Learning in Retirement TempLe BETH El November 17, 2016

Future Changes in the Labor Market Mark S. LeClair Fairfield University

To get a copy of slides………………. Go to: www.faculty.fairfield.edu/mleclair Click on Icon on top of webpage: LIR

Questions to be Addressed Today What jobs are disappearing? What will they be replaced with? How to cope?

Jobs that are projected to vanish in the next 20 years (many such lists) Cashiers Telemarketers (Amen) Freight/Stock Workers (Warehouse) Newspaper Delivery Travel Agents (Demise has been predicted before)

Postal Workers Taxi Drivers/Dispatchers Word Processors/Typists Librarians (hmmmm….) Social Media Managers (skill set will be possessed by most employees)

Jobs where employment will likely be lower Farmworkers (automation) Textiles/Apparel (overseas competition) Housekeeping (automation) Drivers (automation) Pilots (automation) Warehouse workers (nearly fully automated) Lawyers/financial analysts/etc. (web resources)

“End of work”? As automation takes over, what do humans do? Fortune Magazine notes that both the upper end (engineers) and some lower end jobs (plumbers, car mechanics) are probably safe Many of the lost jobs are high-paying, education-rich May create societal issues (lots of unemployed lawyers)

Note that job creation and destruction has always occurred………….. Ice men Low-end manufacturing Lamplighters Switchboard operators Typesetters

My worst nightmare….. Professor in a box Automated teaching programs Or, holographic teaching to multiple classrooms

Impact on affected labor markets

Will markets clear? Shift down in demand lowers wages and makes labor more competitive with machinery Market-clearing wage may be so low as to create social issues Particularly in the unskilled part of the labor market (e.g. housekeepers) Will new jobs be created to enable those unemployed to train for new work? Learning to fix robots that do manual labor

What are the jobs of the future? Medical care workers Software developers Cybersecurity Automation design Energy Workers Construction

Lists vary widely Largely depends upon what can and cannot be automated Impact on the lower end of the labor market likely to worsen income distribution Can imagine a Luddite-like response by some workers who fear the loss of their jobs

Study by MIT on Productivity and Use of Labor Productivity Rising due to automation Is not generating employment as it used to do 320,000 robots sold in the two years prior to issuance of report Trend is likely to accelerate Burger-flipping machine is already available Danger in further increasing the minimum wage

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London School of Economics Of seventeen countries examined density of robots increased 150% (1993-2007). Price of robots dropped by as much as 80% At the start of the period studied, robots were most often used in transportation equipment and metal industries, with approximately 5.4 and 2.4 robots per million hours worked. After 1992, “the fastest increase in the number of robots per million hours worked took place in the transportation equipment (about 8.1), chemical (about 3.3) and metal (about 1.7) industries.” Over the period studied, the use of robots led to an increase in both total factory productivity and wages (for those still employed).

What happens if the fundamental assumption of scarcity no longer holds? Production through automation eliminates need to produce more “All” wants satisfied Question becomes what will people do with their time Play video game and watch cat videos all day Fundamental role of humans changes Also puts most economists out of business :(

Are Robots Even as Infallible as we Imagine Them to be? Robot Fails https://www.youtube.com/watch?v=WwECMrU eHOY

Supply-Side of Market Complicates Things Further

U.S. Labor Force growing – Immigration is a key factor Unlike in Europe and Japan Need to create jobs at a greater clip just to keep unemployment steady Labor Force participation rates are falling, which reduces need for jobs But, this is probably also bad news Due mostly to discouraged workers

Financial Crisis Has Contributed to Problem Workers are staying in the workforce later Not making room for younger members of labor force Good for social security and Medicare; not good for employment This is potentially a significant looming social problem

Good News is Job Creation is Now Finally Steadier Despite Anemic Growth in the Economy (1.5%) This is a short-run phenomenon, however Long-Term prospects, as noted, are concerning

Solution may lie Outside U.S. Automation only makes sense in a very high income setting Not in the developing world – labor is inexpensive, plentiful and under-employed If automation produces an increase in living standards, attention could shift to raising living standards elsewhere

Questions and Thank You