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Productivity, job growth de-coupled

Published: Saturday, April 13 2013 12:00 a.m. MDT

The advance in digital technology has increased our nation's productivity where machines and robots are replacing humans.

Brian Nicholson, Deseret News

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The link between rising productivity, growing jobs and higher living standards has de-coupled, according to MIT Center for Digital Business professors Erik Brynjolfsson and Andrew McAfee's new book, "Race Against The Machine."

The authors write there used to be a connection between productivity, the economy and job growth. That relationship has de-coupled — broken down. They identified three chapters in the U. S. economy. The 1950s were the happy times when the economy, productivity, GDP, job growth, and living standard were all up. It was a time when a rising tide lifted all boats. Then around the 1980s, productivity kept going up, while job growth and the standard of living went up more slowly. Along came the 2000s when productivity continued to rise, but job growth and the median income started to decline.

Fifteen years ago, we were saying the good-paying jobs were going off-shore because of globalization, that the problem with our economy was stagnation, and there was a need for more business growth. Now, the authors offer different answers as to why the median income has stopped rising in the U.S., why the share of the population that is working is declining so quickly, and why our economy and society are becoming more unequal.

Brynjolfsson and McAfee offer another reason for the de-coupling of jobs from productivity and the standard of living in our economy. They point out that while productivity has gone up, job growth is now flat and the exponential growth of technology is a major factor for the de-coupling. The advance in digital technology has increased our nation's productivity where machines and robots are replacing humans. It forces a change in our way of thinking that there is a connection between economic growth automatically leading to an increase in jobs, which is no longer the case. Now, they say we have a larger economic pie, but with smaller pieces to be distributed. History has shown that as technology develops, industries and jobs are destroyed and new ones are created. Today's thriving companies are more productive and doing so with fewer people.

Many of today's jobs are being done by machines and computers, which raises the question: what jobs will be left for humans? According to the authors, those jobs that are complementary to computers such as data scientists and computer programmers will be in demand, as well as those jobs that require empathy, relationships and sensory perception.

Humans and our institutions are always lagging behind technology, including our economy, schools, and public policies. Our leaders continue to believe the old idea that a rising tide lifts all boats, so they continue to work toward more economic development without considering how we can restructure our institutions. Our schools continue to teach skills for the industrial economy, rather than the digital one that requires imagination, creativity and innovation; things machines can't do. We've been told for years, and it seems even truer now, that today's schoolchildren will be doing jobs that are yet to be invented. What if we had our leaders hold summits on job creation?

While technology has improved lives all around the world, the authors have raised the hard questions for our society in order to continue to benefit from technology: How are we going to distribute the benefits of this abundant economy; and the harder question, what is a meaningful life going to look like? Where will dignity and self-worth come from in the 21st century if not from a job?

A Utah native, John Florez has been on the staff of Sen. Orrin Hatch, served as former Utah Industrial Commissioner and filled White House appointments, including Deputy Assistant Secretary of Labor and Commission on Hispanic Education. Email him at jdflorez@comcast.net.

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