There is no shortage of think tank and consulting “studies” on the impact of automation on low-skilled workers. For the most part, they concede that the effect will be disruptive in the short term but assume that, over time, the new technologies will create as many jobs they destroy.

Typical of the genre is the World Economic Forum’s The Future of Jobs Report 2018 which predicts the loss of 75 million jobs by 2022, and the creation of 133 million jobs over the same period, for a net increase of 58 million jobs.

But, suppose the optimists are wrong? What will be the consequences for millions of workers and the communities in which they live?

Even the WEF concedes that more than half (52%) of all employees will require “significant” training to either upgrade their skills or acquire new skills altogether. Of these, over a third (35%) will require an additional six months of training, nine percent will require training lasting six to 12 months, and ten percent will need more than a year to upgrade their skill set. The bad news:

Nearly one in four companies said they’re undecided or unlikely to pursue the retraining of existing employees. Two-thirds of employers expect their workers to either adapt or pick-up skills as their jobs evolve. Anywhere from half to two-thirds of companies said they’ll just resort to hiring contractors, temporary staff, and freelancers to address any deficiencies in work skill.

In its new report, Automation and a Changing Economy, the Aspen Institute takes

issue with the assumption that the American economy will naturally adjust as automated tools are introduced at an accelerated pace over the coming two and three decades. According to the report:

Many workers will see their jobs change, as tomorrow's jobs will require different skills. Others will lose their jobs, suffering significant economic and social hardship as they cope not only with income loss but also with the loss of purpose and identity that work provides. More broadly, without the right set of solutions, automation can increase income inequality, exacerbating current economic, political, geographic, and social divides.

The Aspen report notes that past worker disruptions have been mitigated by policymakers’ investments in education and worker training, and expansions of the social safety net—combined with a strong social contract between employers and workers that provided access to critical workplace benefits and protections.

But, the authors note that disinvestment in public and private sector training, a weakened public safety net, and reduced access to workplace benefits and protections have contributed to the slow and painful economic adjustment many workers and communities have experienced in recent decades.

Ominously, the report warns that workers who lost their jobs in the wave of manufacturing layoffs in the early 1980s, were still earning 15%–20% less in their new work 20 years later:

Today’s workers are especially vulnerable to the impacts of automation. Financial insecurity, an aging workforce, and falling geographic mobility, make it difficult for many to retrain and transition to new occupations following displacement… there are several reasons to believe that certain converging technologies—particularly artificial intelligence, advanced robotics, machine learning, and expanding computing power and data storage—could lead to increased automation disruption.

Call for action

The paper identifies 22 potential solutions to address four overarching challenges:

Encourage employers to lead a human-centric approach to automation - Automation changes workforce skill needs, yet employer investment in workforce development has declined. Enable workers to access skills training, good jobs, and new economic opportunities - The labor market is constantly evolving, with automation contributing to changing jobs and skill needs, but supports for worker training and adult education are limited. Help people and communities recover from displacements - workers displaced by automation face significant economic headwinds. Understand the impact of automation on the workforce - policymakers, communities, workers, businesses, educators, and other stakeholders struggle to understand how automation is changing the economy because federal, state and local data on the impact of technology on work is inadequate.

The specific proposals range from a worker training tax credit to support for community colleges to raising worker income and promoting job quality through wage subsidies and the minimum wage and improving efforts to support local economies and promoting regional competitiveness.

My take

Businesses and government need to begin now to prepare the labor force for a future wave of automation that seems likely to destroy jobs and vex communities across the country and around the world. The current American jobs surge and record unemployment have obscured what is certain to be one of the most important issues of the next few decades.

In my view, the most important guidance in the report is a call for a renewal of pre-1980s policies that established an effective social contract between workers and their companies, complete with benefits, protections and training.

The financial insecurity wrought by the death of the social contract between corporations and people which allowed workers up to around the 1970s to anticipate a predictable future for themselves and their children has led to a sense of victimhood and outrage by workers displaced by automation and new technologies and the subsequent exploitation of those fears by unprincipled authoritarian political leaders who seek and retain power through permanent political turbulence.

This is not good for anyone.