How Far Will Businesses Go to Automate the Middle Class into Unemployment?

Competition is driving companies to automate more and more middle-class jobs. Sectors of the economy like legal research and nursing are being "hallowed out" says an MIT economist. 

What's the Latest Development?


To become more efficient, businesses are automating more and more jobs once done by humans. Will that open new economic sectors or just aggravate current wealth inequitiesor both? "Amazon, for example, paid $775 million for Kiva Systems, a company that makes robotic dollies that zip across warehouse floors carrying shelves full of goods. Kiva found it was more productive to have the humans who 'pick, pack, and stow' items stay in one place and let intelligent shelves come to them." Amazon purchased the company in order to reduce labor requirements in dozens of its warehouses. 

What's the Big Idea?

The US economy has evolved from one based on agriculture to manufacturing to service jobs, with job losses in one sector being replaced by gains in the subsequent rising industry. But how long will that trend hold? MIT economist David Autor argues that it's the jobs in the middle that are disappearing: "certain clerical, sales, and administrative jobs and some on factory floors." To be sure, "among the 10 fastest-growing new job categories between 2009 and 2011, seven have the word 'computer' or 'software' in them," but how large can the new automation industry become (before automating human jobs becomes something machines do more efficiently that human workers)?

Photo credit: Shutterstock.com

 

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