Technology won't eliminate good jobs, but it could exacerbate inequality
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Artificial intelligence threaten the low-salary, outsourced jobs that emerging and underdeveloped countries have counted on to escape poverty. (Photo: iSTOCK)
What’s the future of work? Will gigs replace salaried employment and will robots eventually leave humans with nothing to do? I see reason for scepticism, but also for concern.
Technology, of course, is already making independent work a lot easier. It puts workers into contact with customers and helps them run a back office. More importantly, it allows individuals to build and promote their reputations at low cost. Customers used to rely on a taxi company’s reputation, or choose a washing machine by the manufacturer’s brand. Now, each worker has a brand: On Uber, customers can reject drivers based on their personal ratings. A firm’s collective reputation, with the concomitant control of its employees’ behavior, is becoming gradually less important.
That said, technology can also favour standard salaried employment. The economists George Baker and Thomas Hubbard, for example, have noted how onboard computers could change US trucking. By monitoring behaviour, they would solve a moral hazard problem: Drivers have little incentive to be as careful with company trucks as they would with their own. As a result, more drivers could become employees of companies that buy and maintain fleets, rather than going it alone. They wouldn’t have to invest in their own vehicles, which makes them vulnerable to recessions by putting their savings in the same sector as their labour; and they wouldn’t be out of pocket and out of work when their trucks broke down.
More generally, conventional jobs have a lot of advantages. First, a single worker or group of workers might lack the capital needed to set up a business, or prefer to avoid the stress and risk of running one (consider doctors or dentists who choose to be employees of a medical clinic). Second, business owners might not want their employees to have other bosses — particularly if the work involves confidential information or team projects that require undivided time and attention. Third, reputations based on ratings might not be reliable: The economist Diane Coyle has shown that the quality of individual consultants can be hard to monitor, at least immediately, whereas a traditional consultancy may be more efficient at “guaranteeing” quality.
I believe that salaried employment will not disappear, although it might become less prevalent over time.
But what about artificial intelligence? Many jobs involving routine (and thus codifiable) tasks have been eliminated: banking transactions are digitised, checks are processed by optical readers, call centres use software to shorten the length of conversations between customer and employee, or even replace humans with bots.
These changes have global repercussions. They threaten the low-salary, outsourced jobs that emerging and underdeveloped countries have counted on to escape poverty. In developed countries, as the economist David Autor and his co-authors have demonstrated, they tend to benefit those employees whose skills complement the new digital tools. This “hollows out” the distribution of jobs into either high-paying skilled positions or low-paying basic service positions.