The Myth of America’s “Unprecedented Technological Job Disruption”

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The Myth of America’s “Unprecedented Technological Job Disruption”

It has recently become an “article of faith” that workers in advanced industrial nations are experiencing unprecedented levels of labor-market disruption and insecurity. From taxi drivers being displaced by Uber, to lawyers losing their jobs to artificial intelligence-enabled legal-document review, to robotic automation putting blue-collar manufacturing workers on unemployment, popular opinion is that technology is driving a relentless wave of Schumpeterian “creative destruction,” and we are consequently witnessing an unprecedented level of labor market “churn.” One Silicon Valley pundit even predicts that technology will eliminate 80 to 90 percent of U.S. jobs in the next 10 to 15 years.

Yet, despite popular perceptions, an objective analysis of the data says that the U. S. labor market is not experiencing “unprecedented technological disruption.”  In fact, occupational churn in the United States is at a historic low.  And, as we’ll show, it is time to stop worrying and start accelerating productivity growth with more technological innovation.

Consider the facts.

The Information Technology and Innovation Foundation (or ITIF) has documented that the grim assessments of information technology’s impact on jobs are the products of faulty logic and erroneous empirical analysis, making them simply irrelevant to the current policy debate.  For example, techno-pessimists often assume that robots can do most human jobs, when in fact, they can’t. Or they assume that once a job is lost, there are no second-order job-creating effects from increased productivity and spending. But the techno-pessimists’ grim assessments also suffer from being a “misreading of history.“

When we carefully examine the last 165 years of American history, statistics show that the U.S. labor market is not currently experiencing particularly high levels of job churn, which is defined as new occupations being created while older occupations are destroyed. In fact, it’s the exact opposite: Levels of occupational churn in the United States—defined as the rates at which some occupations expand while others contract—are now at historic lows. The average level of churn in the last 20 years—a period including the dot-com crash, the financial crisis of 2007 to 2008, the subsequent Great Recession, and the emergence of new technologies that are purported to be more powerfully disruptive than anything in the past—has been just 38 percent of the average level from 1950 to 2000, and 42 percent of the average level from 1850 to 2000...

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