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

Despite the introduction of automated teller machines (ATMs) 45 years ago, the number of human bank tellers in the US has doubled. Many inventions were designed to replace human labor, but the fraction of US adults employed is higher now than 125 years ago. This poses a paradox: why do so many jobs still exist if machines increasingly do our work?

The first principle explaining the persistence of jobs is the 'O-ring principle.' ATMs reduced routine teller tasks, but banks opened more branches, and tellers shifted to more cognitively demanding roles like sales, problem-solving, and customer relationship building. Automation of some tasks increases the importance and economic value of complementary human skills like judgment, creativity, and expertise. The Challenger disaster's O-ring is a metaphor: improving one link in a chain increases the value of all other links, especially human ones when other tasks are automated.

The second principle is 'never get enough.' While technology can eliminate jobs in specific sectors, like farming, it doesn't eliminate jobs across the entire economy. Automation frees up time and expands possibilities, leading to the invention of new products, services, and industries that capture human attention and demand, fueling new forms of labor. Human desires are insatiable, driving continuous innovation and new job creation.

While there will be jobs, the challenge lies in how wealth is used and the quality of these jobs. Automation creates wealth, but how it's distributed depends on societal institutions. The labor market is experiencing 'employment polarization,' with robust growth in high-education/high-wage jobs and low-skill/low-wage jobs, while middle-skill/middle-wage jobs are shrinking. This threatens to create a more stratified society.

Historically, societies have overcome similar challenges. The 'high school movement' in the early 20th century in the US, which provided universal secondary education, transformed a largely agricultural workforce into a skilled industrial one. This investment in education and skills proved crucial for harnessing technological prosperity and preventing mass unemployment. We are rich enough to make similar investments today.

Predictions of job elimination due to automation have a long history of being wrong. Human ingenuity continually finds new applications for technology and creates new roles. The future of work is not decided by machines or the market alone, but by our collective choices and the institutions we build. Investing in education and human potential is crucial to ensure that technological progress leads to shared prosperity.