4 possible futures for US workers in 2040
By James Pethokoukis, American Enterprise Institute
My colleagues Mike Strain and Kevin Hassett outline what the next 25 years might look like for American workers. Here are some excerpts from their essay:
1) Workers will live and work longer, perhaps much, much longer. If you subscribe to the lump of labor fallacy, then you would think that these older workers would take jobs away from younger workers. But we doubt that will happen—older workers will have more income, consume more goods and services, drive up demand, and create more jobs for younger workers in the process. But all may not be well.
Twenty-five years from now, there may be a good number of workers in their 50s waiting for their 75-year-old boss to retire so they can advance to the next level of their career. What will this do to morale? What will it do to the internal culture of organizations for jobs to become permanent?
2) The workplace itself will be less and less relevant to the organization of society. Applications such as Uber have already made it much easier for workers to be matched to those who demand their services in real time and on their terms. You might set an income target for yourself: “I want to make $50,000 dollars this year.” One day you sell your labor as a taxi driver. The next day, you wake up and decide you’d like to do some programming, so you log onto a job board and bid on a project. You work on that project for a month, and then decide to take 2 weeks off. When you feel like working again, you pick another task. Task is the key word here. You perform tasks, and you receive income. But you work for yourself.
3) Today a robot can deposit your checks and give you cash. Next year a robot will be able to pilot your car down the highway. Twenty-five years from now, what might robots be able to do? Perhaps much, much more. Today, rudimentary robots, such as the VGo, allow individuals to remotely interact with distant places. Some scientists have already attended academic conferences remotely via robot. Intelligent robots will likely take over many everyday tasks. Your heart surgeon will still have a beating heart—though she will likely be assisted by a tin man. The same will likely be somewhat less true of lower paying occupations. Today robots can’t clean office buildings after hours, but in the year 2040 they might be able to.
4) And in the year 2040 we will probably still be on what economists call a “transition path.” Technology will still be destroying and creating occupations at an unusually rapid clip. The winners in this process will win big, and the losers will face much hardship. A central challenge for public policy will be mitigating the damage and helping individuals to build the skills needed in the new economy. But these advancements mean that machines will offer increasingly abundant and inexpensive labor. Society will, accordingly, be much wealthier than it is even today. If all goes according to plan, there should be plenty of resources to assure that lesser skilled workers are not left behind.
So a portrait of an America, a generation hence, that is neither hellscape nor utopia. Technological advances have created neither unlimited abundance nor mass unemployment. Instead it is an economy of challenges and opportunities. If you are smart, skilled, and willing to hustle, you’ll do pretty well.
But this is not Donald Trump’s or Bernie Sanders’ 1960s America of lifetime employment in manufacturing, retiring in late middle age with a fat company pension. Nor is it a world where there is little role for government other than keeping taxes low and regulation light. In a (hopefully) dynamic economy of increased creative destruction and churn, effective education and targeted redistribution will be more important than ever, as the authors indicate. Hopefully we’ll do a better job with automation than we have with trade. But to me at least, this is a future to be welcomed, not feared — as long as we prepare for it.