David Autor, the Ford International Professor in the MIT Department of Economics, is pictured here after winning the Heinz 25th Special Recognition Award for research on labor. (Source: MIT News Office/photo by Peter Tenzer)

AI Shows Signs of Boosting Middle-Class Jobs While Threats to Higher Levels Increase

MIT’s David Autor, a leading labor economist, believes that the age of AI has the potential to rebuild the middle class. While technology has been a force for greater inequality in recent decades, Autor sees a future where AI can create numerous good jobs for those who have been left behind. Although AI will disrupt the job market, with the right policies and efforts, he thinks a more prosperous and equal economy can be achieved.

Autor’s research shows that computers have been beneficial for high-income, college-educated workers, but not for everyone else, leading to “job polarization.” However, the age of AI could be different, potentially benefiting less skilled and non-college-educated workers. Autor envisions using AI to reinstate the middle class, which could serve as a rallying cry for this new technological era.

It is important to note that technological change was once a force for equality, helping to create and expand the middle class in factory jobs. However, this process began with disruption and misery, and it is possible that the positive economic future Autor envisions may follow a similar path. Prior to the Industrial Revolution, skilled artisans were the masters of production, making a good living through their craftsmanship. Factories destroyed their livelihoods.

Jobs on the lower end of the pay spectrum continued to grow, but they did not see the same work benefits from new technology. Many “middle-skill” jobs, such as those in manufacturing and offices, were killed off by new technology, forcing workers into lower-paying service industry jobs. Autor argues that computers could only do tasks with explicit, step-by-step instructions or formal rules, putting many middle-skill jobs on the chopping block. However, Autor is bullish on the future of job growth, as he saw the limitations of computers as a big security fence protecting a range of jobs at both the upper and lower ends of the labor market.

“The work of lawyers, doctors, Wall Street traders, corporate executives, professionals of all stripes — so-called ‘knowledge workers’— became much more productive and valuable with computers. They benefited tremendously from being able to send emails, create digital spreadsheets, search the Internet, create new apps, trade stocks and information instantaneously all over the world. Computers profoundly enhanced this elite group’s ability to do their jobs, and because their jobs required years of education and hard-to-get knowledge and skills, the influx of other people to do them was relatively slow. That meant these professionals just kept getting paid better and better.

“Meanwhile, jobs on the lower end of the pay spectrum, for janitors, fast food cooks, cashiers, dishwashers, security guards, and so on, continued to grow a bunch — but they did not see the same work benefits from new technology. Even worse, many of those ‘middle-skill’ jobs — the ones created in industrial era that helped build the middle class — were killed off by new technology. Many jobs in manufacturing were taken over by robots. Other coveted jobs in offices — jobs that once enabled non-college-educated workers to get their foot in the door at profitable companies — were automated away by computer software. Many of these workers were forced out of well-paying occupations and into lower-paying ones in the service industry.”

The impact on the labor force could be positive, but the use of AI by bad actors could be a major negative, according to Autor. Still, he’s optimistic about the future of jobs.

“In my mind, I actually think the irony is that the labor market is the least scary part of this at the moment,” Autor says. “I’m actually much more scared about the impact of AI on everything else.”

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