; Bessen 2013). Just as the major loss of agricultural jobs lead
to increases in manufacturing jobs, and the loss of manufacturing jobs led to
increased jobs in digital industries, technological optimists point to new industries
and jobs that are already developing even as machines replace many existing
jobs – examples include app development and additive manufacturing (Wadhwa
While it may be too soon to definitely
conclude whether technology replaces jobs, we can see anecdotal evidence all
around us in our daily lives, as human beings are replaced by automated
technology to perform the functions once done by gas station attendants, bank
tellers, travel agents, tax preparers, farmers, secretaries,call service
centers, and grocery store cashiers.
Artificial intelligence is empowering robots and computers to replace
more complex job functions such as assembly line worker, surgeon, barista, and
legal practitioner (Markoff 2012). In
the legal field, for instance, in order to predict the likely outcome of a
case, computer scientists and engineers are developing software programs that
have the ability to execute some of the work done by attorneys, thereby
establishing a niche called “quantitative legal prediction” (Lu 2012).
The appeal to employers of replacing workers
with machines is considerable given that machines require no wages or benefits,
take no sick days or vacations, provide a consistent, highly reliable quality
of work for up to twenty-four hours a day, seven days a week if needed, and incur
no injuries. They also require no workers’
compensation, do not complain or disclose proprietary information, and do not
quit, retire, strike or take coffee breaks.
It is said that,
…[a] robot can be operated 160 hours a week.
Even assuming competition from nimble-fingered humans putting in 12-hour
shifts, a single robot might replace two workers, and possibly as many as four
This most recent quote is supported by
Andrew McAfee, when he emphasizes the, “massive increases in productivity
brought on by digital technology” (Regalado 2012).
Rapid advances expected in robotics and
artificial intelligence will be the primary drivers of technology-driven
unemployment. However, other
technologies will also contribute. For
example, 3D printers, nano manufacturing, and autonomous vehicles will all
displace thousands, if not millions, of workers.
Erik Brynjolfsson and Andrew McAfee argue
in their provocative book Race Against
the Machine that,
Computers are now doing many things that
used to be the domain of people only. The pace and scale of this encroachment
into human skills is relatively recent and has profound economic implications.
Perhaps the most important of these is that while digital progress grows the
overall economic pie, it can do so while leaving some people, or even a lot of
them, worse off (Brynjolfsson and McAfee2011, 9).
A recent study from the James Martin 21st
Century School at Oxford University estimated that approximately 47 percent of
U.S. employment was at high risk of being replaced by computerization over the
next couple decades (Frey and Osborne 2013).This concern is not new. Back in in 1930, economist John Maynard
Keynes (1930) predicted this problem in his essay entitled Economic Possibilities for our Grandchildren where he posited that
a new malady called “technological unemployment” is on the horizon toreplace
and outrun human labor with more efficient, fast-paced innovations. Like Skinner, Keynes maintained that an age
of leisure would be part of our future - a future he foresaw as being replete
with social and other repercussions.
If these projections of increasing job loss
to technology are accurate, and the predictions of widespread technological
unemployment are finally coming true,the consequences could be dire. Accordingly, the time is overdue to seriously
consider what potential policy interventions are available to address this
emerging problem. Our objective in this
article is to inventory and briefly evaluate the policy options that might be
considered in an attempt to mitigate orhelp society adapt to the growing
dislocation of jobs by technology. We
start with a more theoretical framing of the problem in Part II, and then
describe potential policies in Part III, grouped into six categories of
potential policy options.
Framing the Problem and the Response
If we assume for the purpose of this
analysis that technology is indeed in the process of widespread displacement or
elimination of human jobs, there are two aspects of the consequent problem – an
economic and a social dimension (from both an individual and collective
perspective) (Deane 2013).
First, from the economic side, growing
prevalence and permanence of unemployment and underemployment presents the
challenge of howaffected individualswill support their existence and that of
their families. As Martin Ford in The Lights in the Tunnel has warned,
Jobs are the primary mechanism through which
income – and hence purchasing power – is distributed to the people who consume
everything the economy produces. If at
some point, machines are likely to permanently take over a great deal of the
work now performed by human beings, then that will be a threat to the very
foundation of our economic system (Ford 2009, 5).
The economic problems from unemployment do
not just affect those who are unemployed and their families. If a significant (and growing) proportion of
the working-age population is unable to find adequate work to sustain
themselves with a reasonable lifestyle, this problem would not only represent
an individual tragedy for those persons, but would also represent a major
burden on the overall economy if the unemployed cannot actively participate as
consumers of products and purchasers of services. This second-order effect limiting economic
activity will have a spiraling negative effect on the economy, leading to
additional loss of jobs and generating further impedimentsto economic growth.
Over and above what machines are currently
and ultimately able to provide, there is much productive and useful work that
can be done by human workers – restoring infrastructure and inner cities,
cleaning up the environment, taking better care of the sick and elderly, orhelping
people in developing countries, among many other priorities. The problem is finding an economic structure
to compensate for, or acknowledge, such work.
Our current political-economic system seems unwilling or unable to
reward or remunerate people to undertake these worthy functions.
Second, for most people, a job ensures not
only a livelihood, but is also linked to identity, self-worth and focus (Deane
2013). Even if we could find ways for
people to pay for the basic necessities of life, if jobs and careers disappear,
it may cause or contribute to major psychological and social stresses due to
stigmatization or an inability to cope with the reality of long-term
unemployment, including depression, anxiety, poor self-esteem, divorce, substance
abuse, increased chronic diseases, suicide and mortality (Baker and Hassett
2012; American Psychological Association 2013).For the purpose of this essay,
we posit that people must do some kind of work.
Being productive is essential to human well-being (Vardi 2012). This is reiterated by Leon Kass in The Other War on Poverty where he states
Unemployment, even if compensated is demoralizing,
degrading and dehumanizing...We need to consider work, as Dorothy Sayers put
it, as ‘not, primarily, a thing one does to live, but the thing one lives to
do’ (Kass2012, 6).
Widespread unemployment may also cause collective disruptions. The strains presented by the “Occupy Wall
Street” movement in 2011 and the “99 vs. 1 percent” protest theme are but a
minor and relatively mild early indicator of the type of social disruptions
that are likely to occur if successful people continue to thrive and prosper,
while a growing percentage of the population is left behind in permanent
poverty and despair.
An important aspect of the technology
unemployment problem is determining whose jobs will be eliminated by
technology.A recurring theme among researchers, economists, political and
social scientistssuch as Charles Murray, Tyler Cowen, Erik Brynjolfsson, Andrew
McAfee, David Autor and Lawrence Katz(see Rotman 2013) is that the
middle-skilled class,based on nowadays’ requirements,has all but disappeared and
what is leftis a polarization between the highly-skilled (wealthy) and the
low-skilled (poor). This “hollowing out”
of the economy by removing middle-class jobs and pushing workers into either
low-paying manual labor that cannot be done by machines (e.g., restaurant and
construction workers) or higher-end jobs
involving higher skills and pay would tend to polarize the population into two
disparate classes (Autor and Dorn 2013).
However, more recent analyses suggest thatthe impact of technological
unemployment might concentrate primarily on low income workers (Frey and
Osborne 2013). Under either economic
model, there will be a new urgency to improve the education and training of
workers to be able to perform skilled, high paying jobs, which at least at this
time are sometimes going unfilled.
When considering the near future and its
economic and social repercussions, we must also consider the generationsaffected
by the inevitable displacement. If mostly
elderly workers are affected, the economic dimension may be the most
important. Individuals who have worked
for many years have already established their social status and have mostly
performed their duty to society to be productive. For those who wish to continue to work,
re-education and re-training will be critical.
For others, who may be unable or uninterested in continuing to work, the
focus will be on how they can retire with dignity and a good quality of
life. This primarily depends on the
establishment of economic safeguards, derived from personal savings or from
other sources of external support. If,
on the other hand, technology’s destruction of jobs primarily affects young
people, the problem may now be both acutely economic and social. The lack of
any employment opportunity for young people, who are likely to have recently
completed the most updated educational training, is likely to cause tremendous
disenchantment and frustration, which could lead to social disruption.
It is worthwhile noting that gender may
also play a role with regard topredictions relating to unemployment or
displacement. In a paper prepared for
the National Science Foundation, David H. Autor and Lawrence F. Katz boldly
state that technological advances breed “winners and losers.” The authors explain that, “in the long run,
technological progress affects the composition
of jobs not the number of jobs” (Autor
and Katz 2010, 1). According to Autor
and Katz, women in most industrialized countries have greatly exceeded men in
the attainment of higher education and are, thus, better positioned to obtain
higher paying occupations.
Not surprisingly, the recurring theme
derived from various lines of research is that the impacts of technological
unemployment will not be spread evenly.
While machines will eliminate many jobs, resulting in unemployment or
displacement, most of the people who will fall victim to this phenomenon will
be the less educated, whose current job functions are more susceptible to
replacement by machines. Perhaps, the
issue initially ishow tounequally but not unfairly sustain the lower and middle
skilled class while incentivizing them tovoluntarily become more educated or
contribute to society in other compensable and meaningful ways.
As the capabilities of artificial
intelligence, robotics, and other technologies continue to advance, more and
more job functions will become automated, leaving fewer and fewer jobs where
humans are essential, and thus raising broader, longer-term questions about
what type of future society and lives we want.
The efficiency and wealth created by technologies, even as they may
reduce employment, create a window of opportunity to enact policies that can
use that wealth to help all citizens achieve enough material support to enjoy a
good life with greater leisure and satisfaction (Newman 2010). Policy interventions must address both
shorter- and longer-term goals, and ensure that short-term actions are aligned
with longer-term objectives.
Potential Policy Responses
Policymakers in the U.S. and other industrialized
nations have struggled for many decades to develop effective policies to
address cyclical unemployment, generally by trying to stimulate innovation and
economic activity, and hence boost job retention and creation. Today’s situation is different – increased
innovation and economic activity may not lead to more jobs.It in fact could
acceleratereplacement of human jobs by machines. New and different policy interventions are
therefore needed to address this new era of technological unemployment (Perry
2013). Below we identify six potential
categories of policy interventions, and begin the task of populating those
categories with specific proposals. The
six categories are: (a) slowing innovation and change; (b) sharing work; (c)
making new work; (d) redistribution; (e) education; and (f) fostering a new
Not all six categories of interventions are
likely to be equally desirable and effective, and we do not shy away from
offering our own preferences and recommendations. We recognize though that views on the merits of
different options may vary, and thus try to identify as many policy options
within each category as possible, whether we personally think they are good,
bad or indifferent. There may also be
differences in effectiveness, appeal and feasibility between policy options
within a given category, varying along dimensions such as the relative roles
they give to governments versus individuals, or whether they are static or
None of the categories of policy approaches
are mutually exclusive, as optimal public policy is likely to involve mixtures
of policies drawn from several or perhaps most or even all of the
categories. The optimal mix of
categories is also likely to shift over time, with some types of policies more
effective and feasible in the short term, while others more salient and
necessary in the longer term. Experimentation
with different mixes of these policy options will also be valuable to better
evaluate the individual options and their interactions.
These policy options seek to use legal
interventions to protect jobs that might otherwise be lost due to technology
innovation and development.
A.1. Place Limits on Technological Development:If technology is the problem that is displacing many jobs, then one
solution might be to try to slow or block new technological developments. This was the Luddite strategy, and was most
recently resurrected by Bill Joy’s famous essay in 2000 on a “policy of
relinquishment” for technologies such as genomics, nanotechnology and robotics (Joy2000). Such policies, often encapsulated by stronger
versions of the “precautionary principle,” are doomed to fail for several
reasons. First, restrictions on
technology innovation would make a nation anticompetitive in the increasing
global marketplace, as other countries would step in to displace the laggards
and achieve technological, economic, and military predominance. Second, emerging technologies are being
developed and commercialized so rapidly in large part because of demand for and
benefits of those technologies.Therefore, foregoing such technologies would
likely be counter-productive to overall social welfare. Finally, “stopping progress” has never been a
successful or politically feasible strategy, and runs counter tohuman nature
A.2. Mandating Human Workers: Throughout history, legislators, regulators, and trade unionists
have attempted to protect jobs by prohibiting displacement of human jobs with
technology. Perhaps the iconic example of trying to preserve jobs by legal
mandates is New Jersey’s (and Oregon’s) current law prohibiting consumers from
pumping their own gasoline, thus protecting the employment of gas station
attendants to pump gasoline. This anachronistic policy simply increases costs,
deprives consumers of convenience, and artificially prolongs jobs that are
low-payingand of declining relevance (Yglesias 2013).
Trade unions have responded to automation
with things like work preservation clauses or Bills of Rights which are
intended to protect employees’ jobs when technology is integrated into the work
environment. This approach has the same
objective as New Jersey’s gas pumping law in that specific duties that could be
performed by a machine are required to be executed by a human being (Moon
2004). Although such clauses may have temporarily preserved some jobs, they
also promoted inefficiency and stalled innovation, to the long-term detriment
of both the companies and workers in those sectors. Japan is a good demonstration of this, where
companies facing changing markets and technologies are competitively harmed by
outdated laws preventing them from laying off workers, assigning such workers
to “chasing-out rooms” where the company tries to force the employee to
voluntarily quit by creating boring job conditions (Tabuchi 2013). These types of antiquated policies simply
delay the inevitable by mandating inefficiency(Dau-Schmidt 2001).
A.3. Regulatory Restraint: Regulation has become a
controversial political subject in the United States with respect to its impact
on employment, with conservatives making regulatory retrenchment a key part of
their jobs strategy, while liberals argue that regulation does not harm and may
even benefit employment. For example,
Arizona, a state with a conservative
government, has enacted by Executive Order a moratorium on new regulations
(with certain enumerated exceptions) in order to “promote job creation and
retention in the state” (Brewer 2013). The
empirical record on this issue is equivocal and disputed, with most (but not
all) studies finding that any net impact of regulations on employment to be relatively
minor (Lee 2013). Not all regulations
may have the same effect, and therefore reducing regulations that have less
important benefits or that particularly burden small businesses may have a
beneficial impact on employment.
A.4. Employment Impact Statement for
Regulations and Legislation: While wholesale
reductions in government regulation may not be effective or politically
feasible for increasing employment, selective study of the impact of
regulations may help minimize regulatory burdens on job-creating businesses and
activities. Impact statements have
become a useful tool for anticipatory governance, and are frequently mandated
for governmental actions that may affect the environment, privacy, or other
important social priorities. This
approach could also be extended to employment impacts. While differing in scope and manner of
execution, several state legislatures currently require employment (or
economic) impact statements with regard to proposed bills(Rappa 2011). Employment impact statements consider factors
such as the nature of the impact, affected numbers and categories, adverse impact
regions and mitigation. Additional
considerations may apply based on the rules, regulations and laws of each state
(NYS Department of State 2013). The
objective of the analysis is to determine whether a proposed action will have
an adverse impact on jobs and job opportunities, and to consider the relative
employment impacts of policy alternatives.
Such a requirement could be expanded to include federal legislation and
federal and state regulations. Although impact statements are criticized as
being just “paper exercises” where the evaluating body simply goes through the
motions to comply with the procedural requirement without affecting the
pre-determined choice to proceed with the chosen policy, they do have the
beneficial effect of forcing legislatures and agencies to incorporate in-house
expertise on employment impacts, which can have subtle beneficial
influences. Impact assessments also
inform the public and media of such impacts, which can have an indirect
influence on policymaking, all of which helps to elevate the priority given to
considering and ameliorating to the extent feasible, adverse employment
These policy options seek to minimize the
frequency of unemployment by sharing the paid work that is available across
more workers.Although these policies are mostly short-term, they may help delay
or lessen the impact of technological unemployment.
B.1. Mandatory Retirement Age: One straightforward way to share the diminishing supply of work
among more people is to impose a mandatory retirement age. Some employers (e.g., airlines) already
impose such a limit, but it could be applied more broadly across the
economy. The main advantage of such a
policy is that it would free up more jobs to the benefit of young people, who
are increasingly being blocked out of the workforce by the lack of open
jobs. However, such a policy would have
significant detrimental impacts on individuals and society. As people live longer, many want to continue
working past the typical retirement age for both economic and psychological
reasons. Also, it does not appear to be
in society’s best interest to compel the retirement of skilled and experienced
workers who have many healthy, productive years of potential work remaining.
B.2. Shorter Work Week:A shorter work week could help spread work among more workers and
possibly lead to a better quality of life for workers who would have more time
for leisure, retraining, and other activities.
Some Silicon Valley employers are now using a reduced work week as a perk
of employment to attract the best and brightest young talent (Tracy 2013). According to one European expert,
[a] 25-hour work week will allow younger
people to spend more time with their children, take better care of their health
(which will help raise average life expectancy), and improve their over-all
quality of life, while for the older population--many of whom have more time on
their hands than they know what to do with--work can serve as both a
psychological and physical outlet (Ebdrup 2013, quoting James W. Vaupel).
This proposal for reduced hours could take a
couple of forms. Many states take part,and
have established programs,in what is commonly referred to as shared work, work
sharing or short-time compensation. In
an effort not to cut jobs, some companies (often taking part in state-run
programs) have reduced employees’ hours and have assisted them with obtaining
prorated benefits for lost time. This
differs from the traditional view of job-sharing in that it does not increase
employed numbers but it helps keep people employed when companies have to trim
labor costs. Other positive aspects of
such a strategy include:(a) when businesses recover, they may once again
increase employees’ hours without having to retrain them – a costly and time-consuming
enterprise; (b) it helps avoid long-term unemployment which often has a negative
effect on re-employment; (c) it provides security for older workers who may not
be as likely to find work if laid off instead of having their hours reduced;
and (d) the employee may appreciate the employer’s efforts to avoid layoffs and
reward the employer with greater loyalty, commitment and performance. In addition to the above,the traditional
work-share model where two or more employees share the same job by limiting the
hours each employee may work is another form of work sharing. This may allow an employer to cut back on
certain benefits, and results in more workers being employed. It may have some negative repercussions,
however, if it is perceived by employees as an attempt to reduce benefit
payments rather than to minimize unemployment.
There are also inefficiencies and extra burdens in having more employees
do the same amount of overall work, including the extra training, monitoring and
evaluation costs and the loss of consistency and continuity of work between two
workers sharing the same job function.Moreover, as machines take over more and
more jobs, it is unlikely that there will be enough available human work hours
to even justify a shorter work week, and so such a strategy may help in the
short-term, but just delay the inevitable in the long term (Vardi2012).
B.3. More Vacation Time:Another way of achieving the same objective of hiring more workers to
do the same amount of overall work is to provide more vacation time. For example, U.S. workers currently enjoy
much less vacation time than their contemporaries in Europe. If the U.S. was to mandate a minimum of four
weeks of vacation, this could create the need for hiring additional workers,
especially in larger facilities where work is more fungible. Of course, such a requirement would impose a
burden on employers who would be required to pay for the additional vacation
time, thus increasing payroll costs and creating some inefficiency. It would have the benefit of providing a more
enjoyable life for most employees, in addition to the impact in increasing
employment. Such a policy could be
implemented now or later as technological employment becomes more severe. Another variant would be to give employees a
paid sabbatical, which would not only
create the need for more hiring to fill the gaps, but would also give employees
an opportunity to engage in retraining or other beneficial pursuits in their
time off (Ford 2009).
Making New Work
These policy options seek to use
governmental and other non-market interventions to create additional employment
that would not otherwise be available under existing market conditions.
C.1. Government Work Programs – Government-created work programs were successful to help lift the
nation out of the great depression in the 1930s, and may be needed to help get
us out of the current great recession.For example, Kevin A. Hassett recently
made the following proposal in Congressional testimony:
The stigma of long term unemployment may be
ameliorated by a short run jobs program that recruits the long term unemployed
to assist with the normal functions of government. This may allow individuals to look for a new
job while employed, a change that may have a large impact on placement(Hassett
Interestingly, when it comes to government
training programs, Hassett claims they, “are a national embarrassment, and the
unemployed would be better off if the monies were available to individuals who
themselves chose the skills they wish to acquire” (Hassett 2013,11).
A government-assisted program might include
a, a) relocation service and subsidy to serve geographic areas or sectors that
are experiencing a shortage, b) lump-sum payment to an unemployed worker who
secures employment; c) low-interest loan to start a promising business; d) visa
or other permit to retain highly-educated and skilled foreign students or
workers; and e) reduction of red tape and tax implications involved in
establishing and maintaining new businesses (Strain, 2013).
C.2. National Service: Two kinds of national service
exist, namely mandatory or voluntary.
Whether one is preferable to the other is a matter of opinion, however,
it has been pointed out that,
A republic, to survive, needed not only the
consent of the governed but also their active participation. It was not a
machine that would go of itself; free societies do not stay free without the
involvement of their citizens (Stengel 2007).
In an article published by Time magazine, Richard Stengel,
well-known journalist, editor and author, noting the importance of national
service, nonetheless recommends that such a system should be voluntary. Stengel cites the American mindset as the
main reason mandatory service would not be successful because Americans do not
enjoy being told what to do. In terms of
the components of an incentive-basedvoluntary plan, these could include: (a)
establishment of a “national service baby bond” whereby the federal government
would invest a fixed amount of money in the name of each U.S.-born child in a
fund. At and between a certain age
range, the child would be entitled to the money in the fund provided he or she
commits one or two years to national service.
In addition, the funds could only be used for specific, worthy
expenditures (e.g. education, down payment on a home, etc.); (b) expansion and increased
awareness of existing national service programs (e.g. AmeriCorps) that would
benefit from additional membership derived from an incentive-based voluntary
program; and (c) creation of additional entities that would serve as options
for national service such as corps directed toward education, student summer
service, health, environment and emergency response. (Stengel 2007). Conceivably, the list is virtually endless
limited only by the creativity of the planners and framers of a national
service system. Providing incentives in
exchange for the execution of respectable and valuable work, which in turn also
results in skills and other professional enhancements, certainly appears to
create a win-win situation.
In terms of mandatory national service,
IlyaSomin, Professor of Law at George Mason University School of Law, has said
Mandatory national service, which would
require young people to do government-mandated work...is pretty clearly
involuntary servitude under any reasonable definition of the word.
In response to whether a national service
requirement may violate the 13th Amendment's restriction on "involuntary
servitude," Somin replied,
think that the answer is pretty clearly 'yes,' especially if you take the text
of the Constitution seriously...Note that the Amendment forbids not only
'slavery' but also 'involuntary servitude,' a provision deliberately inserted
to prevent state governments from, in effect, reenslaving blacks by imposing 'temporary'
forced labor systems (Somin 2009).
The article in The New Americanthat references Somin’s comments, provides that,
National service is just another costly and
wasteful big-government program. Like most federal government programs, it will
be top-heavy, slow-reacting, expensive, ineffective, and administered from D.C.
To get a good idea of what these new "corps" will be doing, one only
has to review what AmeriCorps has been up to since its inception (Krey 2009).
With regard to the implied failings of the
AmeriCorps program, Krey maintains that the effects of AmeriCorps activity have
been inconsequential, citing “comical volunteerism” and mismanagement with no
tangible results. He further addresses
the repercussions of a forced system which according to Krey are destruction of
private charity, government indoctrination and tax increases and inflation (Krey
The purpose of a job guarantee program (JGP) is to lift the burden off
the private sector’s shoulders during periods of slow economic growth and
provide all the unemployed with a job.
Pay would be based on the federal minimum wage and legislated benefits
would also be provided. The system
would work like a pendulum: in a boom
economy workers would move from a JGP to the private sector and back to a JGP
during times of economic bust.
The benefits of a JGP include, the
elimination of unemployment benefits and the need for other costly social
safety nets, job security, ongoing skills training and development, poverty
reduction, less economic pressure on the healthcare system, economic and social
stability and increased production of goods and services coupled with a solid
consumer base. In essence, a JGP may be
viewed as a,
…genuine bottom-up approach to economic
recovery. It is a program that trickles
up and stabilizes the rest of economic activity. Strong and stable demand means strong and
stable profit expectations. A program
that stabilizes employment and purchasing power is a program that stabilizes
cash flow and earnings. Stable incomes
through employment also mean stable repayments of debts and greater overall
balance sheet stability (Tcherneva 2011).
On the negative side, it may be argued that
implementing and running a program like the JGP would be extremely costly. However, if the government can thereby
eliminate many of the costs currently associated with paying people who are not
working, it may not be a bad proposal.
Unemployment may be viewed as a policy tool to regulate inflation
because when cost pressures rise during a slow,unemployment-ridden economy,
interest rates are tightened and wage demands are reduced which together ensure
inflation is kept in check. On the other
hand, it has been argued that the back and forth between private and public
sector employment and a fixed JGP wage are enough to control inflation.This is
the view of William F. Mitchell, Professor of Economics at Newcastle University
and Charles Darwin University, Australia, who has published extensively in the
areas of wage and price inflation and unemployment (Mitchell 1998).
C.4. Tax Credits –
A long-standing proposal to increase employment is to use the tax system to
give companies incentives to hire more workers (Spence and Hlatshwayo 2011). For example, Alan Blinder, former
vice-chairman of the Federal Reserve, has proposed giving companies a tax
credit equal to ten percent of the increase in their wage payments over the
previous year (Blinder 2013). Other
experts have proposed using tax policy to benefit young people who may be
disproportionately affected by technological unemployment (Sachs and Kotlikoff
C.5. Greater Priority for Traditional
Job-Creating Factors: Over time, we have learned
that certain societal factors and forces create new jobs, such as technology
innovation, entrepreneurship, and stable social environments. Although these
forces may not be capable of completing compensating for technological
unemployment, they may help stall and mitigate the severity of such
unemployment. Policies such as
supporting research and development, providing additional financing and
reducing regulatory burdens on small business entrepreneurs, increasing
international trade, and promoting stable family environments should therefore
be given higher priority in this time of potentially runaway unemployment
(Baker and Hassett 2012; Spence and Hlatshwayo 2011). Universities are centers
of innovation and entrepreneurial start-up companies, all of which generate
high quality jobs, and therefore should also be a priority for funding (Florida
These policy options seek to redistribute
wealth in order to blunt the human and social costs of widespread technological
D.1. Minimum Guaranteed Income (MGI):One common policy
proposal to the problem of technological unemployment is for the government to
guarantee a minimum income to each citizen.
While this proposal seeks to address some of the humanitarian problems
associated with chronic unemployment, it is also the case that government-conferred
benefits without demanding work from those who are able undermines the work
ethic, attenuates social bonds, creates an alienated underclass and breeds
resentment among those who have to pay (assuming the employed are being taxed
to assist with subsidization). This is the lesson learned from previous welfare
programs. Of course, these impacts
would be mitigated somewhat by the government not having to pay for some
existing drains on the public purse such as unemployment benefits, food stamps
and social security that could be replaced by a MGI. Nonetheless, a MGI would
likely have a corrosive effect on the social fabric, would not address the need
for people to have a meaningful purpose to their lives, and would likely be
politically infeasible in this era of government cut-backs and retrenchment.
Switzerland’s upcoming national referendum on a proposal for a guaranteed
national income will be an interesting test case for the political feasibility
of the MGI – if it is not approved in that nation, it is unlikely to be adopted
in countries like the USA that historically and culturally have a smaller role
for government involvement.
D.2. “Smart” Social Programs -The human impacts of long-term unemployment
are real and tragic, and from a humanitarian perspective cannot be ignored if
we are entering an era of growing technological unemployment. Painful lessons from the past half-century of
social programs have taught us that simply providing disadvantaged individuals
with a monthly check does not usually help those people to get back on their
feet and become self-supporting. Rather,
such handouts tend to create cycles of dependency, lethargy, and lack of self
and external respect. While the ethical
case for some type of support to ensure a minimal standard of life is strong,
such support should be structured to include incentives and training
provisions. Martin Ford for example, has
suggested a system based on government-provided income that is fed by taxation
on businesses (who will not have to pay wages, benefits, vacation pay and so
forth) and consumer goods and services (Ford 2009). The model involves “incentives” that, if
fulfilled, would have a positive effect on one’s income: the greater the response to the incentives,
the greater the incomethe individual will receive. Such incentives might
include participation in environmental stewardship, continuing education,
child-care, art, music, volunteer work and other laudable activities. Ford’s proposal arguably eliminates the often
negative effects of having “idle hands,” low self-esteem associated with job
loss, social stigma and unproductivity.
Under this incentive model, the individual incomes received while unequal
would not be unfair.
These policy options seek to revise our
educational system to make workers more adept in succeeding in an increasingly
technology-focused and changing world.
E.1. Lifelong Education Policies: The traditional model of education in which young people spend the
first quarter or so of their life getting educated and then are done with
education is quickly becoming obsolete. In
such a rapidly changing world, there is a need for continuous, life-long
education rather than the current “once and done” approach to education
today. Education will need to become
more dispersed and delivered in a multitude of ways throughout a person’s
life. Governments, educational
establishments and employers will all need to work together to create a new
ethos of lifelong learning. This shift
could be encouraged by a mix of tax credits, employee incentives, and new online
educational technologies to create consumer demand for lifelong learning. Michael
Spence, for example, has argued that the education system should be given
greater value and to provide access for as many people as possible in order for
the U.S. workforce to remain competitive (Spence2011, 39). He argues that this
focus should go hand in hand with tax reform and government investment in
infrastructure and technology
Similarly, the NAS reported in 1987 that,
“a key factor in sustaining American living standards and employment thus is
continued private and public investment in new knowledge” (National Academy of
Sciences1987, 3). The NAS also
underscored the importance of establishing training-focused adjustment policies
for effective worker transitions in the wake of technological displacement. The source of funding for this revised
educational policy wasdeemed to be beyond the NAS panel’s charge. One barrier to ongoing training through the
workplace is that shorter job durations that many employees now experience
provides less incentive for employers to pay for ongoing training, since that
employer will not get the benefit of that training once the employee has moved
on to another job (Dau-Schmidt 2001).
Updated Education Curriculum: In addition to
becoming life-long, the content of education must also change to align with a
rapidly changing world. At a time of
unprecedented global change, teaching static views of the world focused on
facts and information (all of which is now readily available online) is
obsolete. In a world dominated by
technology, greater emphasis must be given to science, technology, engineering
and mathematics (STEM) education, as has been well-recognized recently but slow
to be implemented. More importantly, the type of adaptive and forecasting
skills that will be essential in a time of rapid change must be taught,
including study of the possibilities and probabilities of human change,
awareness of fluctuations and alternatives, a menu of skills for emerging jobs
and coping skills, flexibility, and adaptability to change.
As Abdul Raheem Yusuf has suggested, the
era of rapid technological change necessitates that humans of the future be
educated thinkers who are problem solvers, leaving the mundane tasks to
technology (Yusuf, 2007). Similarly,
Frank Levy and Richard Murnane predict that,
The major consequence of computerization
will not be mass unemployment but a continued decline in the demand for
moderately-skilled and less-skilled labor.
Job opportunities will grow, but job growth will be greatest in
higher-skilled occupations in which computers complement expert thinking and
complex communication to produce new products and services (Levy and
Murnane 2004, 79).
Levy and Murnane further maintain that
while better education is not a perfect tool it is the best one we have to
prepare workers for the unpredictable and ever-changing employment market. The
authors conclude that many of the jobs already lost will not return and that
our “dynamic environment requires new policies, and the first step in creating
those policies is to recognize the new realities” (Levy and Murnane 2004, 82).
In a subsequent report prepared for the
Organization for Economic Co-operation and Development (OECD), Levy distinguishes
among inductive/deductive rule-based skills, expert thinking and complex
communication –only the first of which can be performed by a computer. Jobs requiring expert thinking and complex
communication, on the other hand, require a robust educational foundation and
are, thus, not easily replaced with automation.
To remain successful in the future job market, Levy recommends that
workers must stay abreast of job market trends and hone skills that complement
technology rather than skills that may be eliminated by same (Levy2010).
E.3. Greater Educational Experimentation: Given the many stresses and
changes affecting education, this is an opportune time for more experimentation
in education to try to find what strategies and approaches work best in the era
of evolving technologies and jobs. One
track to try might be greater emphasis on the type of trade school model used
more in the United Kingdom and some other European nations, where some students
may opt for a more practical and skills-oriented training rather than attending
traditional college. While studies consistently show that young people with a
university degree do much better than those without in terms of finding quality
jobs (Berger and Fisher 2013; Pielke 2012), a growing number of university
graduates are not finding worthy jobs, despite having gone deeply into debt to
pay for their college education, and may have fared better with a more focused
skills-based or trade school education (Silva 2013). For example, a recent poll
conducted by Accenture found that forty-one percent of recent college graduates
say they are underemployed and sixty-three percent say they will need more
training in order to get their desired job (Accenture 2103).
The advent of online education and massive open
online courses (MOOCs) is another opportunity for experimentation. Even more radical are promising existing
programs to develop robotics for teaching, such as “RUBI” at the University of
California, San Diego, “Simon” at the Georgia Institute of Technology, and
“Cosmobot” developed by AnthroTronix.
Different models of funding education, including private enterprise
training and block grants to states, can also be tried. In all these various experiments in
educational innovation, careful metrics should be kept to evaluate the success
and strengths and weaknesses of the various approaches.
E.4. Mental Upgrading: Brynjolfssonand McAfee (2011) consider ways to directly upgrade
the human brain using brain-computer interfaces thereby allowing us to better keep
pace with technological change.
Unemployment here is viewed as the result of people not being able to keep
pace with technology. An enhanced
existence may therefore help to eliminate unemployment as our altered state of
mind would be better prepared for anything the future throws our way. Relatedly, our superior cognitive
capabilities might induce us to either reject a market economy or, alternatively,
spark new industries to keep employment vibrant.
Fostering a New Social Contract
These policy options seek to alter the
existing social model in which an individual’s economic livelihood, social
status, and personal self-worth are based on their employment.
F.1. Health Care Not Tied to Job:In the new culture of the future, flexibility will be paramount to
allow individual workers to adapt to new technologies, industries and
opportunities. Moreover, the concept of
having a single job is increasingly outmoded for many people, who by choice or
necessity cobble together their own portfolio of contractual tasks, part-time
jobs, short-term jobs, freelance jobs, commissioned projects, entrepreneurial
initiatives, and other income-earning opportunities to make their
livelihood. This pattern will become
more and more common going forward. The
regulatory and social benefit approaches to employment must adjust to this
changing model(Dau-Schmidt 2001). Most
people now have their health care tied to a specific employer, which constrains
the employment flexibility and adaptation that will be needed for the
future. As Ford writes, “[o]ne thing
that is abundantly clear is that, in a world where traditional jobs are
disappearing, access to healthcare insurance cannot be coupled to employment”
(Ford 2009).New models of health care will be needed for the future whereby
health insurance is not tied to a single employer. Health care exchanges, such as those that are
being established under the Affordable Care Act in the United States, health
care coops, or universal health care are models that will better fit the
changing workplace of the future.
F.2. Alternative Valuation System: For hundreds of years, our
society has been structured on an economic model in which people earn their
income through employment, and then use that income to pay for their living
costs. This model may be facing collapse
if technological unemployment results in a significant proportion, perhaps even
a majority, of the population eventually unable to support themselves because
of the shrinking employment opportunities.
A new social order will be needed to both provide basic essentials for
such people to live a good life, as well as to live of life of dignity, respect
and accomplishment. As discussed above,
simply giving handouts to affected persons undercuts their respect to both
themselves and the members of their community.
Healthy, happy living requires the sense that one is making a
contribution to something meaningful.
Traditionally, but not always, that source of meaning and achievement
has often been associated with one’s job.
But that has never been the case for everyone, as some find meaning and
respect outside of the employment context, whether it is as a caregiver for
children or elder relatives, a volunteer for a charitable organization, an
advocate for a cause, or as a serious hobbyist.
The problem of technological unemployment
means that more people will need to find their meaning or value in life outside
of the employment relationship, and
there will be a need to incentivize and reward such activities when they are
socially valuable in a way that can allow those people to obtain the amenities
(shelter, food, clothing, health care, etc) necessary to live a full and
satisfactory life. In the long term this
may mean moving beyond the existing economic model where dollars earned are
used to recognize and reward effort, to a broader and more flexible metric to
recognize and reward social value.
Perhaps some type of online social contribution index will eventually
need to be created, whereby individuals score points for traditional work, volunteer
efforts, caregiving activities, creative inventions, good deeds, and other
socially valuable contributions.
Compensation and entitlements would be based on each individual’s social
contribution score. The era of Big Data and
the massive amount of information collected daily on each person would be used
to generate the rankings needed to administer such a system. While such a post-economic schememay seem
far-fetched and infeasible at this time, such social engineering to restructure
our social expectations and reward systems may be needed over the long-term to
address both the economic and social dimensions of the technology unemployment
problem. Although such systems go beyond
our current market system, the fact is that the market system is dependent on
customers, and if large numbers of consumers (perhaps even a majority) are
without any means to purchase goods and services, the market economy cannot
Change always brings with it risk and
opportunity. The rapid emergence of a growing
number of technologies that can replace human “work” presents both risks and
opportunities. The real possibility of widespread and chronic technological
unemployment could result in unacceptable individual and societal instability
and adversity. But those same
technologies also have the potential to enrich our lives and to free us from
the drudgery and danger of manual, boring labor and to enjoy a higher quality
of life. To make this happen, our laws,
policies, assumptions and social contract must evolve as quickly as our
technologies will. There is thus an
urgent need to identify, evaluate and implement policies that can help manage
and smooth our transition into the new technological era (Perry 2013). Shorter-term policies need to focus on preserving
and creating as many jobs as possible to counter and delay as much as possible
the trend towards technological unemployment, and then to use redistribution
and government support to ensure that individuals who are replaced from their
(existing or future) jobs by technology have the material means to live a
decent life and the incentive to improve themselves and live with dignity and
respect. Over the longer term, more
radical social engineering policies will be needed, moving eventually to a new
social contract that recognizes and rewards people for their contributions to
society within and outside the employment context.
We hope to contribute to the effort to
ensure an appropriate policy response by inventorying an initial list of
potential policy initiatives to address the emerging technological unemployment
problem. We plan to post this list
online and update it on a regular basis, and welcome suggestions from readers
for additional ideas of policy interventions that we can add (with appropriate attribution)
to our evolving list. There will be no
single “silver bullet” that will solve this problem, but rather what is needed
is experimentation with a constantly shifting portfolio of policies such as
some of the ones provide here. The more
ideas and proposals are available for policymakers to choose from, the more
successful and effective their policy experimentation is likely to be.
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