Category Archives: Automation & Artificial Intelligence

No Rage Against the Machines: Threat of Automation Does Not Change Policy Preferences

Source: Baobao Zhang, MIT Political Science Department Research Paper No. 2019-25, September 16, 2019

From the abstract:
Labor-saving technology has already decreased employment opportunities for middle-skill workers. Experts anticipate that advances in AI and robotics will cause even more significant disruptions in the labor market over the next two decades. This paper presents three experimental studies that investigate how this profound economic change could affect mass politics. Recent observational studies suggest that workers’ exposure to automation risk predicts their support not only for redistribution but also for right-wing populist policies and candidates. Other observational studies, including my own, find that workers underestimate the impact of automation on their job security. Misdirected blame towards immigrants and workers in foreign countries, rather than concerns about workplace automation, could be driving support for right-wing populism. To correct American workers’ beliefs about the threats to their jobs, I conducted three survey experiments in which I informed workers about the existent and future impact of workplace automation. While these informational treatments convinced workers that automation threatens American jobs, they failed to change respondents’ preferences on welfare, immigration, and trade policies. My research finds that raising awareness about workplace automation did not decrease opposition to globalization or increase support for policies that will prepare workers for future technological disruptions.

How Robots Are Beginning to Affect Workers and Their Wages

Source: William M. Rodgers III and Richard Freeman, The Century Foundation, October 17, 2019

From the summary:

Much has been written about the rise of robots and the potential impacts of automation on the economy. Yet most analysis tends to be prospective in nature, and estimates of future impacts on employment vary widely, with some studies predicting that as many as 50 percent of all workers are at risk of losing their jobs to automation. Even less is understood about the actual impacts of robots on jobs, wages, and workers today. While more recent studies have begun to measure these effects, the results here, too, are mixed.

This report analyzes the impact of robots in the years following the Great Recession, from 2009 to 2017—a period of significant, steady job growth and economic recovery, as well as one in which the use of robots in the U.S. workplace more than doubled. The report’s findings, summarized below, offer new insights that can help inform ongoing debates about the future of work and the impact of automation.

The first takeaway is that robots are, indeed, coming—but there is little evidence (yet) that robotic growth is leading to widespread job displacement, as some have predicted. That said, there are winners and losers with automation. While robots may have negligible effects on national employment as a whole, certain industries and regions are more impacted by robotic growth, and particular groups of workers disproportionately suffer the negative effects of this growth. It is also the case that job losses from robotization may have little impact on total employment, as displaced workers find other jobs (especially in a strong economy with low unemployment), even if at lower pay. Lastly, we find that the economic boom of the past decade has effectively “masked” some of the impacts that robots have had on workers. It’s not that robots weren’t displacing jobs—it’s that the overall economic expansion was large enough to offset some of these job losses. ….

What You Should Know
• Estimates of the potential impacts of robots on the American economy vary widely, with some studies predicting that as many as 50 percent of all workers are at risk of losing their jobs to automation in the coming decades.
• This report looks at what is happening in practice, estimating the impact of rising automation in the wake of the Great Recession, from 2009 to 2017, a period in which the use of industrial robots in the United States has more than doubled.
• The report shows that, on the national level overall, robots have not (yet) brought the dire effects that many have warned. However, the impact of robots varies across groups of workers, regions, and industries.
• There have been clear losers with increased automation: namely, younger, less-educated manufacturing workers in the Midwest (and younger, minority workers in these industries in particular). These industries not only have the highest number of robots in use, but are also experiencing the fastest growth in robot adoption.
• Importantly, some of the adverse impacts on the wages and jobs of Midwest manufacturing workers have been “masked” by the economic recovery of the past decade. That is, had the recovery not occurred, we’d be witnessing even more young workers being displaced from their jobs.

Déjà Vu AI: What Can We Learn from the Digital Revolution?

Source: Laura Schultz, Nelson A. Rockefeller Institute of Government, August 26, 2019

At the dawn of the digital revolution, economists questioned whether or not we were entering the next industrial revolution. They forecasted dramatic leaps in our personal productivity, automation of mundane tasks, changes in the workforce, globalization, and self-employment. These are many of the same predictions being made today as artificial intelligence lays on the horizon.

The future of work in black America

Source: Kelemwork Cook, Duwain Pinder, Shelley Stewart III, Amaka Uchegbu, Jason Wright, McKinsey October 2019

From the summary:
There is a well-documented, persistent, and growing racial wealth gap between African American families and white families in the United States. Studies indicate the median white family in the United States holds more than ten times the wealth of the median African American family.

Apart from its obvious negative impact on African American individuals, families, and communities, the racial wealth gap constrains the entire US economy. In a previous report, we projected that closing the racial wealth gap could net the US economy between $1.1 trillion and $1.5 trillion by 2028.

Despite this, the racial wealth gap threatens to grow as norms, standards, and opportunities in the current US workplace change and exacerbate existing income disparities. One critical disrupter will be the adoption of automation and other digital technologies by companies worldwide. According to estimates from the McKinsey Global Institute, companies have already invested between $20 billion and $30 billion in artificial intelligence technologies and applications. End users, businesses, and economies are hoping to significantly increase their productivity and capacity for innovation through using such technologies.

Related:
The economic impact of closing the racial wealth gap
Source: Nick Noel, Duwain Pinder, Shelley Stewart III, and Jason Wright, McKinsey, August 2019

From the summary:
The persistent racial wealth gap in the United States is a burden on black Americans as well as the overall economy. New research quantifies the impact of closing the gap and identifies key sources of this socioeconomic inequity.

The United States has spent the past century expanding its economic power, and it shows in American families’ wealth. Despite income stagnation outside the circle of high earners, median family wealth grew from $83,000 in 1992 to $97,000 in 2016 (in 2016 dollars).

Beyond the overall growth in top-line numbers, however, the growth in household wealth (defined as net worth—the net value of each family’s liquid and illiquid assets and debts) has not been inclusive. In wealth, black individuals, families, and communities tend to lag behind their white counterparts. Indeed, the median white family had more than ten times the wealth of the median black family in 2016 (Exhibit 1). In fact, the racial wealth gap between black and white families grew from about $100,000 in 1992 to $154,000 in 2016, in part because white families gained significantly more wealth (with the median increasing by $54,000), while median wealth for black families did not grow at all in real terms over that period…..

Robots to Cut 200,000 U.S. Bank Jobs in Next Decade, Study Says

Source: Alfred Liu, Bloomberg, October 1, 2019

Technological efficiencies will result in the biggest reduction in headcount across the U.S. banking industry in its history, with an estimated 200,000 job cuts over the next decade, Wells Fargo & Co. said in a report. The $150 billion annually that the country’s finance firms are spending on tech — more than any other industry — will lead to lower costs, with employee compensation accounting for half of all bank expenses, said Mike Mayo, a senior analyst at Wells Fargo Securities LLC. Back office, bank branch, call center and corporate employees are being cut by about a fifth to a third, with jobs related to tech, sales, advising and consulting less affected, according to the study…..

Related:
Tech forecast to destroy more than 200,000 US bank jobs
Source: Financial Times, October 2019
(subscription required)

US banks will cut more than 200,000 jobs in the next decade as robots and other technology bring about the “greatest transfer from labour to capital” the industry has seen, a report by analysts at Wells Fargo claims. …. Individual banks have predicted that machines could replace thousands of jobs, most notably Citigroup chief executive Mike Corbat, who said “tens of thousands” of call centre workers could be replaced, and former Deutsche Bank boss John Cryan who warned in 2017 that as many as half the bank’s 97,000-strong workforce could go. ….

AFL-CIO Commission on the Future of Work and Unions

Source: AFL-CIO Commission on the Future of Work and Unions, Report to the AFL-CIO General Board, September 2019

….We present this report with fresh optimism that working people can and will build a future of work that works for all of us. But getting the job done requires more than engaging with innovation in the workplace. We must innovate ourselves, strengthen our unions, organize new ones and bring more workers into our ranks. The stakes are enormous. A system that fails to provide a decent standard of living for its people will not stand. So if technology and public policy continue to be used to further concentrate economic power in the hands of the wealthy few, our system of government and our way of life are in grave danger. But it doesn’t have to be that way. The labor movement can be inclusive enough and strong enough to raise living standards across the economy and ensure good jobs for everyone who wants to work.

This report is our plan to make that happen…..

Artificial Intelligence, Discretion, and Bureaucracy

Source: Justin B. Bullock, The American Review of Public Administration, Volume 49 Issue 7, October 2019
(subscription required)

From the abstract:
This essay highlights the increasing use of artificial intelligence (AI) in governance and society and explores the relationship between AI, discretion, and bureaucracy. AI is an advanced information communication technology tool (ICT) that changes both the nature of human discretion within a bureaucracy and the structure of bureaucracies. To better understand this relationship, AI, discretion, and bureaucracy are explored in some detail. It is argued that discretion and decision-making are strongly influenced by intelligence, and that improvements in intelligence, such as those that can be found within the field of AI, can help improve the overall quality of administration. Furthermore, the characteristics, strengths, and weaknesses of both human discretion and AI are explored. Once these characteristics are laid out, a further exploration of the role AI may play in bureaucracies and bureaucratic structure is presented, followed by a specific focus on systems-level bureaucracies. In addition, it is argued that task distribution and task characteristics play a large role, along with the organizational and legal context, in whether a task favors human discretion or the use of AI. Complexity and uncertainty are presented as the major defining characteristics for categorizing tasks. Finally, a discussion is provided about the important cautions and concerns of utilizing AI in governance, in particular, with respect to existential risk and administrative evil.

Three Big Ideas for a Future of Less Work and a Three-Dimensional Alternative

Source: Cynthia Estlund, Law and Contemporary Problems, Vol. 82 no. 3, 2019

….At the same time, each of those three big ideas holds within it an essential component of a sound three dimensional response to the uncertain but real prospect of job losses. In lieu of UBI [universal basic income], we should expand universal social benefits—starting with health care and higher education—and income support for the working and non-working poor. In lieu of a federal job guarantee, we should ramp up public investments in infrastructure, social and community services, and early education, all of which would address unmet societal needs while creating decent jobs. And in lieu of (or at least before) reducing weekly hours of work across the board, we should expand access to paid leaves, holidays, and vacations, as well as voluntary part-time work and retirement security; we could thereby spread work and meet varied individual needs and preferences through days, weeks, months, and years of time off.

In combination, these three interventions—expanded universal social benefits and income support, public investments in physical and social infrastructure and the job creation those will entail, and wider access to paid leaves and respites from work—would advance core objectives of each of the three big ideas while muting their disadvantages. Together they would both cushion and offset automation-related job losses, while spreading the work that remains and maintaining or boosting incomes. This trio of policies could and should also be funded in a way that helps to redistribute income from the top to the bottom of an egregiously and increasingly lopsided income distribution.

…..In what follows, I will fill in the outlines of this argument. Part II will briefly set out some normative priors about the multiple ends we should be pursuing as we face a future of less work. A long Part III will take up each of the Three Big Ideas, briefly tracing their genealogy and identifying some strengths and weaknesses of each. Part IV will return to the core aspirations of the Three Big Ideas, and sketch a combination of the three – a three-dimensional strategy – that can preserve much of the good while avoiding much that is problematic in the more single-minded Three Big Ideas. ….

The Work of the Future: Shaping Technology and Institutions

Source: MIT Task Force on the Work of the Future, Fall 2019

….How can we move beyond unhelpful prognostications about the supposed end of work and toward insights that will enable policymakers, businesses, and people to better nav-igate the disruptions that are coming and underway? What lessons should we take from previous epochs of rapid technological change? How is it different this time? And how can we strengthen institutions, make investments, and forge policies to ensure that the labor market of the 21st century enables workers to contribute and succeed?

To help answer these questions, and to provide a framework for the Task Force’s efforts over the next year, this report examines several aspects of the interaction between work and technology. We begin in Section 1 by stating an underlying premise of our project: work is intrinsically valuable to individuals and to society as a whole, and we should seek to improve rather than eliminate it. The second section introduces the broader concerns that motivated the Task Force’s formation. Here we address a paradox: despite a decade of low unemployment and generally rising prosperity in the United States and industrialized countries, public discourse around the subject of technology and work is deeply pessimistic. We argue that this pessimism is neither misguided nor uninformed, but rather a reflection of a decades-long disconnect between rising productivity and stagnant incomes for the majority of workers…..

L&E Evolution Part III: Managing Employees in a Digital Age

Source: Lorene D. Park, Labor Law Journal, Vol. 70 no. 2, Summer 2019
(subscription required)

The expectation that business will be done electronically, the trend toward paperless records, and ongoing advances in technology have birthed so many legal issues that, for employers, compliance may seem impossible.

For example, much was made of the promise of using artificial intelligence to screen job applicants, but it emerged that AI can both learn and perpetuate human biases that may violate Title VII. And using online employment agreements also may result in litigation over whether an employee “clicked” on a screen to agree.

What follows is an overview of key issues that have emerged for employers, organized around the lifespan of an employment relationship. We’ll start with the hiring process, covering accessibility, screening methods, electronic agreements, and more. Then we’ll cover computer use policies, trade secrets, wiretapping and electronic privacy statutes, data breach notification, social media, NLRA protections, and other issues that arise during the employment relationship. We’ll wrap with a discussion on privacy, including surveillance of employees, as well as issues surrounding termination of employment.