Earlier this week, a team lead by the Executive Office of the President released a report examining automation’s potential impact on the economy. The findings were far from reassuring, especially for low-skilled workers.
The paper notes that artificial intelligence technologies could lead to economic benefits, but “[t]hose economic benefits, however, will not necessarily be evenly distributed across society.”
The White House said that other researchers have projected potential job losses in the next 20 years at anywhere from 9 percent to 47 percent, and that lower-skilled and lower-paid jobs are likely to be most at risk:
Research consistently finds that the jobs that are threatened by automation are highly concentrated among lower-paid, lower-skilled, and less-educated workers. This means that automation will continue to put downward pressure on demand for this group, putting downward pressure on wages and upward pressure on inequality. In the longer-run, there may be different or larger effects. One possibility is superstar-biased technological change, where the benefits of technology accrue to an even smaller portion of society than just highly-skilled workers. The winner-take-most nature of information technology markets means that only a few may come to dominate markets. If labor productivity increases do not translate into wage increases, then the large economic gains brought about by AI could accrue to a select few. Instead of broadly shared prosperity for workers and consumers, this might push towards reduced competition and increased wealth inequality.
Education vs. Universal Basic Income
To help society reap the benefits of automation, without creating massive income inequality and unemployment, the White House urges three policy-response strategies:
- Invest in AI technologies, prioritizing diversity and inclusion in STEM fields that support these technologies.
- Educate the American workforce for the changing labor market.
- Support workers by providing a social safety net in the form of unemployment and assistance programs, as well as job creation strategies.
One approach that the White House does not advocate is the creation of Universal Basic Income, or guaranteed cash for all Americans. In recent years, UBI has gained popularity as a potential alternative to traditional social safety nets … and employment.
“Pushed by conservative thinkers like Milton Friedman and Silicon Valley investment firms like Y Combinator, such a scheme might be cheaper and easier to administer than more complex forms of social welfare that involve vetting people, and it could help people get by while going to school or working a significantly lower paying job than they had before the rise of automation,” explains Klint Finley at Wired. “But Obama’s White House prefers to focus on education and job training rather than guaranteed income.”
The paper includes an excerpt from a speech by CEA Chair Jason Furman, in which he says:
We should not advance a policy that is premised on giving up on the possibility of workers’ remaining employed. Instead, our goal should be first and foremost to foster the skills, training, job search assistance, and other labor market institutions to make sure people can get into jobs, which would more directly address the unemployment issues raised by AI than would UBI.
Tell Us What You Think
Which approach do you favor for dealing with the impact of AI? We want to hear from you. Tell us your thoughts in the comments or join the conversation on Twitter.