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Automation is Changing More Than Jobs

July 3rd, 2019

David Autor

Automation, powered by artificial intelligence, is rapidly and profoundly transforming the American economy and its society, says MIT economist David Autor.

The former is becoming more obvious everyday, as companies increase their investment in robots -- electronic as well as mechanical. The latter, though, hasn't been much noticed, and even less reported on. Autor, himself, isn't certain how the transformation will evolve, though as he said in is keynote last month at the MIT Initiative of the Digital Economy (IDE) annual conference, the change is most evident in the nation's cities, and especially in the "superstar cities" where productivity and pay is growing the fastest.

“Cities have become much more educated, much more skill-intensive, much higher wage places,” said Autor, according to an account of his talk on the MIT website.

As he explained it, the jobs that traditionally were available to middle-skilled workers without a college education are some of the easiest to automate. They therefore are disappearing, pushing these people down the "career escalator" and into low-skilled service jobs. This has created, Autor said, a "bifurcation of work, such that a lot of the role of noncollege workers in urban areas is now basically to see to the care and convenience and maintenance of the affluent, rather than working jointly with them in producing stuff.”

Demand for knowledge-skilled workers has sharply increased the percentage of workers with a college degree, absorbing the supply and elevating wages. Meanwhile, even though the percentage of those with a high school degree has dropped even more dramatically, their ability to migrate up the job ladder has diminished.

“We have tons of great careers for the highly educated,” Autor said.“We have tons of jobs for the less educated. But we have relatively few remaining careers for the less educated.”

What's needed, Autor said, is to create jobs with a future for these workers. The ladder that once existed enabling those with only a high school education to move up needs to be recreated, a challenge he believes that can be met, as it has in the past.

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