From fantastical videos of human-like robots stacking boxes to reports of computer programs writing newspaper articles, the impact of rapid advances in automation and artificial intelligence on employment are triggering major anxieties among American workers. A seminal study by Oxford academics Carl Frey and Michael Osborne concluded that as many as half of all U.S. jobs are at risk of being replaced by artificial intelligence. Further research has revealed a more complex picture—recognizing that most jobs consist of tasks that could be replaced by technology (such as repetitive movements and data processing) as well as those that cannot (such as problem solving and creativity). So advances in technology won’t simply be about replacing jobs, but rather transforming how work gets done. Thus, the future of work largely will be determined by what opportunities workers have to unlock the productivity-enhancing potential of technology, and whether technologies are designed in ways simply to replace workers, or to enable them to utilize their highest competencies.
The implication is that, since companies are the leading edge in technology implementation in the workplace, their decisions will drive the way in which the next generation of powerful computing technologies will affect workers, leaving public education and training programs to play catch-up. The McKinsey Global Institute, in the context of its research finding that most workers are in jobs where many tasks may be replaced by technology, called on businesses to take a lead in retraining because “business leaders will be on the front lines of automation and will have the earliest and most detailed knowledge about what types of skills they will need as they move to adopt the technologies.”
But at a moment when corporations could take responsibility for training their existing workforces in using new technologies—and spare the national economy the high cost of unemployment—there’s no compelling evidence that they are doing so. In 2015, the Council of Economic Advisers found that the percent of workers who reported receiving employer-paid training dropped from 19.4 percent in 1996 to 11.2 percent in 2008. In 2011, Accenture found that only 21 percent of workers received any formal training in the past five years. While there are several notable examples of companies stepping up their internal training in the past few years, it is not quite yet a trend.
The decline in employer training has been a cause of concern for policymakers, and has spurred proposals for tax incentives for training and changes to accounting rules that require companies to disclose their human capital investments. A new policy proposal by U.S. Senator Sherrod Brown goes further, shifting the responsibility of technology-related training directly onto the shoulders of employers. The bill, introduced on Wednesday, September 11, would require employers to give workers and their representatives notice of the introduction of new technologies that would result in either the loss of employment or a fundamental change in a worker’s job description (legally, a change in position). This advanced notice would give workers (through a union or a committee) the chance to consult with their employers about how new technology would be rolled out. From a business standpoint, such consultations can ensure that the big investment in technology is done in a way that takes advantage of the company-specific knowledge that current workers possess.
Under the bill, if a new technology will indeed eliminate or fundamentally change an individual worker’s current job, the employer is required to give them six months notice of that change, and to take on some of the responsibility for helping a displaced worker transition into a new job. The employer could fulfill that responsibility by paying for that worker to train for a new position at their current (technology-altered) company, including any remedial training needed to meet the minimum qualifications of the new position. If the company is planning to separate an employee because of new technology, they are required to provide severance pay equivalent to six months at the worker’s regular pay level—and they still would be responsible for retraining the worker—in the form of an $8,000 training voucher that the worker could use at a community college or a certified training provider. The thrust of the proposal is to give workers facing technological change a path to a new job at their current company, or a real shot to succeed at a new company with their economic security intact.
The proposal is a promising example of what a proactive response to technological change might look like. It’s wrong to think of technological development as an immutable force of nature that will fundamentally change our economy, with government being left to ameliorate the negative consequences. Rather, technology is something society can choose to shape in ways that maximize social good, through regulation. Importantly, there’s evidence that the current wave of technology is exacerbating the divide between so-called winners and losers in society, given the vast amounts of wealth that can be made through relatively small capital and labor investments. MIT authors Eric Brynjolfsson and Andrew McAfee provide, for example, the comparison of Kodak and Instagram, two billion-dollar photo companies of the twentieth and twenty-first centuries, respectively. Kodak in its heyday required thousands of employees and coordination with brick and mortar retail locations to operate; Instagram needs only a handful of workers by comparison. In this type of economy, where the rewards are increasingly shared only among a small circle of investors at the top, we need policies that require these technological winners to address the financial challenges facing the rest of the us. And, in an era of growing federal budget deficits and strained state finances, there’s a need for policies that don’t require further public spending.
The proposal also calls attention to the important need for policies around severance pay. Under current federal law, employers are required to give advance notice for layoffs, but have no requirement to pay severance. Most recently, Toys ‘R Us workers successfully petitioned bankruptcy courts to require private equity firms that had contributed to the firm’s bankruptcy to pay out severance, and inspired state legislatures in New Jersey to propose a requirement for severance pay in certain situations. Ohio is also debating ideas that would require severance when a company that had received large economic development subsidies closes up shop. These proposals recognize the need to ameliorate the economic and social consequences of job elimination, and the benefit of providing a disincentive to layoffs. In this example, the right to severance pay could give employers an extra incentive to retrain and retain their workers in the face of technological change.
Rapid technological change, especially automation and artificial intelligence, trigger major fears about economic and employment stability. The best response to the threat of technological unemployment is to prevent it. With companies still relying on human ingenuity for a competitive advantage, there are ample reasons for them to retool their existing workforce to make the most out of new technologies—and a real argument to make such training a requirement under law.