Viewpoint

Could Artificial Intelligence Create an Unemployment Crisis?


Could Artificial Intelligence Create an Unemployment Crisis?, illustration

There is an often-told story about the libertarian economist Milton Friedman. While visiting a large-scale public works project in a developing Asian nation, Friedman asked a government official why he did not see much heavy earth-moving equipment in use; instead, there were large numbers of workers with shovels. The official explained that the project was intended as a jobs program. Friedman replied with his famous and caustic question: "So why not give the workers spoons instead of shovels?"

That story is a pretty good indication of the almost reflexive derision that is likely to arise in response to any serious speculation about the possibility that advancing technology could destroy jobs and cause long-term structural unemployment. Nonetheless, I think there are good reasons to be concerned that advances in artificial intelligence and robotics are rapidly pushing us toward an inflection point where the historical correlation between technological progress and broad-based prosperity is likely to break down—unless our economic system is adapted to the new reality.

Why should the implications of today's accelerating information technology be different from the innovations of the past? I believe the answer lies in the nature of the transition that will be required for the majority of the workforce to adapt and remain relevant.

Most of the work required by the economy is—on some level—fundamentally routine in nature. By this, I do not mean the work is rote repetitive, but rather that it can be broken down into a series of discrete tasks that are relatively predictable and tend to get repeated over some time frame. The percentage of people who are paid primarily to engage in truly creative or non-routine occupations is fairly small. This has always been the case, and the repetitive nature of most jobs has historically been a good match with the capabilities of the average worker.

Technology has, of course, often disrupted and even destroyed whole industries and employment sectors. In the U.S., the mechanization of agriculture vaporized millions of jobs and led workers to eventually move from farms to factories. Later, manufacturing automation and globalization caused the transition to a service economy. Workers repeatedly adapted by acquiring new skills and migrating to jobs in new industries—but these changes have not altered the fact that most jobs continue to be essentially routine.

In the past, disruptive innovations have tended to be relatively specialized and to impact on a sector-by-sector basis. Workers have responded by moving from routine jobs in one area to routine jobs in another. Today's information technology, in contrast, has far more broad-based implications: it is transforming and disrupting every sector of the economy. For the first time in history, computers and machines are increasingly taking on intellectual tasks that were once the exclusive province on the human brain. Information technology will continue to accelerate, and it is certain to be tightly integrated into any new industries that arise in the future.

The impact of information technology on the job market, and in particular on more routine jobs, has been well documented.2,3 Economist David Autor of MIT, in particular, has done extensive analysis showing that the job market in the U.S. has become polarized.1 A substantial fraction of moderate wage, routine jobs in areas like manufacturing and white-collar clerical occupations have been eliminated by technology, leaving the remaining employment opportunities clustered at the top (high-wage/high-education jobs) and at the bottom (low-wage jobs requiring little education).

While economists have noted the correlation between whether or not a job is routine and its susceptibility to automation, I do not think they have yet fully acknowledged the future impact that accelerating progress is likely to have. Our definition of what constitutes a "routine" job is by no means static. At one time, the jobs at risk from automation were largely confined to the assembly line. The triumph of IBM's Watson computer on the television game show "Jeopardy!" is a good illustration of how fast the frontier is moving. I suspect very few people would characterize playing "Jeopardy!" at a championship level as routine or repetitive work, and yet a machine was able to prevail.

Machine learning, one of the primary techniques used in the development of IBM's Watson, is in essence a way to use statistical analysis of historical data to transform seemingly non-routine tasks into routine operations that can be computerized. As progress continues, it seems certain that more and more jobs and tasks will move from the "non-routine" column to the "routine" column, and as a result, an ever-increasing share of work will become susceptible to automation.


It is important to realize technology does not have to cause immediate job destruction in order to create significant future unemployment.


This goes to the heart of why the historical record many not be predictive with regard to technological unemployment. In order to remain essential to the production process, workers will have to make a historically unprecedented transition. Rather than simply acquiring new skills and moving to another routine job, workers will have to instead migrate to an occupation that is genuinely non-routine and therefore protected from automation—and they may have to do this rapidly and repeatedly in order to remain ahead of the advancing frontier.

There are good reasons to be pessimistic about the ability of most of our workforce to accomplish this. If we assume, as seems reasonable, a normal distribution of capability among workers, then 50% of the workforce is by definition average or below average. For many of these people, a transition to creative/non-routine occupations may be especially challenging, even if we assume that an adequate number of such jobs will be available.

Both the high and low ends of our polarized job market are likely to come under attack as technology advances. Higher-wage white-collar jobs will be increasingly susceptible to software automation and machine learning. One of the biggest drivers of progress in this area is likely to be the "big data" phenomenon and the accompanying emphasis on algorithmic techniques that can leverage the enormous quantities of data being collected.

Much of the initial focus has been on how big data can be used to give organizations a competitive advantage in terms of marketing and customer relationships. However, corporations are certainly also collecting huge amounts of internal information about the work being done by employees and about their interactions with customers—potentially creating a rich dataset that future machine learning algorithms might churn through.

The impact is already being felt in a number of professions. Lawyers and paralegals have been displaced by e-discovery software that can rapidly determine which electronic documents are relevant to court cases. More routine forms of journalism—such as basic sports and business writing—have been successfully automated. Entry-level positions are especially vulnerable, and this may have something to do with the fact that wages for new college graduates have actually been declining over the past decade, while up to 50% of new graduates are forced to take jobs that do not require a college degree.5

The polarized nature of the job market means workers who fail to find and retain one of the high-end jobs face a long fall. The lower-end jobs are heavily weighted toward hourly service positions with minimal wages and few benefits. These, often part-time, jobs in areas like retail, fast food, and full-service restaurants, have traditionally offered a kind of income safety net for workers with few other options.

Yet there are good reasons to expect that even these lower-range jobs may soon come under significant pressure from technology. For example, it is easy to envision increased automation taking hold in the fast food and beverage industry. From a technical standpoint, fast food is not really a service industry at all: it is, rather, a form of just-in-time manufacturing, and there is no good reason to believe it will be forever exempt from the advances that are transforming other manufacturing sectors.

Retail jobs are also likely to be impacted. Self-service checkout lanes are becoming increasingly prevalent and popular. Mobile applications offer in-store access to product information and customer service. Wal-Mart is currently testing a service that allows customers to scan barcodes and then pay for their purchases with their mobile phones—completely avoiding lines and cashiers.

Brick-and-mortar retailers will also continue to be disrupted by online competitors like Amazon, especially as Internet retailers offer faster delivery options and as customers increasingly use mobile technology to look for lower prices online. In theory, this should not destroy jobs but simply transition them from traditional retail settings to warehouses and distribution centers. However, once jobs move to a warehouse environment, they seem likely to be more susceptible to automation. Amazon's purchase of Kiva Systems—a company that focuses on warehouse robotics—is probably indicative of the trend in this area.

Many low-wage jobs have been protected from automation primarily because human beings are extremely good at tasks requiring mobility, dexterity, and hand-eye coordination, but these advantages are certain to diminish over time. Robots are rapidly advancing while becoming less expensive, safer, and more flexible, and it is reasonable to expect they will have a potentially dramatic impact on low-wage service sector employment at some point in the not too distant future.

It is important to realize technology does not have to cause immediate job destruction in order to create significant future unemployment. The U.S. economy needs to generate in excess of 100,000 new jobs per month just to keep up with population growth. As a result, anything that significantly slows the rate of ongoing job creation could have a significant impact over the long term. Because workers are also consumers, entrenched technological unemployment would be very likely to depress consumer spending and confidence—thereby spawning a wave of secondary job losses that would affect even occupations not directly susceptible to automation.4

I suspect the impact of accelerating technology on the job market may ultimately represent a dramatic and vastly under-acknowledged challenge for both our economy and society. Many extremely difficult issues would arise, including finding ways for people to occupy their time and remain productive in a world where work was becoming less available and less essential. The biggest immediate challenge, however, would be one of income distribution: how will people without jobs and incomes support themselves, and how will they be able to participate in the market and help drive the broad-based consumer demand that it vital to sustained economic prosperity and innovation?

Finally, it is worth noting everything I have suggested here might be thought of as the "weak case" for technological disruption of the job market. I have presumed only that narrow, specialized forms of machine intelligence will increasing eliminate more routine jobs. None of these technologies would be generally intelligent or could pass a Turing test. Yet, the more speculative possibility of strong AI cannot be completely discounted. If, someday, machines can match or even exceed the ability of a human being to think and to conceive new ideas—while at the same time enjoying all the advantages of a computer in areas like computational speed and data access—then it becomes somewhat difficult to imagine just what jobs might be left for even the most capable human workers.

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References

1. Autor, D.H., Katz, L.F., and Kearney, M.S. The polarization of the U.S. labor market. American Economic Review 96, 2 (May 2006), 189–194.

2. Autor, D.H., Levy, P., and Murnane, R.J. The skill content of recent technological change: An empirical investigation. Quarterly Journal of Economics 118, 4 (Nov. 2003), 1279–1333.

3. Brynjolfsson, E. and McAfee, A. Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy. Digital frontier Press, 2011.

4. Ford, M. The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future. Acculant Publishing, 2009.

5. Hagerty, J.R. Young adults see their pay decline. The Wall Street Journal (Mar. 9, 2012); http://online.wsj.com/article/SB10001424052970204276304577265510046126438.html.

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Author

Martin Ford (lightstunnel@yahoo.com) is a software developer, entrepreneur, and author of the book The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future, which focuses on the economic impact of artificial intelligence and robotics. He has a blog at http://econfuture.wordpress.com.


Copyright held by author.

The Digital Library is published by the Association for Computing Machinery. Copyright © 2013 ACM, Inc.


Comments


James Lundblad

I think the Modern Monetary Theory (aka MMT) economists have proposed one possible solution to this problem in the form of a Job Guarantee pool rather than an Unemployment pool to managed demand in the economy and price stability. I am very interested in what you think of this and the work of Bill Mitchell et al.


Jim Cross

It seems like there need to be a major transformation in the politics in United States if 50+% of the population becomes unemployable. I am wondering how you see all of that playing out.

Unfortunately I think probably we will be need to test some kind of severe economic meltdown before we reach a consensus that we may just need to pay people even if they do not work.


Luke Lee

Excellent article and I agree increased IT efficiency in robotics, various software applications, and electronic transaction systems usually leads to replacing rather than creating jobs in production lines or supply chains. However, at the same time, I wonder why few have considered the increasingly unfair conditions for competition between big companies and small- and medium-sized companies (SMBEs) in the dominant 2-D (one-to-multiple based) supply chain processes constructed from ancient point-to-point (or 1-D) supply chain networks in the recent IT revolution. These new competitive conditions killed jobs in the market on a massive scale, along with achieving their overt aim of raising barriers to market entry or to survival for SMBEs themselves. Moreover, a vicious cycle for jobs has already been formed between them and aggravated further the unemployment situation. If we could break down this vicious cycle, I believe there might be a strong solution for jobs. I would suggest you also take a look at this article: “How a 3-D Supply Chain Process System Could Revolutionize Business” http://savingtheworldeconomy.blogspot.com/2013/06/how-3-d-supply-chain-process-system.html?spref=tw


Anonymous

A Basic Income Guarantee could never work - if the rate of unemployment boils over, do you really think business owners are going to submit to an extreme tax policy when they can just move elsewhere? Hell no! The State couldn't possibly afford a Basic Income policy for long. The only long term solution is the abolition of capitalism: a complete change in existing social relations so that we live in a world where technology works for us as a race, and not us for it.


Anonymous

Martin, you make an excellent case for technological unemployment. Call me convinced that a significant amount of work will be automated that even those not directly affected have an interest in solving the problem of securing incomes for the unemployable.

I'd love to hear more about how to take some of these politically unfeasible solutions and make them feasible. For example, are there policies we could pass now, because the structural unemployment is comparatively small, that could then grow with the problem? I'm thinking the same way Social Security was once a small program that has since grown into significant economic impact now that we enjoy the awesome gains of lower mortality and raised life expectancy medical technology has achieved in the interim. Perhaps expanding disability to include loss of job due to automation?


Anonymous

No, what we need are fewer unproductive people. If you can't produce, then you have no right to reproduce.


Anonymous

Scientific discovery never retreats. There is a an Asian/American Team of Robotics Engineers working on the next generation of free thinking robots which can emulate all the facial/body emotional characteristics. We went from the Wrightsbrothers to the Moon in 69 yrs. Automation/Robotics/Bio Engineering are advancing exponentially. We as a society have to come together and start engineering a new social reallity devoid of politics. A greater challenge will concern the global social/economic/geopolitical implications of these scientific advancements and their current pace. Frank F. McHugh


James Lundblad

The government must be the employer of last resort in a situation where productivity is very high and fewer people are required to produce goods and services, otherwise there will not be insufficient demand to support the economy. As the MMT economists (Mosler, Kelton, Galbraith, Mitchell, Wray) point out, it is not necessary for the government as the issuer of the currency to tax or borrow in order to pay for goods and services. The only constraint is on real resources and human productivity to avoid inflation should demand be too high, then taxes and/or reduced government spending should reduce demand.


Roland Crespo

I agree with Martin Ford's ideas. Being a systems developer, I have personally, albeit unknowingly, at least at first, help replace tens of thousands of workers by automating processes.

I also agree that there will need to be a basic guaranteed income, that is assuming we keep the idea of money at all. if automation injects value into society and 3D printing, robotics and, eventually, molecular manufacturing do the heavy lifting then our only job will be consumption.

I have no problem with this. In fact, I think it will be a much more fulfilling future for the entire race. The issue will be transitioning and I would love to hear more from Martin in that area. I believe this is a national discussion that we must have and one that should have started long ago. There are no plans on the table other than Obama's recent speech to move high school to six years and include a two-year associate's degree in computer science.

Also, I do not agree at all with the political comments made earlier about employers moving jobs elsewhere. Saying that clearly underscores that this individual does not understand enough about the situation surrounding the rise of automation. He or she may well have been quoting old time labor. Both Martin Ford and Eric Drexler discuss that the products of automation will be substantially better in both function and cost to ever consider for a single second that manufactures will move production "off-shore". There is no more "off-shore". And these new techniques will only appear there as well because they are entirely too useful to be without. Maybe they might use NASA's new warp drive to go to another planet to pursue these ridiculous ideas through the rape of indigenous populations, I suppose.

Likewise, the eugenics comment that the right to reproduce is somehow linked to the ability to contribute to a society. Ridiculous and unworthy of the ACM whose ethical policy has never been one to leave anybody behind.

So, let's have this discussion. Maybe it starts with a symposium - a Lights in the Tunnel conference modeled after the 100-year starship project? We need to have this sooner rather than later because the pace of change will replace everyone. This December is the DARPA Robotics Challenge.

It is only a matter of when this AI thing happens. And it will happen with public funds or private because everyone knows the first one to achieve this goal wins the planet. Maybe the galaxy. By having the conversation, maybe we can control how it's implemented.


CACM Administrator

The following letter was published in the Letters to the Editor in the November 2013 CACM (http://cacm.acm.org/magazines/2013/11/169039).
--CACM Administrator

My essay "The World Without Work," included in the 1997 book Beyond Calculation, curated by Peter J. Denning for ACM's golden anniversary, weighed many of the issues Martin Ford addressed more recently in his Viewpoint "Could Artificial Intelligence Create an Unemployment Crisis?" (July 2013) where he wrote, "Many extremely difficult issues could arise, including finding ways for people to occupy their time and remain productive in a world where work was becoming less available and less essential." I would go further; with the likely advances in artificial intelligence and robotics, work will eventually not be essential at all, at least not for physical sustenance. Our stubbornly high levels of unemployment, likely to rise dramatically in the future, already reflect this prospect.

Certain classes of people (such as the elderly, the young, and the disabled) are generally already not expected to work. Why would anyone be required to work at all? Why not just have the government provide some basic level of support for the asking, with work something people do only to go beyond that basic level or for their own satisfaction? We are not far from this being feasible, solving the unemployment problem in a single stroke. The cost, though enormous, would be covered by harvesting the additional wealth created by society's overall increased productivity and lowered costs, the so-called Wal-Mart effect, taken to the limit. Though tax rates would have to increase, after-tax purchasing power would not have to decrease. The remaining work would be more highly compensated, as it should be.

What work is already not being done? Consider the prompt filling of potholes in our streets. If we can have self-driving cars, we can certainly have automated pothole-fillers.

Ford also said, "If, someday, machines can match or even exceed the ability of a human being to conceive new ideas... then it becomes somewhat difficult to imagine just what jobs might be left for even the most capable human workers." But some jobs will never be automated. Consider ballet dancers and preachers. With ballet dancers the audience is captivated by how gracefully they overcome the physical constraints of their bodies. An automated ballet dancer, no matter how graceful, would be nowhere near as interesting as a human one. Preachers inspire us by establishing emotional rapport; no robot, no matter how eloquent, will ever do that.

Paul W. Abrahams
Deerfield, MA


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