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ITIF Debate: Is Technology Responsible for American Job Loss?

September 16, 2013

MIT CDB Principal Research Scientist, Andrew McAfee, squared off with The Information Technology and Innovation Foundation President, Robert D. Atkinson, last week on a critically important and complex technology issue facing the U.S. and the world economy as a whole: the impact of IT on employment.

McAfee, citing data and his research from Race Against the Machine, and his upcoming new book with Erik Brynjolfsson, The Second Machine Age, believes that yes, technological advancements are partially responsible for the decline in jobs, but that’s just one facet of a more complex scenario. Atkinson believes that technology does not lead to job loss and, in fact, he says, we need to accelerate the pace of automation to stay competitive.

Below is a brief recap of the debate. You can also view the video here and then weigh in with your opinion.

Mcafee: Reasserting that he is a strong IT advocate and optimist, McAfee also said the results of automation and technological advances are not equitable. “Unambiguously, technology grows the overall pie,” he said,” but under the surface,

technological progress doesn’t’ “raise all boats equally.”

For example, technology favors skilled workers versus less skilled. It can also spark greater investments in capital versus labor. Thirdly, “superstars at the top are favored over other employees. These biases exist” and the data on wages, capital spending, profits and the GDP bear this out, he said.

McAfee lauds the rise of computers and digitization and credits it with boosting post-World War II wages, employment and productivity. IT has also broadened and deepened access to information and automating knowledge work as well as physical work. Today, however, while output and productivity continue to grow, wages and job growth are tapering off. The current “decoupling of output and labor” –that is employment and wages– is not only the result of technological progress, but of globalization, outsourcing and tax policy changes as well.

Atkinson:For his part, Atkinson, who is also co-author of Innovation Economics: The Race for Global Advantage, maintained that in the overall economy productivity gains are not related to net job loss. McAfee’s decoupling theory is misleading, he said, because it doesn’t take into account demographic changes such as the effect of women in the labor force and of the increase in the number of retirees. “This is not a new debate,” Atkinson said.

“When there’s higher unemployment, we blame technology; when the economy comes back, the discussion changes.”

You can have high productivity and employment growth at the same time, he argues.

The ITIF maintains that the revenue-producing side of technology is more powerful than the labor-displacing aspects. Moreover, Atkinson asserts that automation leads to lower costs, lower prices and more consumer spending, which in turn creates new jobs. The loss of high-end manufacturing jobs overseas is to blame for U.S. employment, he said, not automation.

Another interesting perspective on AI and unemployment can be found here. What do you think?