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Commentary: Job loss in the Age of Disruption

by on October 19, 2013 10:40 AM

Disruption is in the air: disruption in Congress, disruption in the workplace, disruption in the well-being of the middle class. History may well term this the Age of Disruption.

This need not be all bad.

Disruption is only a problem if it is poorly managed, or if forces beyond control devastate existing order. Take the Russian Revolution or the recent tsunamis in Asia. Nowadays, we tend to think of disruption as being uniquely in the province of technology — and it is this disruption that harbors the most future shock.

The most serious disruption now getting under way is the disappearance of jobs; not the replacement of old jobs, but the utter disappearance of jobs. Jobs that once were are going into the ether or, call it what you will, to the cloud. Gone for good.

For the first time since the Industrial Revolution was ushered in by the replacement of human and animal labor by shaft horsepower derived from a waterwheel or a steam engine, technology is subtracting jobs rather than adding them. This is a disruption that hurts.

From Oxford University comes one of the most disquieting studies on the future yet to appear. Two researchers, Carl Benedikt Frey and Michael A. Osborne, predict that 47 percent of American jobs are at risk in the coming years from computerization. Their conclusions are stupefying: Nearly half the jobs in the United States could disappear in a few short years. Worse, according to the Oxford University researchers, these jobs will affect the great middle reaches of employment, from the white-collar jobs down to unskilled workers.

The study “The Future of Employment: How Susceptible Are Jobs to Computerization?” should have every parent and every policy wonk asking: What should be done? What can we do to save half of the population from not being able to find a job at any level, of being driven to compete for minimum-wage employment?

Until now, each leap forward in technology and its corresponding increase in productivity has had two effects:

• The economic benefits have been shared with the workers. That has ended.

• New prosperity from automation always led to new demand for more goods and services. This may be ending. Depressed wages do not lead to new purchases.

In turn, this history has led to a pervasive economic myth that the relationship between automation — even automation using advanced computers — will always lead to more jobs and more prosperity.

Yet the market for labor is changing dramatically, and that lockstep has lasted pretty well since the first loom in England substituted shaft horsepower for human labor in the 18th century.

That happy union may be broken. The Oxford researchers, in a National Public Radio interview, suggested that the only safe jobs might be those that require a high degree of education and interpersonal skills like the law, teaching and management consulting.

My own daily reminder of the world of jobs that is changing is my Kindle. It reproves me. Its value is that I am never without a new book, and it is more portable than any but small pocket books. But I used to publish books and every time I open the electronic book, I think of the long chain of people who were involved in making a book years ago: typesetters, printers, binders, warehouse staff, book wholesalers and finally the clerks who took your money. All worthwhile jobs with dignity.

Books and bookstores are not worse hit than many other things, but they are suffering. When did you last speak to a person at your bank, airline, insurance company or utility?

A nation that does all of its business online may be efficient in the short term until online leads to the bread line.

Disruption is the new normal and we need to understand it.

New industries need to be sought. An example of a newish industry that has flourished in recent decades is tourism. A century ago, a few rich people traveled. Now tourism is the world’s largest employer.

Old remedies for new problems won’t do it. The jobs deficit won’t be fixed by what we seem to have on the table: lower corporate taxes and less unionism. Less general wealth is the wrong kind of disruption — and we are heading that way.

Llewellyn King is executive producer and host of "White House Chronicles" on PBS. His column is written for Hearst Newspapers.
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