Commentary: Just as telephone operators struggled with the automation of switching, AI promises to change global economies for the better, even as it wreaks havoc on individuals' jobs.
The robots may not be taking over, but they just might erase your job. Yes, it's almost certainly true that the "creative destruction" of technology will result in more jobs than it destroys, but a new academic paper about US telephone operators displaced by automated switching suggests that while the overall economy will be better off with artificial intelligence (AI)-driven automation, those immediately impacted may never recover.
Better in the long run
As detailed recently by Daphne Leprince-Ringuet on sister site ZDNet, the World Economic Forum (WEF) expects to see AI and other new technologies shred 85 million jobs over the next five years--that's the bad news. The good news is that these same technologies are expected to help create 97 million new jobs. COVID-19 has served as an accelerant to corporate plans to embrace things like AI/ML-driven automation, effectively hitting "fast forward" on this labor upheaval. All of this is for the better, at least at the macro level.
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In practical terms, this means that the majority of the work associated with information and data processing and retrieval (65%) will shift to machines, according to the WEF. People currently working as data entry clerks, accountants and auditors, and factory workers will be most affected even if, as I've written, organizations figure out ways to leverage things like AI to enhance worker productivity rather than replace it.
So what happens to these workers? It's a polite fiction that they'll simply be re-skilled and adapt to this new AI-automated future. As we've seen in past situations where technology automated away jobs, the immediate impact on those workers can be painful.
Just look at what happened in the telecommunications industry.
Learning from Ma Bell
As detailed in the aforementioned academic paper "Automation and the Fate of Young Workers: Evidence from Telephone Operation in the Early 20th Century," written by professors James Feigenbaum and Daniel P. Gross, "Telephone operation, one of the most common jobs for young American women in the early 1900s, provided hundreds of thousands of female workers a pathway into the labor force." It was a great force for good, but between 1920 and 1940 AT&T (then the dominant telecommunications provider in the US) automated telephone switching in more than half of its network, eliminating hundreds of thousands of jobs.
So what happened to those women who had been employed as telephone operators?
[T]he automation of telephone operation led to a large, swift, and permanent decline in the number of young, white, American-born women working as operators, of around two-thirds in levels—roughly 2% of total employment for the group (in any job). As it was for many women a transitory job (often, a first job), far more were exposed. For an automation shock, we consider this large, especially for a vulnerable subset of the labor supply.
Our question is: what happened after these jobs disappeared? Did the elimination of a major entry-level job cut off future generations from entering the workforce? After accounting for concurrent trends taking place in cities of similar size around the country independent of cutovers, we do not find that the shock reduced later cohorts' employment. We also see no substitution into marriage or childbearing. The negative shock to labor demand was instead counteracted by growth in other occupations, especially secretarial work and restaurant work, which absorbed the women who might have otherwise been telephone operators.
Future generations of would-be telephone operators, in other words, did just fine. The economy took care of creating net new jobs. But for those telephone operators who lost their jobs to automated switching? "While some became operators at private switchboards, others left the workforce, and those who remained employed were more likely to have switched to lower-paying occupations."
Automation, in short, was good for the overall economy but bad for those whose jobs were automated away.
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Beyond the Luddites
So what do we do? It doesn't seem practical to destroy the looms as the Luddites once did, attempting to hold back the machines that threatened their jobs. But it's also not useful to engage in wishful thinking about "upskilling" or "re-skilling." These are positive endeavors, but it feels like we (by which I mean industry and government, working together) can't afford to wave away the negative impact technology can have on jobs today.
Those telephone operators either left the workforce or found lower-paying jobs. Is there something government can do to underwrite some of the costs of helping the modern-day equivalent of the telephone operators to find new jobs? I don't know. If you have ideas, please comment below or ping me on Twitter (@mjasay).
Disclosure: I work for AWS, but the views expressed herein are mine.
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