rapid technological change has been destroying jobs faster than it is creating them,
contributing to the stagnation of median income and the growth of inequality in the
United States. And, they suspect, something similar is happening in other
technologically advanced countries.
As evidence, Brynjolfsson and McAfee point to a chart that only an economist could
love. In economics, productivity-the amount of economic value created for a given
unit of input, such as an hour of labour-is a crucial indicator of growth and wealth
creation. It is a measure of progress. On the chart Brynjolfsson likes ~o use, two
separate lines represent productivity and total employment in the United States. For
years after World War II, the two lines closely tracked each other, with increases in
jobs corresponding to increases in productivity. The pattern is clear: as businesses
generated more value from their workers, the country as a whole became richer,
which fueled more economic activity and created even more jobs. Then, beginning in
2000, the lines diverge; productivity continues to rise robustly, but employment
suddenly wilts. By 2011, a significant gap appears between the two lines, showing
economic growth with no parallel increase in job creation. Brynjolfsson and McAfee
call it the "great decoupling." And Brynjolfsson says he is confident that technology is
behind both the healthy growth in productivity and the weak growth in jobs.
It's a startling assertion because it threatens the faith that many economists place in
technological progress. Brynjolfsson and McAfee still believe that technology boosts
productivity and makes societies wealthier, but they think that it can also have a dark
side: technological progress is eliminating the need for many types of jobs and leaving
the typical worker worse off than before. Brynjolfsson can point to a second chart
indicating that median income is failing to rise even as the gross domestic product
soars. "It's the great paradox of our era," he says. "Productivity is at record levels,
innovation has never been faster, and yet at the same time, we have a falling median
income and we have fewer jobs. People are falling behind because technology is
advancing so fast and our skills and organizations aren't keeping up."
While technological changes can be painful for workers whose skills no longer match
the needs of employers, Lawrence Katz, a Harvard economist, says that no historical
pattern shows these shifts leading to a net decrease in jobs over an extended period.
Katz has done extensive research on how technological advances have affected jobs
over the last few centuries-describing, for example, how highly skilled artisans in the
mid-19th century were displaced by lower-skilled workers in factories. While it can
take decades for workers to acquire the expertise needed for new types of
employment, he says, "we never have run out of jobs. There is no long-term trend of
eliminating work for people. Over the long term, employment rates are fairly stable.
People have always been able to create new jobs. People come up with new things to
do."
Still, Katz doesn't dismiss the notion that there is something different about today's
digital technologies-something that could affect an even broader range of work. The
question, he says, is whether economic history will serve as a useful guide. Will the
job disruptions caused by technology be temporary as the workforce adapts, or will
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