Why Worry About Automation?
By Christopher Pissarides  |  Jun 29, 2021
Why Worry About Automation?
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From the Luddite movement in the early 19th century to the writings of prominent economists like John Maynard Keynes and Wassily Leontief generations later, the prospect of automation has always raised serious concerns about jobs. Today, facing an onrushing wave of digital automation, many share their unease.

LONDON - From the Luddite movement in the early 19th century to the writings of prominent economists like John Maynard Keynes and Wassily Leontief generations later, the prospect of automation has always raised serious concerns about jobs. Keynes and Leontief doubted there would be enough jobs left for workers to do. Today, facing an onrushing wave of digital automation, many share their unease.

The impact of today’s digital technologies on the labor market raises three questions. Will there be enough jobs for workers to do? Where will these jobs be? And will the compensation be high enough to avoid an increase in poverty and inequality?

The answer to the first question is unequivocal. Historical evidence shows that labor-replacing technological innovation does not lead to long-term changes in employment and unemployment rates in industrial countries. Keynes talked about “technological unemployment,” and there is no doubt that in the 1920s and the subsequent Great Depression, one of the biggest causes of unemployment in Britain was the decline of coal and other industries in the face of competition from Germany and the United States. Workers’ skills and geographic location ruled out quickly redeploying them elsewhere in the economy. But that transitional episode eventually passed.

Fear of technological unemployment persists because it is rooted in uncertainty about new job creation. New machines’ capabilities enable us to identify the jobs at risk, but not the jobs yet to emerge. We have to guess by comparing the capabilities of workers and machines, which often tilts the balance in favor of estimates of net job loss.

But we have abundant evidence of human ingenuity in creating new jobs. When Keynes wrote, the service sector in Britain and the US employed about 40 percent of workers. Employmen

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