Research Project

Digital Technologies and Their Impact on the Earnings Prospects of American Workers

Professor Erik Brynjolfsson and Dr. Andrew McAfee
Sponsor:  Markle Foundation

This project investigates an under-studied yet critical issue: the impact of digital technologies on the earnings prospects of American workers.  Some of the news is clearly bad. The median American household earns less than it did fifteen years ago, labor's share of national income peaked in the early 1980s has been falling pretty steadily since then, long-term unemployment has emerged as a vexing problem, and startups are creating many fewer jobs than they used to. Technological progress has been linked to these and other trends, including by us in our 2011 short book Race Against the Machine.  However, there is also some good news — reason to believe that technology is helping at least some workers and households earn money in ways that were not previously possible eBay and newer marketplaces like Etsy allow people to reach large markets for the goods they make and trade, and startups like AirBnB and RelayRides let people earn incremental income by renting their houses and cars in lightweight and flexible ways.  Some other recent technology developments, however, are ambiguous at this point; it's not clear if they're good news or bad news for workers overall. For example, there is now a large variety of online labor sourcing platforms including (but certainly not limited to) Innocentive, Liveops, oDesk, 99Designs, TaskRabbit, Samasource, Crowdflower, and Amazon Mechanical Turk. Are they providing much-needed supplemental income, putting people out of work, or both? Are they tools of economic empowerment for individuals, or digital sweatshops? It's also not clear if the new generation of robotics coming very soon to factories, warehouses, and distribution centers will assist human workers or replace them.