Some forecast that there will be no jobs in the future, as software and robots and other forms of mechanization take over more and more tasks now performed by actual people. To understand the issue, we need context and background.
Manufacturing output in the US is near record levels, up 30% from the recession levels of 2009. Yet manufacturing employment peaked in 1979 at 19 million workers. The total today is around 12 million workers1. One might say ‘The robots are already here.’
While seven million manufacturing jobs were lost, fifty million jobs were added to the total. Manufacturing jobs were not the only ones that disappeared, however. Millions of other jobs became obsolete. File clerks, telephone operators, laborers with shovels, elevator operators, secretaries, and farm workers were displaced by new machines and new methods.
In a dynamic economy, we perpetually do more with less. In the year 1900, 40% of Americans were engaged in producing our food2. When that declined to under 2%, we didn’t end up with 38% unemployment.
There is another way to look at it. Tens of millions of people are now engaged in occupations that did not exist forty years ago, near the peak in manufacturing employment. Similar change happened between 1900 and 1940, and 1940 to 1980. Why would we doubt that 2010 to 2050 would be any different?
A recent report in the European Parliament concluded that “Humankind stands on the threshold of an era when ever more sophisticated robots, bots, androids and other manifestations of artificial intelligence (‘AI’) seem poised to unleash a new industrial revolution, which is likely to leave no stratum of society untouched.” This presents more opportunity for society than danger, if history is any guide.
It’s going to be exciting. Please call us or write with questions or concerns.
1,2Federal Reserve Bank of St. Louis
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.