You wouldn’t think that policymakers need to be reminded that technological progress raises living standards and creates new (and better) employment opportunities. Alas, some comments President Obama made in a speech last week seemed to link technology to job losses. “There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers,” he said. “You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.”
In an essay in today’s Wall Street Journal, one of my Mercatus Center colleagues Russ Roberts, a professor of economics at George Mason University, brilliantly deconstructs this logic and points out why technology doesn’t destroy jobs:
Somehow, new jobs get created to replace the old ones. Despite losing millions of jobs to technology and to trade, even in a recession we have more total jobs than we did when the steel and auto and telephone and food industries had a lot more workers and a lot fewer machines. Why do new jobs get created? When it gets cheaper to make food and clothing, there are more resources and people available to create new products that didn’t exist before. Fifty years ago, the computer industry was tiny. It was able to expand because we no longer had to have so many workers connecting telephone calls. So many job descriptions exist today that didn’t even exist 15 or 20 years ago. That’s only possible when technology makes workers more productive.
Read the whole thing. Great stuff.