If you look at the economy over the last several years, you get two very conflicting stories. The first is that the stock market and GDP growth have been positive thanks to companies being profitable and increasing worker productivity. The second is that there has been a distinct lack of job creation. According to Bloomberg View, there are 10 million fewer jobs than there should be.
According to an economists at MIT, this is a sign that something has fundamentally shifted in the economy. Historically, productivity and job growth have gone hand-in-hand. While many fear robots taking away manufacturing jobs from factory workers, the researchers note that this is a change that took place back in the 1980s, when industrial machines were created that could easily weld and paints specific patterns on cars and goods.
Many of us take for granted that technology is the brightest spot in the economy, where most of the innovation and job creation occurs. But if you look more broadly at the impact of technology across every industry, it doesn’t look so great. Technology makes businesses more efficient, often by eliminating the need for repetitive tasks and the workers who do them. We are not replacing those jobs with enough new, higher-skilled ones to make up for the loss. So what we are seeing in the U.S. over the past decade is productivity growth without the job growth that usually comes with it. Traditionally, productivity growth and job growth went hand in hand, but that is no longer the case. Annual productivity growth in the U.S. between 2000 and 2009 was 2.5%, a faster rate than at any time since the 1960s. Yet the last decade saw the total number of jobs decline by 1.1 percent.
Again and again technology has disrupted old work patterns and produced more, not less, work — usually at higher wages in more pleasant surroundings. Today, workers in factories are being replaced by robots and software, more broadly, is automating many jobs that people used to do. Companies benefit because they can operate leaner and make more profits, but what about the people? For the first time ever, the Luddite fear that machines will replace people seems to be coming true.
The real problem facing workers today is computer software that can handle the work typically performed in white-collar jobs. From clerical work to handling finances, software can perform many tasks faster and with fewer errors. With developments like big data and analytics, few tasks will require human input in the years ahead.
This means that two types of jobs will do well in the future: those that benefit from computer assistance, like programming, engineering, and design, and low-skill jobs that require the basic problem-solving abilities that humans still have over machines, like janitorial and restaurant services.