The Real State of Technological Disruption in the U.S. Labor Market and What Policymakers Should Do About It

From academia to cable news, politicians, pundits, and prognosticators of all stripes are saying workers in advanced industrial nations now face almost unprecedented levels of labor market disruption and insecurity: taxi drivers being displaced by Uber, lawyers losing out to artificial intelligence-enabled legal document review, robots putting blue-collar manufacturing workers on unemployment, and so on. The prevailing view is that technology is driving a relentless occupational “churn” in which traditional jobs are being destroyed and the hope is that new high-tech jobs are being created in their place. But what does the data show? Is the pace of change—fast or slow—helping or hurting workers? A new ITIF report shows that, contrary to perceptions, technology is now disrupting the fewest jobs in at least 165 years—a troubling sign of sluggish productivity. To discuss the report’s findings, ITIF held a panel discussion with participants from academia, the nonprofit sector, and Congress.

The event’s keynote speakers were U.S. Representatives Randy Hultgren (R-IL) and John Delaney (D-MD). Delaney, appearing at the beginning of the event, credited technological innovation with the precipitous decline in global poverty during his lifetime. “The facts really do favor the optimist,” said Delaney, who also pointed out that technological innovation was “to some extent demonized in the last presidential election, really by both sides.” Referencing the recurrence of Luddite-like reactions, Delaney asserted that while it is relatively easy to see who will be negatively affected by innovation in the short term, it can be much harder to see who will receive the much larger benefits in the long run. Delaney concluded by urging policymakers to do a better job supporting those who lose out from technological progress, while also recognizing the broader benefits of innovation to society. That sentiment was echoed by Rep. Hultgren at the close of the event, who urged more support for young people through coding boot camps, apprenticeships, community colleges, so that “instead of fearing development, we can embrace it.”

Dr. Robert Atkinson, ITIF’s president and the report’s lead author, opened the panel with a discussion of ITIF’s findings, which are summarized here. Using Bureau of Labor Statistics data, Atkinson and coauthor John Wu, economic research assistant at ITIF, measured the amount of churn—the rate of occupational creation and destruction in the U.S. economy—for each decade after 1850. Contrary to the shibboleth that accelerating technological advancement threatens massive disruption in the labor market, the 2010–2015 period had the lowest rate of occupational churn of any period on record. Moreover, Atkinson said, alarmists have been wildly off the mark in the past when they have projected there will be AI-induced mass joblessness because of previous advances in computer science. Atkinson explained that “the reality is that most jobs are hard to automate,” giving the examples of school bus drivers, police, and hairdressers. He continued that although technological innovation does destroy some occupations, like elevator operators, it also creates entirely new kinds of jobs, like auto mechanics. Further, technology improves productivity, boosting wages and ultimately raising demand. This phenomenon, Atkinson said, produces additional jobs that would not exist absent innovation.

Adam Thierer, senior research fellow in the technology policy program at George Mason University’s Mercatus Center, warned against dystopian “techno-panics” about the future. The historical record, said Thierer, shows that pessimism about the future of work is nothing new. He attributed this phenomenon to past generations’ inability to forecast the creation of new kinds of jobs like software analysts or solutions architects. It is “essential that we have some humility,” Thierer said, “about looking at the future and about trying to prognosticate what will happen.” Echoing Thierer’s historical take, Dr. Robert Friedel, professor of history and technology at the University of Maryland, argued that the claim that technology is “inevitably accelerating” is “not historically supported.” Instead, improvements in human quality of life, he said, are due to a “culture of improvement” that relies as much on social beliefs as it does on technical progress. This culture of improvement, which Friedel said took root in the U.S. and Europe during the first industrial revolution, means not only is technological progress not inevitable, but it can be threatened by Luddites who fear innovation. History, Dr. Friedel said, suggests “there are winners and there are losers” from technological change. “But over time, the winners tend to outnumber the losers.”

The final two panelists focused on assisting those workers who are displaced. Helping those who are negatively impacted by innovation, argued Lauren Eyster, senior research associate at the Urban Institute, starts with education. This has to do with the amount of education—Eyster pointed to workers with only a high school diploma as being at particularly high risk of technology-related displacement—and with the type and quality of schooling. The evidence, Eyster said, shows that “approaches that tie what is learned in high school or other education to the world of work” are particularly effective in helping students adjust to changes in the job market during their careers. Eyster pointed to credentialing, apprenticeships, dual-enrollment programs, involving employers in STEM education, and accelerating retraining for displaced adult workers as promising initiatives. Eyster was followed by Edward Alden of the Council on Foreign Relations, who compared the U.S. approach to assisting displaced workers to other countries’ adjustment programs. Whether from trade or technological shifts, Alden argued, “if you look at where the U.S. stacks up compared to other countries on initiatives to help the workforce adjust, we are way, way behind.” Pointing out that the United States spends one-fifth of the OECD average on worker adjustment programs, Alden argued that other countries’ investments in such programs put the United States at a disadvantage. “The reality is that people don’t embrace change easily,” Alden said. “I would hypothesize… that even though the scale of job disruption may be smaller now, the transition is harder.” Alden concluded that the U.S. needs a “political consensus” that if policymakers fail to do a better job of helping those negatively affected by technological change, then “the very real gains from innovation, from technology, from trade, are going to be threatened.”

The panelists and keynote speakers underlined three key ideas: First, excessive pessimism about the future of work ignores or misinterprets the historical record. Second, there will be groups that are negatively affected by technological innovation, and there are programs that can and should be implemented to help those workers. And third, balancing optimism about the future with support for those negatively impacted by technological change is a politically viable position capable of generating bipartisan consensus. False alarmism about the net harms of disruption is unsupported as a matter of historical evidence and damaging when translated into policy. Policymakers should support those workers who are displaced and refrain from stifling progress with hyperbole.