I think the two areas that are really critical for policy makers but also business leaders, academics, in conjunction should be worrying about number one, how do we actually accelerate technology adoption and commercialization? The problem is really not that we're automating so quickly that we're going to put people out of jobs. The problem is that we need to automate more quickly to actually get the kind of benefits and productivity in our standard of living that we would like to enjoy.
So, the first issue is how do we really unblock that so that companies are making the right investments in technology, building out new capabilities in their supply chains, et cetera. But the second thing, then, which I think is an even bigger concern, is how do we really help the workforce transition? And that's people who are in existing jobs that will be dramatically changed or people who are in locations that need to change.
I'm talking about, as people move from one sector to another, or from one occupation to another or from one skillset to another, how do we help with that? I think it's one of the things, quite frankly, we got wrong with globalization. I think globalization, on the one end, was spectacularly good for economies in terms of driving economic growth and all of those things. And also good for people as consumers in the sense that they had more choice, cheaper products and all of that. But what we didn't think through properly was the implications for workers. And particularly those caught in the dislocations and transitions that happen as those jobs went away or got automated or got taken to other parts of the world or country. We didn't do enough there. So, I think in this case, again, with automation and technology, we need to think through those transition challenges for individuals and as they move from one place to another.
I'm optimistic about job growth if both employers and the government do the right things. I think there is a scenario that you can well imagine where there are fewer jobs and they are all tasks. So you can put together a day's worth of different tasks. Imagine you're driving for a ride sharing service and then maybe you do Task Rabbit and then you do a few little projects. And you can imagine big data platforms that let you find those tasks. But how are you going to build a middle class life?
Well, there most certainly is a role for policy makers to facilitate the transition. But, in my experience, policy makers tend to deal with problems after they've reached crisis levels, not anticipate the problem and head it off. I think the social implications of what's happening in information technology, communication technology, artificial intelligence, robotics, while many of them are very positive, I think many of them are highly deleterious. And I think we're going to create a class of people who are permanently unemployed and unemployable. And we need to figure out how to deal with that.
How are you going to afford a house or a car or school for your children? So, we need to do things around benefits. We need to make benefits portable, for instance. We also really need a different concept of a safety net and a tremendous infusion into education and training to help people adapt as jobs change.
I think there are a lot of very interesting conversations around universal basic income but that is the kind of thing that is going to be debated and discussed over the next 20 - 30 years as this evolution takes place. What concerns me is that when you look at the evolutions that have occurred from a hunter-gatherer society to an agrarian society, from an agrarian society to an industrial society, from an industrial society to a service economy. Those changes have not come without social disruption, right? You know, the first wave of hunter-gatherers, once an agrarian society got formed, got completely wiped out.
The reason this transition is challenging in the short term is not so much the pace of change, but it's actually the pace of the reaction. And those that need to react are actually still quite far behind in figuring out what the right policies are. Now that said, there are a lot of best practices around the world. So, if you look at that type of education system that exists in Finland, if you look at the type of adult retraining and reskilling that's been put in place in Singapore, if you look at some of the new forecasting models that have emerged, we can actually use the very same technologies that are causing some of the disruptions to actually solve some of these problems, to give people the right kinds of skillsets, to predict what will be needed. We can get much better at all of that, but I put a lot of faith in individuals taking action, new businesses around education and reskilling being created, and then a lot smarter regulation being put in place. Without any of that, we are looking at a more bleak future.
I would argue that in the discussion of the future of work, we try to focus too much on what are the new things that we see and think that they will happen perhaps faster than they will. So, the thing that I want to bring attention to is something that is already true today, expense volatility. To just to put a fine tune on it, we can document that most American families are dealing with very high levels of income and consumption volatility month to month. And those don't co-vary. It is not necessarily the case that those months where you have lower income result in months where you have fewer expenses. In fact, they don't co-vary, which means from a vulnerability point of view, Americans are often subject to a month where they might have a dip in income and an unexpected rise in expenses. That causes a lot of vulnerability, financial vulnerability, and a lot of stress and anxiety for a lot of people even if the economy is generally doing okay.
We need to pay a lot more attention to this, to helping people build the financial buffer that will allow them to withstand the volatility that they will likely experience and ways to mitigate the long term impacts, particularly of some of these extraordinary expenses.
Well I think there's a lot of different questions. I mean I think we recognize our inability to predict what will happen in the future. There are certainly some aspects in which these automation technologies allow a lower skilled person to actually have much more impact, which previously needed a much higher skilled person. Now in some ways, you can consider that to be good. Because suddenly someone who was otherwise lower skilled actually, as some people would describe it, now has super powers. They can do more than they ever could before. But there are other effects in which, sometimes the machines will take over work, which was lower skilled, lower wage. And that creates more opportunities that are high skilled and have higher wages. That does require training so that people can develop those skills necessary. So, whether it's being able to maintain a robot rather than do the routine tasks that the robot took over doing, whether it's being able to understand the output of an analytic algorithm rather than do the calculations yourself, sometimes these technologies will actual create work which requires more skills.