Publication Date: September 2019
Publisher: Center for Retirement Research at Boston College
Author(s): Anek Belbase; Alice Zulkarnain
Keywords: Financing Retirement
Coverage: United States
Throughout history, a familiar story has played out in societies undergoing rapid technological change. On one side, doomsday predictors have warned that laborsaving machines will make jobs obsolete and fuel social unrest. On the other side, utopians have preached a machine-powered era of abundance and leisure. Both sides have always thought that “this time is different” and that the world would never be the same. In a sense, both sides have been right (though not to the extremes predicted). Technological innovation has made workers more productive overall but has also displaced workers and periodically fed social unrest. Importantly, each wave of innovation and adoption has changed the nature of work and the relative value of workers’ skills in unique ways.
1 Like prior generations trying to prepare for an uncertain future, current workers and policymakers are wondering how the rise of computers and robots – which can seemingly beat humans at any task from detecting tumors to driving – will change the nature of work. The stakes are particularly high for older workers, who increasingly need to work until their late 60s to afford to retire. This brief is the first of a three-part series investigating the impact of the current wave of automation on the job prospects of older workers. To place this automation wave in context, this brief reviews the literature on the effect of laborsaving technology over the past two centuries.
2 The discussion proceeds as follows. The first section explains how technology expands the economic pie. The second section describes how machines change the level and type of labor that is in demand. The third section focuses on the painful transitions that some workers have faced because of machines, and the fourth section compares the changes taking place today to past waves to assess whether this time is, in fact, different. The final section concludes that changes today, while qualitatively different from the past, are comparable in scope. It seems reasonable to expect that – at least for a few more decades – machines will continue to make some skills more valuable than others without making human skills obsolete.