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Why Are There Still So Many Jobs? | David Autor | TEDxCambridge

August 24, 2019


Here’s a startling fact: in the 45 years since the introduction
of the automated teller machine, those vending machines that dispense cash, the number of human bank tellers
employed in the United States has roughly doubled, from about a quarter of a million
to a half a million. A quarter of a million in 1970
to about a half a million today, with 100,000 added since the year 2000. These facts, revealed in a recent book by Boston University
economist James Bessen, raise an intriguing question: what are all those tellers doing, and why hasn’t automation
eliminated their employment by now? If you think about it, many of the great inventions
of the last 200 years were designed to replace human labor. Tractors were developed to substitute mechanical power
for human physical toil. Assembly lines were engineered to replace inconsistent human handiwork with machine perfection. Computers were programmed to swap out error-prone, inconsistent
human calculation with digital perfection. These inventions have worked. We no longer dig ditches by hand, pound tools out of wrought iron or do bookkeeping using actual books. And yet, the fraction of US adults
employed in the labor market is higher now in 2016 than it was 125 years ago, in 1890, and it’s risen in just about every decade in the intervening 125 years. This poses a paradox. Our machines increasingly
do our work for us. Why doesn’t this make our labor redundant
and our skills obsolete? Why are there still so many jobs? (Laughter) I’m going to try to answer
that question tonight, and along the way, I’m going to tell you
what this means for the future of work and the challenges that automation
does and does not pose for our society. Why are there so many jobs? There are actually two fundamental
economic principles at stake. One has to do with human genius and creativity. The other has to do
with human insatiability, or greed, if you like. I’m going to call the first of these
the O-ring principle, and it determines
the type of work that we do. The second principle
is the never-get-enough principle, and it determines how many jobs
there actually are. Let’s start with the O-ring. ATMs, automated teller machines, had two countervailing effects
on bank teller employment. As you would expect,
they replaced a lot of teller tasks. The number of tellers per branch
fell by about a third. But banks quickly discovered that it
also was cheaper to open new branches, and the number of bank branches
increased by about 40 percent in the same time period. The net result was more branches
and more tellers. But those tellers were doing
somewhat different work. As their routine,
cash-handling tasks receded, they became less like checkout clerks and more like salespeople, forging relationships with customers, solving problems and introducing them to new products
like credit cards, loans and investments: more tellers doing
a more cognitively demanding job. There’s a general principle here. Most of the work that we do requires a multiplicity of skills, and brains and brawn, technical expertise and intuitive mastery, perspiration and inspiration
in the words of Thomas Edison. In general, automating
some subset of those tasks doesn’t make the other ones unnecessary. In fact, it makes them more important. It increases their economic value. Let me give you a stark example. In 1986, the space shuttle Challenger exploded and crashed back down to Earth less than two minutes after takeoff. The cause of that crash, it turned out, was an inexpensive rubber O-ring
in the booster rocket that had frozen on the launchpad
the night before and failed catastrophically
moments after takeoff. In this multibillion dollar enterprise that simple rubber O-ring made the difference
between mission success and the calamitous death
of seven astronauts. An ingenious metaphor
for this tragic setting is the O-ring production function, named by Harvard economist Michael Kremer after the Challenger disaster. The O-ring production function
conceives of the work as a series of interlocking steps, links in a chain. Every one of those links must hold
for the mission to succeed. If any of them fails, the mission, or the product
or the service, comes crashing down. This precarious situation
has a surprisingly positive implication, which is that improvements in the reliability
of any one link in the chain increases the value
of improving any of the other links. Concretely, if most of the links
are brittle and prone to breakage, the fact that your link
is not that reliable is not that important. Probably something else will break anyway. But as all the other links
become robust and reliable, the importance of your link
becomes more essential. In the limit, everything depends upon it. The reason the O-ring was critical
to space shuttle Challenger is because everything else
worked perfectly. If the Challenger were
kind of the space era equivalent of Microsoft Windows 2000 — (Laughter) the reliability of the O-ring
wouldn’t have mattered because the machine would have crashed. (Laughter) Here’s the broader point. In much of the work that we do,
we are the O-rings. Yes, ATMs could do
certain cash-handling tasks faster and better than tellers, but that didn’t make tellers superfluous. It increased the importance
of their problem-solving skills and their relationships with customers. The same principle applies
if we’re building a building, if we’re diagnosing
and caring for a patient, or if we are teaching a class to a roomful of high schoolers. As our tools improve, technology magnifies our leverage and increases the importance
of our expertise and our judgment and our creativity. And that brings me
to the second principle: never get enough. You may be thinking, OK, O-ring, got it, that says the jobs that people do
will be important. They can’t be done by machines,
but they still need to be done. But that doesn’t tell me
how many jobs there will need to be. If you think about it,
isn’t it kind of self-evident that once we get sufficiently
productive at something, we’ve basically
worked our way out of a job? In 1900, 40 percent of all US employment was on farms. Today, it’s less than two percent. Why are there so few farmers today? It’s not because we’re eating less. (Laughter) A century of productivity
growth in farming means that now,
a couple of million farmers can feed a nation of 320 million. That’s amazing progress, but it also means there are
only so many O-ring jobs left in farming. So clearly, technology can eliminate jobs. Farming is only one example. There are many others like it. But what’s true about a single product
or service or industry has never been true
about the economy as a whole. Many of the industries
in which we now work — health and medicine, finance and insurance, electronics and computing — were tiny or barely existent
a century ago. Many of the products
that we spend a lot of our money on — air conditioners, sport utility vehicles, computers and mobile devices — were unattainably expensive, or just hadn’t been invented
a century ago. As automation frees our time,
increases the scope of what is possible, we invent new products,
new ideas, new services that command our attention, occupy our time and spur consumption. You may think some
of these things are frivolous — extreme yoga, adventure tourism, Pokemon GO — and I might agree with you. But people desire these things,
and they’re willing to work hard for them. The average worker in 2015 wanting to attain
the average living standard in 1915 could do so by working
just 17 weeks a year, one third of the time. But most people don’t choose to do that. They are willing to work hard to harvest the technological bounty
that is available to them. Material abundance has never
eliminated perceived scarcity. In the words of economist
Thorstein Veblen, invention is the mother of necessity. Now … So if you accept these two principles, the O-ring principle
and the never-get-enough principle, then you agree with me. There will be jobs. Does that mean there’s
nothing to worry about? Automation, employment, robots and jobs — it’ll all take care of itself? No. That is not my argument. Automation creates wealth by allowing us to do
more work in less time. There is no economic law that says that we
will use that wealth well, and that is worth worrying about. Consider two countries, Norway and Saudi Arabia. Both oil-rich nations, it’s like they have money
spurting out of a hole in the ground. (Laughter) But they haven’t used that wealth
equally well to foster human prosperity, human prospering. Norway is a thriving democracy. By and large, its citizens
work and play well together. It’s typically numbered
between first and fourth in rankings of national happiness. Saudi Arabia is an absolute monarchy in which many citizens
lack a path for personal advancement. It’s typically ranked 35th
among nations in happiness, which is low for such a wealthy nation. Just by way of comparison, the US is typically ranked
around 12th or 13th. The difference between these two countries is not their wealth and it’s not their technology. It’s their institutions. Norway has invested to build a society with opportunity and economic mobility. Saudi Arabia has raised living standards while frustrating
many other human strivings. Two countries, both wealthy, not equally well off. And this brings me
to the challenge that we face today, the challenge that
automation poses for us. The challenge is not
that we’re running out of work. The US has added 14 million jobs since the depths of the Great Recession. The challenge is that many of those jobs are not good jobs, and many citizens
cannot qualify for the good jobs that are being created. Employment growth in the United States
and in much of the developed world looks something like a barbell with increasing poundage
on either end of the bar. On the one hand, you have high-education, high-wage jobs like doctors and nurses,
programmers and engineers, marketing and sales managers. Employment is robust in these jobs,
employment growth. Similarly, employment growth
is robust in many low-skill, low-education jobs like food service, cleaning, security, home health aids. Simultaneously, employment is shrinking in many middle-education,
middle-wage, middle-class jobs, like blue-collar production
and operative positions and white-collar
clerical and sales positions. The reasons behind this contracting middle are not mysterious. Many of those middle-skill jobs use well-understood rules and procedures that can increasingly
be codified in software and executed by computers. The challenge that
this phenomenon creates, what economists call
employment polarization, is that it knocks out rungs
in the economic ladder, shrinks the size of the middle class and threatens to make us
a more stratified society. On the one hand, a set of highly paid,
highly educated professionals doing interesting work, on the other, a large number
of citizens in low-paid jobs whose primary responsibility is to see
to the comfort and health of the affluent. That is not my vision of progress, and I doubt that it is yours. But here is some encouraging news. We have faced equally momentous
economic transformations in the past, and we have come
through them successfully. In the late 1800s and early 1900s, when automation was eliminating
vast numbers of agricultural jobs — remember that tractor? — the farm states faced a threat
of mass unemployment, a generation of youth
no longer needed on the farm but not prepared for industry. Rising to this challenge, they took the radical step of requiring that
their entire youth population remain in school
and continue their education to the ripe old age of 16. This was called the high school movement, and it was a radically
expensive thing to do. Not only did they have
to invest in the schools, but those kids couldn’t work
at their jobs. It also turned out to be
one of the best investments the US made in the 20th century. It gave us the most skilled,
the most flexible and the most productive
workforce in the world. To see how well this worked,
imagine taking the labor force of 1899 and bringing them into the present. Despite their strong backs
and good characters, many of them would lack
the basic literacy and numeracy skills to do all but the most mundane jobs. Many of them would be unemployable. What this example highlights
is the primacy of our institutions, most especially our schools, in allowing us to reap the harvest of our technological prosperity. It’s foolish to say
there’s nothing to worry about. Clearly we can get this wrong. If the US had not invested
in its schools and in its skills a century ago with
the high school movement, we would be a less prosperous, a less mobile and probably
a lot less happy society. But it’s equally foolish
to say that our fates are sealed. That’s not decided by the machines. It’s not even decided by the market. It’s decided by us
and by our institutions. Now, I started this talk with a paradox. Our machines increasingly
do our work for us. Why doesn’t that make
our labor superfluous, our skills redundant? Isn’t it obvious that the road
to our economic and social hell is paved with our own great inventions? History has repeatedly offered
an answer to that paradox. The first part of the answer
is that technology magnifies our leverage, increases the importance, the added value of our expertise,
our judgment and our creativity. That’s the O-ring. The second part of the answer
is our endless inventiveness and bottomless desires means that we never get enough,
never get enough. There’s always new work to do. Adjusting to the rapid pace
of technological change creates real challenges, seen most clearly
in our polarized labor market and the threat that it poses
to economic mobility. Rising to this challenge is not automatic. It’s not costless. It’s not easy. But it is feasible. And here is some encouraging news. Because of our amazing productivity, we’re rich. Of course we can afford
to invest in ourselves and in our children as America did a hundred years ago
with the high school movement. Arguably, we can’t afford not to. Now, you may be thinking, Professor Autor has told us
a heartwarming tale about the distant past, the recent past, maybe the present,
but probably not the future. Because everybody knows
that this time is different. Right? Is this time different? Of course this time is different. Every time is different. On numerous occasions
in the last 200 years, scholars and activists
have raised the alarm that we are running out of work
and making ourselves obsolete: for example, the Luddites
in the early 1800s; US Secretary of Labor James Davis in the mid-1920s; Nobel Prize-winning economist
Wassily Leontief in 1982; and of course, many scholars, pundits, technologists and media figures today. These predictions strike me as arrogant. These self-proclaimed oracles
are in effect saying, “If I can’t think of what people
will do for work in the future, then you, me and our kids aren’t going to think of it either.” I don’t have the guts to take that bet against human ingenuity. Look, I can’t tell you
what people are going to do for work a hundred years from now. But the future doesn’t hinge
on my imagination. If I were a farmer in Iowa
in the year 1900, and an economist from the 21st century
teleported down to my field and said, “Hey, guess what, farmer Autor, in the next hundred years, agricultural employment is going to fall
from 40 percent of all jobs to two percent purely due to rising productivity. What do you think the other
38 percent of workers are going to do?” I would not have said, “Oh, we got this. We’ll do app development,
radiological medicine, yoga instruction, Bitmoji.” (Laughter) I wouldn’t have had a clue. But I hope I would have had
the wisdom to say, “Wow, a 95 percent reduction
in farm employment with no shortage of food. That’s an amazing amount of progress. I hope that humanity
finds something remarkable to do with all of that prosperity.” And by and large, I would say that it has. Thank you very much. (Applause)

38 Comments

  • Reply Bryan Apostol November 29, 2016 at 12:18 am

    Enlightening speech, but a bit too anthropocentric. While it does explain the relationship of quantity of jobs vs the quality of jobs and the disappearance of the the middle class that may rise to a more stratified society, it simply skimps over the major philosophical fallacies that society imposes on us: despite all this abundance, you still have to work, often endless hours higher salaries or not, because thats how society deems what your worth is. Why do we even have to give everyone jobs? "If your jobless, then you must be lazy or stupid" thats what most of us are taught, because none of those "abundance" is free, pretty soon not even clean air.
    A never ending demand for growth for an exponentially increasing population basing its wealth on a finite planet, with ALL human activities causing some form of pollution or other, thats our real problem right now. It's a philosophical dilemma when weve become the victims of our own success. Theres just so many of us, thats whats different. And i think itll be a long time before all countries on earth would have governments who think like Norway or could afford to.

  • Reply Rooh November 29, 2016 at 2:33 am

    This guy fails to take into account that AI is no longer restricted to a single task. Deep learning makes this talk irrelevant. We should stop looking at ways to keep people employed and move toward transitioning to a society in which human labor is unneeded.

  • Reply TheTruthQuest123 November 29, 2016 at 7:08 am

    There arent. If you are not a rich ass kissing republican, or a brain dead stuck my face into my cell phone liberal millenial
    We have a while back turned into a service based economy. THis is bad, and rain is wet. In case its not obvious.
    The reason you people dont see the problem here is cause you dont know shit about history, economics, or can see reality
    You cannot have the American dream, and the strongest economy in the world, when your average american is not only having to work in, but now, she/he has to Compete in order to get a job at Starbucks
    We need manufacturing back , by punishing the rich for outsourcing, cutting subsidies to those that outsource, or even banning robots
    If not, you better have, hold on, listen carefully now..
    BETTER, solution, and something that can be implemented SOONER, rather than later
    We have 55 million people on foodstamps, 100 million on walfare
    This is big problem , regardless if you are making $65k or more per years
    The rest of the country aint..

  • Reply semih oguzcan November 29, 2016 at 2:21 pm

    Resource based economy for a better future.

  • Reply anglekan December 2, 2016 at 4:33 pm

    We will all be retail workers.

  • Reply whatwherethere December 10, 2016 at 8:27 pm

    Automation or not. If you don't democratize the disbursement of the gains you get Saudi Arabia. For all the rest of this lecture he fails to follow this one example that he has of abundance. Do the Saudi Royal family work? No? Well maybe there is a point were abundance makes work unnecessary. Or is the reason that the Saudi Royals don't work has nothing to do with material abundance but social class dominance? What about Qatar, nearly 3x the GDP per capita of the USA and the same Gini number. Do Qataries work?

  • Reply William Shaul December 12, 2016 at 2:05 am

    I don't know, but this chart is contrary to David's premise, isn't it?
    How could he state so different from a statistical data record?
    It appears to be about the lowest since the Mid 70's… What do you think?

    http://cdn.tradingeconomics.com/charts/united-states-labor-force-participation-rate.png?s=unitedstalabforparra&v=201612082156r&d1=19160101&d2=20161231

  • Reply KungFuChess December 12, 2016 at 9:39 pm

    Computers are a recent phenomenon though.. they will most certainly in time replace brain labor just like the machine replaced manual labor.

  • Reply Дмитрий Аверьянов December 20, 2016 at 11:17 am

    So few farmers can feed so many. Amazing. Considering that the food import share estimate for 2013 is 20 percent based on value and 19.4 percent based on volume.

  • Reply Fleck January 3, 2017 at 6:53 am

    He basically got up there and said "Chill, y'all, robots won't take all ur jibs, because, like, nature finds a way, and stuff." Brilliant.

  • Reply movie guy99 January 13, 2017 at 2:26 pm

    Umm could the labor force participation rate gone up like 15 percent since the 1800s because women entered the workforce?

  • Reply Bill Nichols February 25, 2017 at 7:56 pm

    What about the fact that the increase in population does not equal jobs created. A comparison of jobs today to jobs a 100 years ago is retarded. Of course there are more mail carriers than when we had pony express.

  • Reply Bill Nichols February 25, 2017 at 7:58 pm

    Working at Walmart is a place of employment and these jobs throw your labor percentages to the wind.

  • Reply Chris Namaste April 3, 2017 at 11:30 am

    Windows 2000 was reliable for the era. He should use Windows Millennium Edition, Windows Vista, and Windows 8. They all were problem children.

  • Reply Martin Verrisin April 19, 2017 at 6:28 pm

    9:25 – lol nope, don't agree, one answer: AI.

    (he's looking only at the past, and that's why he's wrong)

  • Reply Guus van der Werf May 10, 2017 at 10:24 pm

    One little statistic about fraction of work and a lot of fantasy.

    There are still so many jobs because we do not measure productivity of most jobs. For most companies this does not matter at all. Most organizations are oligarchy or public companies.

    But… since new disruptive techniques will arise about 75% of moest private companies will not survive 21first century.

    And… most people will not believe they will become obsolete. As farmers did. Now laywers and doctors and programmers will have to find a new job.

  • Reply Sam Nicholson May 15, 2017 at 2:20 pm

    why,? probably because the population increased since then!

  • Reply Richard Frank May 18, 2017 at 12:52 pm

    Lots of jobs but no increase in pay for 30+ years

  • Reply Ran Buchnik May 20, 2017 at 8:06 pm

    He's right and will continue to be so – until the AI singularity.
    Don't worry though, that's a good thing.

  • Reply stock fish May 28, 2017 at 9:47 am

    2% farmer in the world, still much food , wow 🙂 that's crazy to figured 🙂

  • Reply Howard Davis June 7, 2017 at 3:22 pm

    Most jobs have been taken over by temp agencies who sell cheap labor without real benefits; This guy is another asshole trying to take our country back-wards.

  • Reply Terrance Pinson July 13, 2017 at 3:42 pm

    I'd like to see someone in the middle class work for 17 weeks out of a year and keep up with their rent and mortgage payments. The only thing enabling quality of life to be so much better right now is loads and loads of debt.

  • Reply Brian Chang, Singapore August 14, 2017 at 6:11 am

    O-ring joker? Get serious man

  • Reply Brian Chang, Singapore August 14, 2017 at 6:27 am

    90% of the middle class did not see a pay Rise over 20 years. The future is worse.

  • Reply Brian Chang, Singapore August 14, 2017 at 6:27 am

    Cashless systems will kill the ATM. Apple Pay will kill the banks.

  • Reply marte thompson August 17, 2017 at 8:50 pm

    ALL machines – including human bodies – need maintenance and repair – creating more work that is more and more complicated.

  • Reply Eric August 20, 2017 at 6:46 am

    Well all you people can now stop worrying, there ARE enough jobs out there, stop being concerned about unemployment, its not necessary.

    But wait, what happens when you receive your 250th rejection? How does that square with our intrepid speaker who asks the question why are there so many jobs? When you are down to your last dollar and 4 mouths to feed …….. these are the realities Mr Autor, why are you pretending otherwise. The only option is for people to have less children.

    I guess Donald Trump was lying when he say he was going to create more jobs, why are jobs on the lips of politicians all the time as they seek to get elected. My guess Mr Autor and to my disgust, is you have only looked in the places that feed your argument.

    There was a time when it took a small army of staff to count out the wages and put the cash in envelopes, now it is done with a computer depositing it into the accounts of the workforce.

    If the nation needs a more skilled workforce it is not going to get it by making it difficult to afford that skill.

    I thought you had something intelligent to say but not so …… never mind

  • Reply Eric August 22, 2017 at 5:26 am

    Too often people have looked at the past and assumed the future will be just the same.

    It is the argument of choice when all else fails. The planet has always had hot/cold cycles, when discussing global warming, but there has never been 9 billion people on earth all wanting cars and electricity before. Now we are told there are plenty of jobs, because there always has been. The speaker is unable to see the effect of robotics and the fact there are 9 billion people.

    The world we live in today is very different to the past, therefor the past is becoming increasing unreliable as a gauge to the future.

    In fact 150 years ago the world was more similar to that of ancient Greece than now.

  • Reply d0n77 November 9, 2017 at 2:24 pm

    systemic issues exist,,schools teach nonsense instead of preparing ppl,if your teaching stuff that ppl know they will never use its a waste,,we waste everything esp potential,by the time ppl graduate or drop out they see the world as a mess and a lot party n get hooked on drugs,,life without meaning and purpose 101,,if ppl dont find purpose by 18 its a systemic issue of ignoring reality,,,its what you get when the ppl at the top and middle either dont understand or dont care enough about healthy society,,,a bunch of i dont care ppl get produced by design,,,by then its nearly too late,,,i watched it happen and most dont even understand when it happened to them,,,,you want proper change?everyone must be included,get same pay,ppl need to find what they like or love by 18 19 years old or they begin to not like the world,,,i havnt even scratched the surface on this n i gotta go soon,,u wanna fix earth then you need meaning,fairness,hope,respect,purpose and ppl will enjoy working more,,,or we can further live in the world now and watch crazy continue to take over and kill for no reason,,what a mess

  • Reply Albir Tarsha November 11, 2017 at 10:27 pm

    I don't believe that there are only two major principles at work here. I have long held that when considering these trends and patterns you must take into account Stein's law. The trends towards infinity cannot continue so what will stop them and when? There are real limits to human, robotic, and AI useful productivity; human greed has limits too.

  • Reply Stevie Gee July 27, 2018 at 1:09 am

    show me the data

  • Reply Deonis September 4, 2018 at 3:40 pm

    Yes, creativity is coming from the way unemployment is calculated. If you are not looking for a job you are not considered unemployed.

  • Reply Wildflower3328 October 14, 2018 at 12:50 pm

    AI will one or two decades from now make such cognitive leaps that it will take those white collar jobs away like it did the middle class blue collar clerical jobs. Lawyers and doctors won’t be saved from those implications. Corporations have one goal: maximize profit and reduce all marginal costs. The USA is a corporate nation. Even hospitals are corporations and they will try and replace expensive doctors and nurses with robots if AI allows it. This guy can’t see it coming because he’s thinking that history will repeat itself. He needs to read about the historical desires of the wealthy elite: and that’s to have free labor. Humans will finally join the unpaid caregivers at home and the only rescue is a welfare fatherly state.

  • Reply Alan Roberts November 3, 2018 at 4:03 am

    There seems to be a finite amount of things i need. But i am a victim of the obsolesance of things. Wether planned or not. New tv, newer car (with a screen in it)., and other new stuff but not really different stuff.
    People dont work because they want stuff. People work because they have become sheep in a horrible world. Nobody appreciates and takes care of things when its just stuff right.
    Many of jobs in america are inventions in and of themselves.
    The entire defense industry alone including the military must account for close to 50% of everything in this country. I mean every little thing. And many more goverment jobs that we could live without a also.

  • Reply Безлимитный интернет January 17, 2019 at 10:58 am

    What would this idle babbler wish to say?
    Bravo to the interpreter into Russian subtitles! 🙂 Very professional interpretation!

  • Reply Mary Myers April 11, 2019 at 5:53 am

    First guess people too lazy to go to work. Yea I won. Idiots your allnuts take away any reason for people to have self worth

  • Reply ddskimmer July 30, 2019 at 1:13 am

    GMO future…how wonderful our food has become! All this progress since the farmer was forced out by big farmer. 500% increase in autoimmune diseases since the advent of GMO's!! AI will fix every thing…we trust AI super computing.

  • Reply moe moe hla August 17, 2019 at 1:14 pm

    The only sensible argument…..regarding automation….well said!!

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