As machines replace workers, middle class struggles to keep up

The cyclical relationship between jobs and technology has long helped shape the world’s modern economy. New technologies replace workers, who then find new jobs in another sector created by a different technology.

Technology advances and the process continues.

“Technology’s always been creating jobs, and it’s always been destroying jobs,” said Erik Brynjolfsson, a professor at M.I.T.’s Sloan School of Management. “It’s part of our economy.”

But Brynjolfsson worries that in recent years, innovations in technology have destroyed more jobs than they’ve created. It’s the topic his newest book, “Race Against the Machine.”

Co-written with fellow M.I.T. professor Andrew McAfee, the book argues that even as the economy recovers, the number of jobs will not increase because of technological innovation and globalization.

Brynjolfsson said about 90 percent of workers labored in the agriculture sector in the 1800s. But because of the Industrial Revolution and other advancements, that figure has since dropped to two percent.

“This time, however, the pace of job destruction as digital technologies, in particular, automate routine tasks is happening a lot faster,” he said. “The job creation side of the equation isn’t keeping up.”

Companies have begun to use technology in a wide variety of fields, including tech support, warehouse operations and call centers. Even the legal profession may not be safe because of new tools that do much of the discovery work often assigned to young associates. 

Brynjolfsson points to Watson, IBM’s super computer that beat out its human opponents on the TV show Jeopardy in 2011, as one example of digital technology’s potential. Now off the game show circuit, Watson has excelled during stints in a tech support call center. It has even worked on Wall Street and in medical centers.

Technology’s rapid advances are certainly impressive. But many innovations are pushing aside middle class workers, making for serious structural changes in the economy.

“Think of a tax preparer that now has to compete with Turbo Tax, or payroll clerks or travel agents,” Brynjolfsson said. “All those types of jobs have really been hit the hardest and have fallen tremendously.”

He says the middle class faces considerably more risks than either extreme. The median wage for the middle class is lower than it was 15 years ago.

People at the top of the income ladder have seen their earnings soar, but what Brynjolfsson finds the most interesting is the resilience of low-wage workers.

“Gardeners, barbers, people who do physical work that’s non-routine — they’ve actually done OK,” he said. “They haven’t been automated as quickly as those people in the middle of the income distribution. It’s serious job polarization.”