No Adult Left Behind: Automation, Job Loss, and Education Policy

Artificial intelligence forces important education policy questions into the national landscape. Automation has only gotten cheaper and more prolific through the introduction of machine learning and artificial intelligence. Self-check-out and autonomous driving have taken center stage in the labor automation discussion but just around the corner is a wave of fully automated coffee shops, $3/hour robotic fry-cooks, and automated warehouse associates that pose a threat to the most common jobs in the United States. According to a McKinsey & Company study, 45 million people or around a quarter of the workforce will lose their job to automation by 2030. Automation and artificial intelligence pose the single greatest threat to the American labor market today.

As with other great jumps in technology, labor demand shifts away from jobs that have been replaced by the technology towards workers who can serve as complements. Harry J. Holzer, Professor of Public Policy at Georgetown University, echoes this claim and argues that since the 1980s, automation has led to labor market inequalities caused by increases in compensation to workers who are complementary and decreases in compensation for those who have been replaced. Complementary skills to new technology often require additional training. Sometimes proper use of new technology requires further formal education. The rising cost of education and ever decreasing cost of automation only contributes to the impending labor displacement and the responsibility is on the government to produce a solution.

Two education-based policies look to address the impact on automation. The first is described by Dr. Holzer which calls for a change in existing education policy where K-12 and post-secondary schools teach communication, analytical, and creative skills that allow future workers to act as complementary to new technology. This would give workers the skills needed to succeed in an automated workforce without necessarily attending college. The second would be similar to the significant investments in public education in the early 1900s and late 1940s with the push for universal high school education and the G.I. bill, respectively. Investments that lead to decreased costs of obtaining a college degree incentivize and allow future workers to gain the skills and experience needed to succeed in the modern workforce that weren’t required even a decade earlier. Compared to the shift in existing education, federal investments towards post-secondary education provide a more realistic, effective, and proven solution. From a philosophical standpoint, reducing obstacles to advanced education and empowering individuals may be more favorable than altering existing programs. Moreover, it is important to note that in the United States, primary and secondary school curriculums are established at the state level.

This limits the potential for coordinated and impactful implementation and raises difficult questions around what a curriculum shift towards communication, analytical, and creative skills would look like and if it would be sufficient to combat automation. Supporting the case for investments in post-secondary education is convincing evidence from Fabian T. Pfeffer of the University of Michigan that the attainment of a college degree plays a key part in the growing income inequality gap. He argues that the completion of college leads to greater lifetime wages and that this completion of college and increased wages leads to an increased likelihood of following generations in the family completing college. A policy around investments that decrease the cost of entry to the market of post-secondary degree holders, which is becoming increasingly required in today’s job market, not only incentivizes and provides a path for future workers to gain the skills needed to succeed in the modern workforce, but also directly combats the income inequality driven by the labor demand shifts associated with technological jumps. In his farewell address, then-President Barack Obama stated the next wave of economic dislocations as not coming from overseas but from the relentless pace of automation that will make a lot of good middle-class jobs obsolete. Without addressing the imminent impact of automation and artificial intelligence on the American labor force, our country will face increases in labor market polarization, persistent income inequality, and a large population of displaced undereducated workers. Yesterday’s education landscape is inadequate for today’s labor market and policy solutions need to be proactive, modern, and encompassing. This can be most effectively achieved by federal investments in post-secondary education that increase the accessibility and incentives for Americans to obtain the necessary skills to thrive in the modern workforce.

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Pfeffer FT. Growing Wealth Gaps in Education. Demography. 2018 Jun; 55(3):1033-1068. doi: 10.1007/s13524-018-0666-7.