Transcripts For CSPAN3 Technology And The Workforce Panel 2

CSPAN3 Technology And The Workforce Panel 2 June 22, 2024

Getting this sort of thoughtful discussion it deserved. I think 15 or 20 years ago, erik and i talked about this when i was a graduate student and erik was a professor and we felt that people werent taking the issue seriously. If anything, i would say people should not panic at this point. And i think you know, there are a number of remarks i could make. I think there are season for some skepticism or at least a a little bit about how fast things are actually moving. And i would think there is a lot of aggregate data that dont suppo support the idea that the labor market or the idea is changing as a dramatic story. So the premium to Higher Education has plateaued over the last ten years. And in fact, we see evidence that highly skilled workers are moving have less rapid career directors and moving into less skills and productivity is not growing rapidly and the unemployment growth weve seen have been in relatively low education, in person serve occupations which has a Technology Element to it. So i would just say that it is easy looking at examples to see an in flexion point but when you look at the aggregate data there is nothing that suggested we are at an in flexion point. The data could be wrong. I have skepticism for thinking things are not changing that rapidly. The second point i want to make is that when we think about how technology interacts with labor markets we think in terms of substitution of labor with machinery and that is a completely natural thing to do because technology is made to do some task that they were doing. But weve been substituting machinery for labor for, you know, as long as we could think of ways to do that. And that is a kind of a first order effect, a mechanical effect that we can automate transportation or calculations or information storage and retriev retrieval. But what is neglected is many activities require a mixture of things. A require creativive and mixture of motor power and dexterity and if those things need to be done together when you make one of them cheaper and more productive you increase the value of the other. So doctors have not become less valuable as medical technology has advanced. They can do more, diagnose more and that makesrnĂ· them more valuable. Ultimately there are three things that sort of contribute to how an aggregate reduction in the cost of one activity effects employment more broadly. One is whether the technology directly substitutes you individually or whether it helps you do one thing so does one thing so you can do something else. So if you think about diagnosing medical testing, physicians can get more information in the course of a day. The second is how elastic is the demand for those services. So if we are so much more productive as medicine, if we could do all of the medicine we did in 1950 in 10 minutes a week and people will be healthier if that was the case given the state of medicine at the time. As we get better at it, people kmum more of it, because there is problems with the Health Care Delivery system but because of the service is of much greater value and demand is elastic. And third, from a labor perspective, it matters how scarce the skill set is that is complemented. It takes training and education to become a doctor and when they become more productive we dont get them at minimum wage because they have to have years of training so they are complemented and the supply moves slowly but that tends to raise the income. So productivity increases lead to growing wages and employment and making jobs more interesting and challenging. But that is not always the case. I dont want to take much more time. But that is on one side of the labor market. On the other we do see growth of work in nontechnical jobs that require generic skills and those are hard to automate. And let me make my final point. A lot of what matters is how rapidly things change. So if tomorrow amazon introduced the 1,000 bezos bot and it came on amazon prime so you could have it by monday, that would be a dramatic advance and we would all buy it. But it would be extremely disruptive because there are people that that is the activity because child and driving and cleaning and cooking and lawn manicuring. But if amazon said were going to have this in 2045 for 1,000, wed be well situated to adjust to that because that is not where we want to be over our longterm career. So it matters how quickly we get there. And i think a lot of the debate is not whether these things will occur but whether were at the second half of the chess point and the Inflection Point and things are doubling from a small number to a large number and doubling again, but would you say the Technology Community and the Academic Community family is effected. And if you talk to the mits they are skeptical but their view is the problems are hard, we are making progress which was not true 30 years ago but were a very long way away. So as andy said and put it well, we live in very interesting times. Thank you. Im sure well revisit those ideas when we have our discussion. So aneesh, im going to turn to you. With the chief Technology Officer you were tasked with using technology and innovation to further our nations goals of job creation, reduced health care costs, protecting the homeland, tall order. But youve spoken very optimistically about the power of technology and innovation to improve our lives often a wide on a wide scale. So im curious to hear how your view of what technology has done skpars to that skpars to that as erik and andy have laid out and ho have you Seen Technology effect sectors, including technology and education and others. Thank you. I have three opinions, all very bullish on the next decade. The first started with my first trip to google. I was the virginia secretary of technology and we were trying to open up Government Data to search enk ipgs to make it more accessible to more people. People were getting information through Search Engines now coming to the url of xyz. Gov. And i saw a globe when i walked in that had a light emitted for every search conducted on goorg and you would get to north korea and it was dark and the stark observation. And large swaths of africa and many parts of the world had darkness. If you think about the american economy, what sectors are on the functional equivalent of that level of darkness as it relates to the impact that the health the internet has had on the sector. Health care, energy and education have not necessarily been plugged into the internet, specially around data sets that have been constrained by regulatory policy. Medical records arent flourishing on the internet and your Energy Usage Data isnt flourishing on the internet. And when you look at the amazing capability and frod prod productivity and you look at a quarter of the gdp and you think the group of the sectors have been completely missing from this revolution and obviously if incentives start to change and data opens up at the same time you might see an explosion of innovation and were seeing that now in health care. We made Great Strides opening updata and connecting medical record systems an more venture capitalists flowing into this sector than you imagined not because they are trying to make the traditional system function better but now the incentives are changing to deliver a different kind of Health Care Delivery system which makes it wide open for entrepreneurs because it is creating new types of jobs never existed before in the health care sector. Not all requires a hpd in physician a ph. D in physics. So category number one is we are now opening up big sectors to the internet age and that will bode well to ensure productivity gains hit them. Second, again when i was virginias technology secretary, the north carolinavirginia border used to be like the worlds hot spot for furniture manufacturing. That was it. And weve gop through a series gone through a series of policy debates about those jobs arent coming back and how do we build a safety net and brought broad band to try to improve the border. And something happened. Manufacturing is cheaper because you no longer have to have the same labor intensity so we can insource many manufacturing jobs in response to china. So ikea opens up a manufacturer plan for furniture. Where . Right in the heart of the border. Sim plame writ the same place written off for the capacity to build furniture and told you have to do Different Things because your life as a furniture person is over because robots as coworkers an automation, you can compete on a footing and weve seeing that insourcing across the country. They are coming back. They are not the same labor as intensive but that is still net positive. And the third opinion is the democracy of entrepreneurship is the most exciting thing ive seen because in the same new york north carolinavirginia border, there were grandparents working in textiles and now theyre Building Designs for clothing that can be 3d prints or the intellectual property can be transmitted over the international all over the internet all over the world and they creating value in that market and they can plug in because of the capital and information. So im fired up about the impact this is going to have over the next decade. Acknowledging that obviously in certain sectors well see challenge. Too bullish, but im very excited. Okay. Larry, well talk to you. Youve been thinking and commenting about this for a long time. You wrote a 2013 npr issue that we are talking about and you talked about inclusive prosperity, the gloel of the commission the goal of the commission to address rising levels of in cam equality and the stagnant wages at the bottom of the distribution. So in your thoughts and views on all of this, what do you see as the longrun implications for the Macro Economy . Thanks, melissa, and thanks for the chance to be here. Ill leave the question of what we should do until later. And so let me focus on diagnosis and make a confession of ignorance and observation and express a worry. Confession of ignorance is this and i think it should apply for anybody who speaks confidently in this area, on the one hand, we have enormous anecdotal and visual evidence of the kind of erik marshals is technology having huge and pervasive effect. Whether it is complementing workers and making them much more product nif in a happy way, that is a possibility. Whether it is substituting them and leaving them unemployed is another possibility that can be debated but in either of the scenarios you expect to be producing a renaissance of higher productivity. So we on the one hand are convinced of the pervasiveness and far greater pervasiveness of technology in the last few years and on the other hand the productivity numbers are dismal. And any fully satisfactory synthetic view has to reconcile these two observations and i have not heard them satisfactorily sec on siled which reconciled which leads me to think we dont have this all figured out. And it is a big problem to believe and if you believe that technology happens with a big lag, and it is only going to happen in the future, that is fine. But then you cant believe it is already caused a large amount of in equality and disruption of employment today. So that is a major puzzle which i think hangs over this subject which i just want to put out there for discussion. Second observation, i think it is a mistake to think of the economy as homogeneous producing something called output as we approach these issues. And there is an aspect that doesnt get enough attention. Which is, sectors through progress working themselves into irrelevant. Let me give you an example. The illumination sector, providing light. It has had a tenfold increase in productivity every decade for a century. Achd we think of it as a trivial sector in the economy. No doubt we could continue to produce ten fold increases in productivity but most of us want it to be dark at night. And more Little League night games than there used to be and parking lots are lit more brightly than they used to be but basically illumination is quasi free and where candle making was an industry in the 1900s, illumination is trivial today. And we need to recognize that when a sector that has Rapid Technology prog regular, but the world can absorb only so much of it, becomes ultimately unimportant in the economy. Is that kind of thing relevant in thinking about the world . Here is a fact that continues to astonish mish and i concede there are a million measurement problems around it but it is a fact what im going to say. In the way they compute the consumers price indices, they were set to be 100 for every good in 1983. Consider two goods today. A television set, and a year at a university. And instead of using a year at a university, i could use a day in a hospital. [ laughter ] the Consumer Price index for the latter two categories is in the neighborhood of 600. The Consumer Price index for the former category is six. So there has been 100fold change in the relative price of tv sets and the provision of basic education and health care services. If anybody is wondering why governments cant afford to do the things they used to do, i just gave you a big hint. If anybody is wondering why most people are going to be working in the future, i just gave you a big hint. If everybody is completely confident that were going to have rapid productivity growth in the future, they should be given pause. Because no matter how fast productivity we have in agriculture or illumination, it doesnt matter for the aggregate economy and increasingly that is becoming true of a larger and larger fraction of what it is that we produce. Third, i was when i was a undergraduate at m. I. T. In the 1960s, there was a whole round of concern about this. Will automation displace all of the employment. And what i was taught as an undergraduate was that basically the people who thought it would, were a bunch ofiddiots and eventually there would be enough demand and it would work itself out and people would be productive and we need transition assistance but it was basically going to be okay. That is what i was tout and bob sullivan taught and everybody else was good afterno was goo. And i believed that and i repeated it often. It has occurred to me that when i was being taught that, about 6 of the men in the United States between the age of 25 and 54 were not working. And that today 16 of the men in the United States between the age of 2554 are not working. And it wont be very different even when the economy is at full employment, by any definition. And so something very serious has happened with respect to the general availability of quality jobs in our society. And we can debate whether it is due to technology or whether it is not due to technology. We cannot debate we can debate whether it is the cause of dependence or whether it is caused by policies that promote dependen dependence, but i think it is very hard to believe that a society in which the fraction of people in choose whatever your most prime Demographic Group is that should be working, whatever that group is, a society in which the fraction of them that are not working is doubling in a generation. And it seems to be an upward trend and it will function well and function well without major social innovations and i would want to leave you with that concern as there, whether you think it is due to technology or whether you think it is due to globalization or due to the maldistribution of political power, something very serious is happening in our society. Great. Thank you. So i definitely want to make sure we return explicitly to the questions that larry raised about policy and where we need to push. But before i do, i want to pick up on the first observation larry made and erik this a great point for you to jump in on. Which is given all of the technology advances, really celebrated, why is it that gdp per capita isnt rising more rapidly . Why is it that median wages are essentially flat and in particular what does that imply about the Impact Technology is having on our Living Standards . Were not seeing it in the numbers. Are we not measuring it appropriately . That is a great question. It is good for larry to bring up and spurred andy and i to work in this stream. People like gordon and others talked about the great stagnation. And at the same time we are seeing great things, andy touched on them. We could spend days talking about the wonders of technology weve seen. So it is a bit of a paradox there. There are a couple of parts of it though that are worth decomposing. The part about Median Income, i dont see that being such a paradox. As i suggested earlier, there is no economic law that said everybody is going to eventually benefit. It could be a small or a big group left behind, 50. So you could grow the pie but some people are made worse off and i think that is a fair description, at least in mie mind, i dont know other people would disagree, about a big part of the story of what is going on. Is people with certain type of skills are in much less demand than in the past in part because of technology and many of them are in the Median Income and david mentioned that and a lot of people have touched on it. The question of overall gdp per capita is more puzzling. Although as i showed you the chart, you dont see as much of a problem in the coupling chart as you do with the media. Whether it is the tea party or occupy wall street, and may there it hasnt been as robust as we expected. It should have been. If technology has been super and more strong and more potent and more everything, than it should have been before, the question isnt whether it slowed down, the question is why didnt these new gale forces of Technology Lead to a big accelerations. So let me address that. So ive spent companies installing these technologies and some of them are quite compete competent. You can install a crp, customer management system, it takes five to seven years for them to roll out and during that process there is organizational disruption and you can do this on a case by case study, including at m. I. T. And elsewhere, trying to roll them out, no productivity gain and decrease while they are being rolled out and we have aggregate data f

© 2025 Vimarsana