
Economists Say Newest AI Technology Destroys More Jobs Than It Creates (2014) - joeyespo
https://hardware.slashdot.org/story/14/12/17/0512208/economists-say-newest-ai-technology-destroys-more-jobs-than-it-creates
======
bmay
> When the University of Chicago asked a panel of leading economists about
> automation, 76 percent agreed that it had not historically decreased
> employment.

> But when asked about the more recent past, they were less sanguine. About 33
> percent said technology was a central reason that median wages had been
> stagnant over the past decade, 20 percent said it was not and 29 percent
> were unsure.

These two statements are distinct - the first is about employment, the second
is about wages.

It seems like the author is making a leap of logic and not the words of
economists to connect them.

~~~
guelo
Econ 101 says lower price means either not enough demand or too much supply.
Lower wages imply lower demand for employees, i.e. fewer jobs. Or maybe too
much supply of employees.

~~~
harry8
Econ 101 says you're assuming zero friction in the labor marketplace and
exactly equal negotiating strength between employers and labor with zero
collusion between employers, zero collusion between workers.

Now look at the S&P500 level over that time. Could that frankly stunning
increase, GFC and all, have been less if there was a bidding war to get the
best talent in labor hiring? Is all labor completely fungible?

Then we compare the salaries of senior management of S&P500 companies, who are
also labor. No shortage of labor supply there at those salary levels - you, me
everyone would have a go for a year at a salary of $X million. CEO salaries
have not stagnated. Compare to demand for really awesome programmers which has
outstripped supply by massive amounts and all the big companies desperately
want to import people to meet some of that supply from overseas. But we don't
see the bidding war with salaries going up to even $500k there.

Econ 101 is notice what your assumptions are in your model and think through
all of them when applying that model. The assumptions of perfect competition
in the labor market are obviously bogus and we need to think harder about what
is going on, why and what a good outcome is (about which I'm saying nothing at
all here) and how to get to that good outcome than: "The model says X so by
definition there's no problem."

------
omarforgotpwd
AI will allow a single worker to do work that previously would have required
hundreds or thousands or workers, hence increasing the value of each worker
and their salary.

Jobs will disappear in many places and appear in others because the world will
be completely different.

~~~
toomanybeersies
> and their salary

Computers have made office workers an order of magnitude more productive than
they were 60 years ago. Their salary hasn't gone up proportionately.

~~~
jdross
If we're speaking literally, yes it has. Average salary in US 1957 was just
under $5,000.

If you're adjusting for inflation, it's hard to quantify our quality of life
difference. We have comforts and luxuries that were hardly conceivable 60
years ago, and they're well distributed.

In real terms worldwide, GDP per capita in current USD went from $445 in 1960
to $10,000 today, a 20x increase.

So I dispute your point, except in inflation-adjusted USD in the USA for the
average worker (and where I still don't think you can quantify).

~~~
nylonstrung
>We have comforts and luxuries that were hardly conceivable 60 years ago, and
they're well distributed

The avg amount of hours worked has also gone up considerably in that time, as
has the level of education and human capital. If you control for both of those
we indisputably get paid less per hour, while at the same time education and
healthcare have gotten more expensive.

Not to mention that US poverty rate has not declined at all in the last 25
years, a period of exponential technological progression.

~~~
tankenmate
Housing costs in a large percentage of cities has also risen sharply as a
percentage of take home pay.

------
codecamper
More like it destroys more white collar jobs & that is scary for economists
that actually are part of white collar America.

(technology has been destroying blue collar jobs for a while now)

~~~
cm2187
Industrialisation has been destroying blue collar jobs. Computerization has
been destroying white collar jobs for a while. You don't need an army of
accountants to manage your books. All you need is an SAP-like system and a
small team of experts. You don't need hundreds of engineers doing industrial
design all day, you just need a few good guys and a CATIA-like system.

~~~
cm2187
In fact a few years ago I read the memoir of a former officer in the french
secret services (DGSE). He explained at length how a large part of the job of
the DGSE was to accumulate mundane information about everyone, what article
who published where, who is close to who, who thinks what, what rumor X says
he heard from Y on Z. Over many years of painful accumulation of data through
various sources, and with a critical understanding of the reliability of each
source, the DGSE built this massive file on all potential persons of interest,
which is crucial for the day they need it.

Now 90% of that is available in free access on linkedin, facebook and gmail...

------
AnimalMuppet
Of course it does. That's kind of the point of technology.

Take farm equipment, for example. One combine replaces hundreds of people with
sickles. All those people can't find jobs in the combine factory, either.

So what happened? Mass unemployment? No, those people got jobs making
automobiles and refrigerators and washing machines and ten thousand other
things. The only reason society could do that is because they weren't wasting
all those people working on farms.

For a society, jobs cost people. The society can only have the level of
material culture it can create with the people it has to spend. If in some
area, we can get by with fewer people, that's progress. We can now spend those
people on something else, and our society will be richer for it.

That's the high-level view. In the short term, however, if we can't figure out
what to spend those people on, it can get bumpy...

~~~
SomeStupidPoint
There's a basic, and I think unfounded, assumption we'll find new jobs for
people.

Look at horses: thousands of years of utility, now essentially decorations and
luxury items. Their population virtually gone in 100 years.

No one has explained to me why that won't happen to humans except "it hasn't
happened yet" and "humans aren't horses (duh!)", neither of which really
addresses the issue.

~~~
AnimalMuppet
I'm not sure the population of horses has declined all that much in the last
100 years. They've gone from tools to pets, but there's still a lot of them...

~~~
SomeStupidPoint
Horse population in the US is half of what it was in 1920, while US population
is three times what it was.

So per capita, there's 1/6th the horses of 100 years ago.

------
Animats
This is liked to Slashdot. At least link to the real source.[1]

A poll of economists probably isn't that helpful here. Crunching on data from
unemployment offices might be more tied to reality.

[1]
[http://www.igmchicago.org/surveys/robots](http://www.igmchicago.org/surveys/robots)

~~~
dang
Normally we would, but that link doesn't say much. Is there a better article
to link to?

Note that all of this is from 2014, also.

------
harry8
Nah this is cool, man. We just keep convincing big companies and government to
hire Accenture, SAP, Oracle consulting, IBM Global Services, Computer
Associates, McKinsey, BCG, etc. etc.

They will happily destroy any gains in labor efficiency by hiring hundreds of
people to sit in a room hacking enterprise strength (ie non-functioning) stuff
to justify billion dollar fees.

It's scary how good your tech has to be to succeed in startup land and yet
just how awful the tech is that people deal with at work on a day to day
basis.

Anonymous has hacked big co, how to bring them to their knnees?!? "Install
sharepoint and let the consultants bleed them dry."

------
basicplus2
Take this idea to its ultimate end point and their are no jobs.

Its the Super Rich that have to change their viewpoint as there ultimately has
to be a new way to distribute wealth.

Everyone is entitled to a wage without work, and the Rich and Powerful must
redistribute to all others is there will be anarchy.

A slow but sure increase in a basic income is the only peaceful pathway to
that new future.

------
m__
Of course it's the new technology that causes this and not economists running
monetary experiments, that keeps wages stagnant. (who would expect the
purchasing power of money to drop when increasing the money supply!?)

For the past thousands of years we've seen incredible productivity gains
thanks to technology (the wheel, the loom, the steam engine!), and purchasing
power always kept increasing across the population.

On the other hand, we've been running this kind of monetary intervention for a
very short while, at an accelerating pace, but _no way_ this is causing an
increasing pay disparity.

This time it _must_ be the AI.

~~~
cm2187
I think globalisation (as in outsourcing to cheaper countries) had a major
role. It put out of a job low skilled workers in the US, and made (part) of
the cost of living much cheaper to those with a job (all the stuff imported
from China).

Money printing and the over accumulation of debt I think had less of an
effect. It had inflationary effects on upper middle class activities (housing
in big cities, college tuitions, etc), but I believe the bulk of the effects
is yet to come: a period of high inflation that can have severe effects on our
way of life.

AI's doom day scenario needs to take a ticket and wait in the queue...

------
VLM
People confuse "the economy" with certain popular commodities, such as
physical paper cash or the concept of the dollar.

In practice extreme inequality of commodities remove those commodities from
the general purpose commodity market. Do you buy food with baseball cards? Do
you pay the rent with beanie babies? Is your 401K in collectible Elvis plates?

Or lets look at it from top down, instead. Currently the marketplace for fine
art is irrelevant to the general population. Lets say a Picasso sells for
$100M in a trade between two billionaires. Frankly no one on the planet cares.
Picasso's are no longer an economically relevant commodity currency. Who in
America owns more than $100M of confederate money? Some coin collectors might
know, but its not worth as much as you'd think.

This is where the dollar, or perhaps currency as a concept, is inevitably
heading. Eventually someone in America will collect all of what we call money
in 2017, one guy will have all the money, and frankly it won't matter because
we'll be living day to day trading HN Karma or whuffie or bitcoins or ... The
point I'm making is hyperconcentration of wealth doesn't mean the death of the
economy it means the death of that form of wealth.

Is collectible Dale Earnhardt memorabilia still wealth? And if it died as
wealth does it matter to you today (assuming you weren't speculating in that
market?)

~~~
nickjarboe
The key is debt. If your debt is in US dollars and you are forced to pay in US
dollars, then you need to have US dollars. If you don't have them, you have to
trade what you have (labor, land, beanie babies) with someone who has US
dollars and want what you have. Hyperconcentrate the dollars, get most people
in debt, and maintain the power to collect debts. This will make the economy
not work well for most people.

Student loans, house loans, car loans, credit cards. Here we are.

------
Arwill
I'm wondering if/when will signs of something like the Butlerian Jihad
[https://en.wikipedia.org/wiki/Butlerian_Jihad](https://en.wikipedia.org/wiki/Butlerian_Jihad)
show.

In Frank Herbert's Dune books, the objection of humanity against "thinking
machines" was not that the machines took jobs, but that intelligent machines
shaped humanity too much. And signs of that can certainly be seen today.
Business models and customer experiences are built around solutions that are
easy to implement with computers. As AI gets used more, and AI will do the
jobs of humans, human experiences will be shaped by AI. There will be a point
where lawmakers will declare on certain things "no you can't do that with
computers, you have to do it yourself".

My guess is that new laws will be made against specific uses of computers and
AI. And that the issue of jobs will be regulated in those laws.

For example this recent law looks like something fitting in that category:
[http://ew.com/article/2016/12/16/obama-law-ticket-
bots/](http://ew.com/article/2016/12/16/obama-law-ticket-bots/)

------
randcraw
Let's illustrate this with a graph. Let's call it the Laugher Curve, and
borrow the inverted U from the much loved Laffer curve. But here, the Y axis
is The Value of Human Life, and and the X axis is The Value of Technology.

To the left of the curve's peak, as the value of technology rises along X, the
value of humans also rises along Y. Clearly technology is augmenting human
labor and increasing the value of human workers.

Further to the right the Laugher Peak is approached, and the rise in human
value slows because for some jobs, augmentation has turned to automation.
Machines begin to automate more tasks more than they augment. Ergo, when the
number of automated tasks rises sufficiently, machine replaces man.

Then as displaced humans seek new jobs, they find themselves taking positions
of lesser value because they lack the skills or ability needed to qualify for
those remaining jobs of equal value due to those jobs' increasing complexity,
which was caused by their rising tech augmentation. What many humans do best,
now a machine can do cheaper, and the retraining of those humans for equally
valuable jobs has become unprofitable.

Further to the right, human augmentation by tech fades and automation is in
full swing -- replacing those humans with marginally greater and lesser
skills. Finally when we reach the right edge of the curve, all humans have
been made redundant by tech; they're unemployed. At last, the net present
value of mankind falls to zero.

[It's called the Laugher Curve because it's believed the original Laffer Curve
was never about taxes. It was just a pretext to encourage those folks who
valued tech more than people. It also cleverly refers to the oxymoronic
outcome of a temporal mobius loop, in which the final laugh was _on_ those who
could laugh, _by_ those who couldn't.]

------
huuuuza
I don't believe in an efficient market response when it comes to improved
accuracy of models and ultimately AI. More jobs will be destroyed before they
are replaced. The volatility that results will decimate wages one industry at
a time (assuming applications are gradual). I would be curious to see % of
population employed over the periods where productivity spiked.

------
nickgrosvenor
Generally, the way it works is like this, a new technology comes around and
every one in that generation that had that career is out of a job in that
industry.

So a whole generation loses a job. Most of them don't get new jobs.

Their kids learn new vocations.

[https://en.wikipedia.org/wiki/Power-
loom_riots](https://en.wikipedia.org/wiki/Power-loom_riots)

Happened in the textile industry. In New England, Portuguese immigrants lost
their jobs building cloths to more efficient machines and outsourcing, their
kids became lawyers and doctors.

This will most likely happen in today's computerized automation wave.

One generation gets screwed but their children adapt to new opportunities.

~~~
afastow
Just because it worked out in the past doesn't mean it will continue to work
out in the future. There is no fundamental reason that pattern is guaranteed
to continue and some evidence exists already that this time really is
different.

------
rukittenme
I don't agree. Whats better than a fictitious human-like AI of tomorrow? A
literal human slave 200 years ago. The US South had millions. What did the
free people do? Work of course.

You can point to the "Poor White" as an example of what AI could create
tomorrow but the "Poor White" existed well before and after slavery was
instituted.

The solution to poverty is always the same. More education and more
infrastructure. AI should free up enough resources to help make those two
goals much more attainable.

------
jfaucett
When will people realize that increased productivity is what makes society
better to live in and not jobs. If all you needed were jobs then every country
in the world would have no excuse for low living standards - they'd just need
to get people a job doing anything, picking crops, whatever. [1]

1\.
[https://en.wikipedia.org/wiki/Productivity#National_producti...](https://en.wikipedia.org/wiki/Productivity#National_productivity)

~~~
afastow
Increased productivity isn't making society better to live in for people who
don't have jobs.

~~~
jfaucett
Yes it does. Increased productivity means more tax revenue for government
programs, cheaper consumer products and improvement in living standards
globally across the population. Its like giving your entire economy an +offset
which shifts your distribution in a positive direction.

------
oregontechninja
This is the point. Make computers do work, then sit back and drink a mojito (
or your drink of choice ). Get a new hobby if you want to work.

~~~
visarga
Who will make sure you get your fair share of the automation profits?

~~~
VLM
As a controversial idea intended to provoke thought and not knee jerk
political reactions, consider that in human history, much as we are in a
bubble of fossil fuel burning, we are in a bubble of equality. If in the
infinite oscillation of all human activity, is there any reason to exclude the
past being the future? Is a future stone age impossible because we have run
out of stone?

A common theme in ancient history was omnipotent leader getting pissed off at
the sea (for sinking a fleet, or just because he's a jerk, it don't matter
why) so he walks out in the sea and whips it or orders his army to slash at
the sea. No matter how much you might dislike the idea of the end of the
equality bubble, disliking it really really hard is about as effective at
preventing the future as whipping the sea is at teaching hurricanes not to
vaporize naval fleets.

Hey those blue collar jobs are going away, best get used to it, learn
something new. Hey that human equality thing is going away, best get used to
it, learn something new.

Even analogies don't work. You can say we learned the technologies of freedom
and equality and they only increase over time because... well because of luck
so far. Just like we learned the technology of burning coal or slavery, we
learned it and it can only increase over time because ... well it did out of
luck until it stopped. One's gone, the other's starting to go away, maybe
everything in this paragraph is over, eventually.

I don't like it, isn't a valid rebuttal. Personally I don't like it, but I'm
willing to devils advocate it a bit and its one of those things where if your
mind is open and not dogmatically shut you can't discount the highly likely
(but not 100%) probability.

You can tell mother nature "we must have a solution meeting my criteria A B
and C" and if those are unsolvable, she is quite unconstrained in actual
practice.

~~~
Animats
_A common theme in ancient history was omnipotent leader getting pissed off at
the sea (for sinking a fleet, or just because he 's a jerk, it don't matter
why) so he walks out in the sea and whips it or orders his army to slash at
the sea._

You have the King Canute story all
wrong.[[https://en.wikipedia.org/wiki/King_Canute_and_the_waves](https://en.wikipedia.org/wiki/King_Canute_and_the_waves)]

~~~
VLM
Its a common cross cultural snark about obnoxious authoritarian leaders,
personally I was thinking of good old Xerxes but it just keeps appearing
everywhere ...

------
anigbrowl
This trend has only accelerated, will only continue to do so, and will
inexorably force a rearrangement of the productive forces in society.

------
zardo
(2014)

~~~
dang
Yes. Added.

------
analyticbastard
Economists always fail in their predictions, but are very good to explain
things in retrospective.

------
hmate9
AI would not directly create new jobs, but rather allow people to take up
other jobs.

~~~
tyoverby
> allow people to take up other jobs

What jobs are these? Why aren't they "taking up" these other jobs without the
influence of AI and automation?

Maybe these new jobs that they are "allowed to take up" are worse than their
jobs that are being done by machine intelligence.

------
vorotato
Isn't that the point?

------
FractalNerve
Summing up the perspectives on AI and Automation in 13 years in just 2:39:18
of qualitatively worthwile (my opinion) mealpieces of TED-Talks in the
playlist below. If you find an equaly rich source of views and shapes on the
same topic please comment below, I'd love to read and learn more about it.

Getting back to business: I am to blame, because I'll automate away at least
40 Jobs until June 2017 in just one site (at the begining) of a large
multinational company using Deep-Leearning. Kind of feel bad, but I'm not the
evil and I certainly don't destroy jobs. Whoever is using the word _destroy_
in topics related to AI is strongly trying to polarize. I really enjoy
critical thinking, arguments that make you think, but most often these kinds
of discussions sadly end in fear-mongering or finger-pointing akin low quality
results. That's with the people who have the strongest opinion about these
topics, those are also usually the only ones who bring up these topics, so
that's a dilema.

How do you argue against and with people who are mad about you, beceause they
think you _destroy_ jobs?

I know it's not universally true, but try to replace the word destroy with
augment: _Economists Say Newest AI Technology Augments More Jobs Than It
Creates (2014)_

And the whole thing becomes a new meaning. Now take a look back at how the
common consensus about AI and Automation and the accompanied fears have
changed and formed over the years using following TED playlist, I've compiled
for your pleasure.

• David Autor: Will automation take away all our jobs? [1]

 _TEDxCambridge · 18:37 · Filmed Sep 2016_

• Olivier Scalabre: The next manufacturing revolution is here [2]

 _TED@BCG Paris · 12:26 · Filmed May 2016_

• Anthony Goldbloom: The jobs we'll lose to machines — and the ones we won't
[3]

 _TED2016 · 4:36 · Filmed Feb 2016_

• Jeremy Howard: The wonderful and terrifying implications of computers that
can learn [4]

 _TEDxBrussels · 19:45 · Filmed Dec 2014_

• Andrew McAfee: What will future jobs look like? [5]

 _TED2013 · 14:15 · Filmed Feb 2013_

• Erik Brynjolfsson: The key to growth? Race with the machines [6]

 _TED2013 · 11:56 · Filmed Feb 2013_

• Wingham Rowan: A new kind of job market [7]

 _TEDSalon London Fall 2012 · 12:20 · Filmed Nov 2012_

• Andrew McAfee: Are droids taking our jobs? [8]

 _TEDxBoston 2012 · 14:07 · Filmed Jun 2012_

• Mick Mountz: What happens inside those massive warehouses? [9]

 _TEDxBoston 2011 · 12:06 · Filmed Jun 2011_

• Tim Jackson: An economic reality check [10]

 _TEDGlobal 2010 · 20:23 · Filmed Jul 2010_

• Rodney Brooks: Robots will invade our lives [11]

 _TED2003 · 18:47 · Filmed Feb 2003_

— [1]
[https://www.ted.com/talks/david_autor_why_are_there_still_so...](https://www.ted.com/talks/david_autor_why_are_there_still_so_many_jobs)

— [2]
[http://www.ted.com/talks/olivier_scalabre_the_next_manufactu...](http://www.ted.com/talks/olivier_scalabre_the_next_manufacturing_revolution_is_here)

— [3]
[https://www.ted.com/talks/anthony_goldbloom_the_jobs_we_ll_l...](https://www.ted.com/talks/anthony_goldbloom_the_jobs_we_ll_lose_to_machines_and_the_ones_we_won_t)

— [4]
[https://www.ted.com/talks/jeremy_howard_the_wonderful_and_te...](https://www.ted.com/talks/jeremy_howard_the_wonderful_and_terrifying_implications_of_computers_that_can_learn)

— [5]
[https://www.ted.com/talks/andrew_mcafee_what_will_future_job...](https://www.ted.com/talks/andrew_mcafee_what_will_future_jobs_look_like)

— [6]
[https://www.ted.com/talks/erik_brynjolfsson_the_key_to_growt...](https://www.ted.com/talks/erik_brynjolfsson_the_key_to_growth_race_em_with_em_the_machines)

— [7]
[https://www.ted.com/talks/wingham_rowan_a_new_kind_of_job_ma...](https://www.ted.com/talks/wingham_rowan_a_new_kind_of_job_market)

— [8]
[https://www.ted.com/talks/andrew_mcafee_are_droids_taking_ou...](https://www.ted.com/talks/andrew_mcafee_are_droids_taking_our_jobs)

— [9]
[https://www.ted.com/talks/mick_mountz_the_hidden_world_of_bo...](https://www.ted.com/talks/mick_mountz_the_hidden_world_of_box_packing)

— [10]
[http://www.ted.com/talks/tim_jackson_s_economic_reality_chec...](http://www.ted.com/talks/tim_jackson_s_economic_reality_check)

— [11]
[https://www.ted.com/talks/rodney_brooks_on_robots](https://www.ted.com/talks/rodney_brooks_on_robots)

