The rise of artificial intelligence has given new urgency to a centuries-old anxiety.
Ever since the Industrial Revolution, people have worried that technological advancement would leave them jobless. But while the breakthroughs of the past 150 years merely reduced the number of workers necessary to complete a given task, new AI technologies have the potential to replace humans entirely, in jobs as varied as customer service, truck driving, and food preparation.
It's no wonder that a 2017 Pew Research Center report found that 72% of Americans are worried about robots replacing us at work.
Fortunately, many of the leading economists say there's no need for us to panic. Some think it's too early to tell whether new technology will lead to a radical reduction of the workforce. Others believe that even if unemployment does rise, our governments will be able to develop solutions that allow workers to continue living happy, dignified lives.
Either way, advanced AI is likely to be far less of a threat than pessimists suggest.
The future of robots at work remains uncertain
For all the talk of a coming AI revolution, earlier periods of technological development were not necessarily accompanied by a rise in unemployment. In fact, new AI advancements may mean more jobs, not fewer.
Christopher Pissarides, a 2010 Nobel Laureate and London School of Economics professor, says that new technologies may make certain jobs obsolete, but they also create jobs for people who can harness them. For example, the introduction of cars eliminated work related to maintaining carriage horses, but it also created a larger number of higher-paying jobs in the burgeoning auto industry.
More recently, unemployment is the lowest it's been in decades, even as robot sales continue to grow. According to a report from the Robotics Industries Association, North American companies ordered 16,488 robots in the first half of 2019, up 7.2% year over year. In combination with low unemployment figures, this may indicate that companies are using robots to make their workers more productive rather than replacing them outright.
Government's role in how AI shapes the labor market
Of course even if an AI-powered productivity boom leads to mass layoffs, society would still have ways to take care of people and prevent the extreme inequality that often leads to social strife.
Indeed, the 2001 Nobel Laureate economist Michael Spence notes that highly unequal societies lead to wasted productivity and failures of social and political cohesion.
Many economists believe a robust social safety net will be crucial to preventing this sort of inequality in the event of large-scale automation. Some have even suggested more radical interventions that prevent workers from relying on wages as their primary form of income. In 1977, Nobel Laureate James Meade devised what he called a "social dividend" that would pay a country's citizens a portion of the profits that were created by new, highly productive technology.
"You thereby could design a society where the wage rate is rather low, but people's incomes are not low, because they all have a social dividend, they all have a partial benefit from the big profits that are being made on the robots," he says.
James Heckman, a Nobel award winner in 2000, believes even if governments offer wage subsidies, people still have the opportunity to work. In the past, he says, large government welfare programs have backfired by creating low-income neighborhoods where most of the residents did not work. This resulted in higher crime rates, pervasive joblessness, and limited economic opportunities.
Instead, he favors giving displaced workers a subsidy to continue doing the jobs they had been doing prior to the advent of new technology. This way, governments would be able to offer people the dignity of work without suffering a loss of productivity
"The last thing you want to do is create groups of people who are outside society," Heckman says. "We want to engage people. We have to be a little more creative, but I think we want to make a society that includes everybody."
On the 50th anniversary of the Nobel award in economic sciences, it's a good bet that the next generation of Laureates will work to develop their own solutions to this very same challenge. Many of them can be found in Nobel Perspectives, the largest online repository of interviews with Nobel Laureates, created by UBS.
AI could change how we think about work — and that may not be a bad thing
Contrary to Heckman's perspective, other economists believe that AI's biggest influence may be that it causes us to deprioritize the role of work in our lives.
Right now, many of us draw a great deal of our life's satisfaction and meaning from our careers, and our jobs are crucial to informing our identity and how we feel about ourselves. The 1987 Nobel Laureate economist Robert Solow points out that if someone asks "what do you do?" at a dinner party, they're asking what you do for work, not what your hobbies are.
But there's no reason it has to be this way forever. In 1930, the famed economist John Maynard Keynes predicted that technological advancement would enable us to produce the same amount of goods and services in a fraction of the time, allowing his grandchildren's generation to have 15-hour workweeks and plenty of leisure time.
Solow, too, envisions that faster, more productive machines may one day allow us to shift our focus from our work and define ourselves instead by our hobbies and relationships.
"I don't think it's a biological necessity that you get your identity from your job," Solow said. "Maybe in 100 years we will all be taking care of each other rather than producing goods and services, and the robots will do that. Let them."
For more insights on how economics is integrated into everything in life, visit UBS's Nobel Perspectives, where you'll find the stories of the brightest economic thinkers of our time.
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