Note to Tom Friedman: Technology Creates, Not Destroys, Jobs

TomFriedman

I should just get a macro for my computer so that when I type “Control T” it writes “Tom Friedman is wrong because” since he so often is, as I pointed out here. But in Today’s New York Times Op-Ed he does it again, only maybe even worse; blaming technology for joblessness.  When will he and others realize this is not the case. He writes that information technology “is more rapidly replacing labor with machines.” Well, if this were true, how does he explain the fact that productivity growth rates were much higher in the last five years of the 1990s than the last five years of the 2000s? And yet, unemployment was much lower in the 1990s period.

He then goes on to quote Davidson’s equally incorrect article in The Atlantic which rightly points to the devastating loss of U.S. manufacturing jobs in the last decade and blames technology. No. As we point out, it was the loss output due to decline in U.S. competitiveness, not automation, that was responsible for the big loss of manufacturing jobs. Manufacturing experienced about the same rate of productivity growth in the ’90s as it did in the 2000s and yet only lost one percent of jobs in the ’90s, but 32 percent in the 2000s.

But in typical Friedman fashion he goes even farther with “analysis by anecdote.” He tells us that there are now iPads that let people order their meals from their table without a waiter. And writes “you ain’t seen nothin’ yet” when it comes to IT automation.

I could write a full report on why Tom is wrong (well actually we did) but suffice to say three things. First, the economic evidence. If Tom had bothered to review it, it is unambiguous that higher rates of productivity lead to more jobs in the medium to long term, not fewer jobs. As the OECD states in a definitive review of studies on productivity and employment, “historically, the income generating effects of new technologies have proved more powerful than the labor-displacing effects: technological progress has been accompanied not only by higher output and productivity, but also by higher overall employment.” Second, the most serious challenge facing the U.S. economy over the next 25 years is the declining worker to population ratio as the baby boomers age. The ONLY way to ensure that either their after-tax incomes don’t go down or retirees expected incomes don’t go down is by seriously boosting productivity, and the single best way to do this is through the use of IT. Tom, you ought to be celebrating the iPad in the restaurant, not engaging in neo-Ludditism. Finally, if we want to raise the living standards of Americans now holding low wage jobs, the best way to do it is to increase, not decrease, automation of these jobs. When a job can only produce 10 dollars an hour in value, there is no way to pay more than $10 per hour. If we can use technology to boost the productivity of many low wage, low productivity jobs, we can pay more for these jobs and workers who move out of these occupations can move into higher value added ones.

In short, it’s time to bury the myth that technology causes job loss and that we should fear it and resist it. It does not. And we should welcome it and encourage it.

 

 

Image credit: Flickr user Charles Haynes

Print Friendly

About the author

Dr. Robert D. Atkinson is one of the country’s foremost thinkers on innovation economics. With has an extensive background in technology policy, he has conducted ground-breaking research projects on technology and innovation, is a valued adviser to state and national policy makers, and a popular speaker on innovation policy nationally and internationally. He is the author of "Innovation Economics: The Race for Global Advantage" (Yale, forthcoming) and "The Past and Future of America’s Economy: Long Waves of Innovation That Power Cycles of Growth" (Edward Elgar, 2005). Before coming to ITIF, Atkinson was Vice President of the Progressive Policy Institute and Director of PPI’s Technology & New Economy Project. Ars Technica listed Atkinson as one of 2009’s Tech Policy People to Watch. He has testified before a number of committees in Congress and has appeared in various media outlets including CNN, Fox News, MSNBC, NPR, and NBC Nightly News. He received his Ph.D. in City and Regional Planning from the University of North Carolina at Chapel Hill in 1989.
  • Gregory Tassey

    From: Innovation Policy Blog [mailto:post=itif.posterous.com@posterous.com] On Behalf Of Innovation Policy BlogSent: Wednesday, January 25, 2012 9:53 AMTo: Tassey, Gregory Dr.Subject: [innovationpolicy.org] Note to Tom Friedman: Technology Creates Jobs, Not Destroys Them<o:p></o:p><o:p></o:p><tr><td></td></tr><tr><td width=”20″></td><td><tr><td width=”610″><o:p></o:p></td></tr><tr><td><tr><td></td><td width=”594″> </td></tr><tr><td width=”16″>Couldn’t be stated better, Rob. If anyone wonders why the American economic engine has ground to a virtual halt, you need only listen to the opinion makers. Tom Friedman states the age-old fear of change. Paul Krugman rants that the U.S. economy does not suffer from structural competitive problems; and, he asserts that all the economy needs is even more fiscal stimulation. Meanwhile, other countries seem to better understand that technology leads to higher productivity, which leads to higher incomes AND through resulting larger global market shares creates higher employment. Why is this basic growth paradigm so difficult to grasp? <o:p></o:p></td><td width=”578″><tr><td></td></tr></td></tr></td></tr></td></tr>

  • James A. Lewis

    But technology does not appear magically and the US has spent the last twenty years dismantling the things that made us a technological leader. Now we hope that the use of incantations will be an adequate replacement for policy and investment (this is a bipartisan issue, by the way, although each party has preferred magic formulae). There’s been a little bit of course correction – people have realized the importance of manufacturing – and that is a positive step, but we haven’t put in place what is needed to stay in the game in a much more competitive international environment, and there are still fundamental misconceptions that lead to ineffective policy. My take on clean energy is that if you decide to build products that no one wants, it’s social policy masquerading as economic policy. CSIS 1800 K Street NW Washington, D.C. 20006 (t)202 775 3247 (f) 202 775 3199 http://www.csis.org/tech/ http://www.twitter.com/james_a_lewis

  • Al S

    Did Mr. Atkinson even read Tom Friedman’s article (or better yet, his book, The World is Flat)? I ask that as his point, in both this article as well as his book, is not that technology is the cause of our lost jobs, but rather iany job loss for our workforce is from being lax in adapting to the new workplace realities and opportunities which our ever increasingly technologized world provides us with. The crux of his article was that if we don’t adapt to these new realities we will both be left holding onto a memory of a world which is no longer existant as well as lose out on riding the wave of benefits which technologies afford us. He’s hardly a Luddite.

  • Rob Atkinson

    responding to Al S, i did read his book. better yet, i reviewed his most recent book for the Washington Post and it definitely has an anti tech view. For Tom, technology destoys jobs. you don’t have to say i don’t like tech to be anti-tech. Raising the fears that tech destroys jobs is the problem

  • Helen McMurphy