Automation Puts a Premium on Decision-Making Jobs (axios.com) 59
A new paper shows that as automation has reduced the number of rote jobs, it has led to an increase in the proportion and value of occupations that involve decision-making. From a report: Automation and AI will shape the labor market, putting a premium -- at least for now -- on workers who can make decisions on the fly, while eroding the value of routine jobs. David Deming, a political economist at the Harvard Kennedy School, analyzed labor data over the past half-century and found that the share of all U.S. jobs requiring decision-making rose from 6% in 1960 to 34% in 2018, with nearly half the increase occurring since 2007.
Partially as a result, a greater share of wages is going to management and management-related occupations, more than doubling since 1960 to 32% -- a trend that is more pronounced in high-growth industries. This shift has also reinforced generational disparity in the labor market. Getting better at making decisions requires experience, and experience requires time on the job. Largely as a result, career earnings growth in the U.S. more than doubled between 1960 and 2017, and the age of peak earnings increased from the late 30s to the mid-50s.
Partially as a result, a greater share of wages is going to management and management-related occupations, more than doubling since 1960 to 32% -- a trend that is more pronounced in high-growth industries. This shift has also reinforced generational disparity in the labor market. Getting better at making decisions requires experience, and experience requires time on the job. Largely as a result, career earnings growth in the U.S. more than doubled between 1960 and 2017, and the age of peak earnings increased from the late 30s to the mid-50s.
Translation (Score:5, Insightful)
Re:Translation (Score:5, Interesting)
The problem is that with less money floating around in the wild via wages, fewer people have money to spend. The response to that is to lower prices. When two companies producing the same kind of product have reduced their costs, unless they are colluding to keep their prices up, they both lower their prices to make their product more appealing than their competitor's. That's market forces.
Automation will reduce employment. There's no question about that. The remaining jobs will tend to be those that command higher wages, but there will be fewer of them. We're going to have a rough couple of years, but when we come out through the other side, we're in post-scarcity territory.
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>>The response to that is to lower prices.
A product that lowers price beneath "worthwhile" stops being a product. Market forces kept the margin thin and if the proles can't afford it they won't bother.
The endgame is polarized, forks. $2 shirts will stop being worthwhile, they will sell little, the few can afford them prefer and can afford the $10,000 shirts. The $0.05 gray wool jumpsuits do get bought enough to bother with, barely. Kinda. It costs $0.08 for a robot to make one, so even garbage is beyo
Re:Translation (Score:4, Insightful)
That won't just happen automatically. The US is currently designed around working to support life, or maybe giving just enough temporary aid to scrape by if you're not working. To get to a post scarcity economy where people whose labor isn't needed can live a comfortable life without constant insecurity and stress will require UBI or something like it.
The phrase you're looking for (Score:2)
We almost did it when COVID hit, but we managed to pry just barely enough money from the upper crust in the form of "stimulus" to keep it from happening.
Re:Translation (Score:4, Informative)
Automation will continue eliminating jobs
Except this is the opposite of what has historically happened and is the opposite of what is currently happening.
Corporate America has more than 8 million unfilled job vacancies, more than ever before in history.
Unfilled jobs soar to record high [spglobal.com]
Automation makes workers more productive and thus more profitable for employees. So demand for labor goes up, not down. Workers in developed countries have seen their wages rise twenty-fold since the industrial revolution began.
If automation actually "eliminates jobs" then North America, Europe, and East Asia would be mired in poverty while countries like Somalia, Mozambique, and Afghanistan, which wisely avoided the "productivity catastrophe" would be prosperous.
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Automation will continue eliminating jobs
Workers in developed countries have seen their wages rise twenty-fold since the industrial revolution began.
Now redo your analysis by a) adjusting for inflation b) reducing your interval from 200 years to last 50.
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Now redo your analysis by a) adjusting for inflation b) reducing your interval from 200 years to last 50.
Are you serious? The last 50 years have seen enormous increases in automation accompanied by the fastest growth in living standards ever. More than two billion people have moved out of poverty and into the middle class.
Of course, America didn't do so well over that period, mainly because of slow productivity growth. But that was not caused by "automation", but the exact opposite: the failure to automate as our economy shifted from manufacturing to services.
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You are playing word games by shifting discussion to living standards from wages. You are also conflating developing words with US. Yes, things got better elsewhere in the world. This doesn't help people living in tent cities in US.
Re:Translation (Score:4, Interesting)
Over last 50 years in US wages stagnated while cost of living increased.
Wage stagnation in America was not caused by "robots stealing jobs".
It was caused by the opposite: Growth in automation stalled as jobs shifted from manufacturing to services.
Where automation continued to grow, wages continued to soar. East Asia is the most obvious example.
This is the exact opposite of your original assertion.
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Counterpoint - third-world countries that seen wage increases did not invest into any automation until after they established industries. Consequently, wealth transfer and increased wages enabled them to automate, not the other way around.
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I do not agree with your "Growth in automation stalled" premise
Why productivity growth is declining [caixabankresearch.com]
increased wages enabled them to automate, not the other way around.
I see. So China automated because of rising wages for rice farmers. Sure. Whatever.
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increased wages enabled them to automate, not the other way around.
I see. So China automated because of rising wages for rice farmers. Sure. Whatever.
China started automating manufacturing precisely because of rising wages for factory workers.
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I do not agree with your "Growth in automation stalled" premise and even if I grant you that premise I would not agree that there is a causal relationship with wage stagnation. Counterpoint - third-world countries that seen wage increases did not invest into any automation until after they established industries. Consequently, wealth transfer and increased wages enabled them to automate, not the other way around.
Before you continue with your disagreement, I suggest you read Enrico Morretti's "The New Geography of Jobs."
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Yes, I am serious. Over last 50 years in US wages stagnated while cost of living increased. Wealth inequality is at record numbers. For the first time in history, children no longer can expect to have higher quality of life than parents. You are playing word games by shifting discussion to living standards from wages. You are also conflating developing words with US. Yes, things got better elsewhere in the world. This doesn't help people living in tent cities in US.
So, by your own argument, this is not an automation problem, but an American public policy problem. Germany and Japan have seen far more automation that we do, and yet their workers do not suffer as much as ours.
Put the blame where it is (it is not in automation.)
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The issue of stagnating wage growth is a combination of government tax policy shortcomings and cultural failure that allowed for the ideological shift in business leadership that de-prioritized worker's well-being and prioritized short-term gains. As a consequence we no longer have 'company men' and instead we have multi-million CEO bonuses and record stock market returns. The outsourcing
Re: Translation (Score:2)
The automobile put 90+% of horses out of work. Over 100 years later, the labor market hasn't really even begun to recover.
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If automation actually "eliminates jobs" then North America, Europe, and East Asia would be mired in poverty while countries like Somalia, Mozambique, and Afghanistan, which wisely avoided the "productivity catastrophe" would be prosperous.
This was true in the past. Automation eliminated some tasks (like lifting heavy loads) but was still unable to do others (like manipulating arbitrary objects with one's hands). So some jobs were eliminated, but other jobs became more productive with the help of automation. Because pretty much every can manipulate objects with their hands (and other such non-automatable tasks), everyone's wages went up.
This will not necessarily continue in the future. We maybe be approaching the point where EVERY skill posse
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We maybe be approaching the point where EVERY skill possessed by much of the population will be better done by automation.
You apparently fail to understand a basic economic concept: Comparative advantage [wikipedia.org].
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Irrelevant, if the human worker has *negative* value (requiring oversight, occasional making destructive mistakes, sometimes offending or annoying customers) which outweighs the minute positive value of them doing something a machine can do (but slower).
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Yes the working classes get robbed (all throughout history) but I have to confess I have a problem with your attitude about work.
I enjoy what I do and I'm proud of it, even back 30 yrs ago when I was being exploited mercilessly.
I work in the skilled trades, I have friends on the assembly lines and driving trucks. They don't consider $30 an hour with good benefits to be a shit job. They don't consider a retirement that pays 90% of salary to be a shit job.
I work as a decision maker all day, just like the truc
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but I'm the guy that can tell you *why* to do it a certain way out of all the choices. What I do cannot be automated at any expense if at all possible.
Of course it can.
First, the *why* can come from the developers of the automated production line, instead of you. While technically not automating *why*, you now provide no value due to the automation of that production line.
Second, this is the big danger from AI. I doubt there's a whole lot of *why* decisions you make that aren't the result of a logical decision tree. So if your years of experience can be simulated in minutes of AI training, that's a problem for your continued employment. We're not ther
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Rolls Royce had it's best year every in 2020 (Score:2)
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I think we all know what that means.
Extra alcohol ration for Rolls Royce's robots!
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We are looking at the problems we have in the wrong way.
1. The problem with our economy today, isn't the lack of Jobs, but the Lack of Careers.
There are so many professions that use to be a career, which now have downgraded to a Job, and the list of careers are being downgraded all the time.
For example people use to have a career working in retail, such as a sales associate. They had a lot of the similar jobs today, such as working the register, stocking shelves, running inventory, however they were expect
It's not that simple. (Score:2)
Automation will continue eliminating jobs without increasing wages for remaining employees while delivering all profits to VIPs and shareholders.
It's not that simple. The age of abundance that we are entering has classic capitalism as a casualty. There will still be capitalism, but it will be limited to limited resources. Eco-taxes and quotas, responsibilities, etc. A sign of that are the negative interest rates we've been seeing lately. That actually is a good thing, because it de-powers capital. For the f
This is a bad narrative (Score:2)
Automation will continue eliminating jobs without increasing wages for remaining employees while delivering all profits to VIPs and shareholders.
And those who shift to decision-making jobs (which aren't necessarily managerial in nature). We can do a lot to improve the situation for those displaced from rote jobs while recognizing that the situation is not black-and-white.
A lot of this has to do with adult education given that 1) not all developed countries have the same problem, and 2) the US is awful in this regard among rich nations.
Automation is not the problem. Our culture and our lack of social safety nets and proper education, that's where
Problem with automation (Score:4, Insightful)
Really, the problem with automation is that someone has to actually build the automation and keep it up-to-date. That's a true pain in the behind, and requires understanding of the process that's being automated.
This can be non-trivial.
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Yeah but not as many bodies. That guy replaces 20 decision making co-workers and the automation is nowhere near the same thing. It just looks that way in the short term on paper. The problem is the things that fall through the cracks and the bitrot from small errors that push through will accumulate over time.
The people automation replaces weren't making 'decisions' in the business sense. They're generally following some complicated set of business rules handed down to them.
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No they are usually making decisions in a computer technical sense. The most common target for automation is IT.
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"The people automation replaces weren't making 'decisions' in the business sense. They're generally following some complicated set of business rules handed down to them." No they are usually making decisions in a computer technical sense. The most common target for automation is IT.
Isn't all of IT automation?
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Everyone pretends we are talking about factory work when we are talking about automation taking jobs. Those jobs were lost by the 90s. Most of the country is still devastated by that fact even though there is net dollar gain in terms of GDP. Partly this is because enough new jobs didn't replace t
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Decision makers? (Score:3, Interesting)
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I don't know about your company, but at my company the upper echelons are filled with people who push decisions onto those below them, claim credit for the successes, and deflect blame for failures, all while collecting the fattest salaries on the payroll. Anyone got a robot for that?
Good news! The paper claims that the premium is on folks who can make decisions on the fly, without a lot of messy thought or reflection. It also says nothing about judgement, ethics, or morals.
Just keep making those same snap decisions as before and let the bosses take all the credit. We'll be fine.
Re: Decision makers? (Score:2)
Anyone got a robot for that?
Bender?
target the decision makers (Score:2)
If the decisions makers are doing there jobs well they are probably correlating a lot of data and doing a lot of analysis work.
Guess what the computer can determine which cell holds the larger value at the bottom row of that business objects report.
There are probably relatively fewer machine learning problems to solve when it comes to actually implementing management level decision making than most other other work. That management usually represents a large salary expense getting rid of it would be a big w
Re: target the decision makers (Score:2)
Re: target the decision makers (Score:2)
According to the study, it's snap decision makers who are becoming valuable. Not analysts. Which makes sense. The computer can do the analysis. What it needs is a human gut check.
Technology does the easy jobs. (Score:4, Informative)
Technology will not get rid of the need for jobs, but change what jobs will be needed. When I am working with a new unit, for work (I am a software architect) I tell them that my job is to make your job harder. As I will design the system to handle a good number of the mind numbing simple jobs, leaving the person to deal with the hard stuff, exceptions to the rule, and having to make the a complex decision.
So far all my work, hasn't caused layoffs, or mass staff reduction, it had allowed my work to expand as bottle necks towards expansion had been reduced, and it allowed for more higher paid jobs to be brought in, as before the Automation software, each employee may bring in 10% profit for their work, has risen to 40%. So each employee had became more valuable. Allowing them the time to make better decision and choose the better option, where before having a mountain of paper work, quick and often wrong decisions were made to get past the mountain of mindless work.
So their job is harder, but relies less on doing the volume, but providing better quality.
What usually pisses me off the most, is when some people often upper management, just put blind trust in what my program does, without review, or properly considering my kick-outs. They often don't quite understand the idea of confidence level. Where my program may report data that it isn't confident enough to make the final decision.
Even today the Best AI is like you best and worst employee. It will be able to handle a lot of data better than a person can, however it isn't flexible and quick to adapt like a person. So as we get more automation in place, we are going to need more decision makers making more complex decisions.
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This is the best and also the most concise explanation of automation/A.I. I've read in the past decade. Virtual +1 informative.
And this has been the trend for 250 years (Score:4, Interesting)
The entire thrust of the Industrial Revolution has been to add outside power and automation to manual tasks. The entire thrust of the Knowledge Economy was the same: replace manual work of collecting and entering data with computers and leave people free to think about the data.
Remember back in the '70s, when we still had a typing pool and office memos got sent around by human letter carriers? I'm not quite that old but all that's been automated out of existence. Similarly, we don't need as many clerks collating TPS reports but do need people to interpret the results of that collation and make decisions based on what the reports show.
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https://imgflip.com/i/5b5wsh [imgflip.com] (SFW)
Automation of Decision-Making (Score:2)
is maybe preferable to an idiot manager with a sparkly pivot table in a spreadsheet.
I would be concerned that there may not be enough data for good decision-making, but it was never mentioned in the summary whether the decisions were good or bad.
I guess the human element is the real issue, if you staff a project, will Automation ensure the best people are working on that project, or just lump anyone with a similar job title into basically a secretarial pool of bodies?
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I think automating teams and assigning people is part of "decision making jobs" and should be one of the last thing to be automated, since it would require everyone applying for jobs to fill extremely lengthy questionnaires about themselves and there is currently a nearly world-wide debate about protection of personal data.
Gerontocracy (Score:2)
Let's hope those people aren't business administration types who generally have the collective brain power of an orange. The CEOs of the most successful companies are engineers. They actually learn how to solve problems, not just talk like they do.
Until decision making is automated. (Score:1)
I thought the idea behind AI was to automate decision making. Repeating a process where you see a pattern based on input.
I think innovation/creation is the hardest to automate. Choosing between two known options isn't as hard as creating a new one out of thin air. Where that happens is debatable, but would be interesting to try to track.
"a greater share of wages is going to management and management-related occupations"
None of that is because they're making the decisions about where profits go. It's all
"Deciders" (Score:1)
A great win for those "deciders" who brag about their ability to make decisions without needing facts or input...
(justifying their avoidance of the actual fact finding, invention, dissent and debate that's part of real decision making.)
I make decisions on top of moths also (Score:1)
I decided on the fly that this was written by Captain Obvious.
Programming doesn't value experience (Score:2)
IT and programming in particular seems to have bucked this trend. Programmer wages peak around the age of 40 and then mostly plateau. This is largely because frameworks and stacks seem to change about every 3 years or so such that prior experienc