Should-Read: Barry Eichengreen: Two Myths About Automation

Should-Read: Barry Eichengreen: Two Myths About Automation: “Robots, machine learning, and artificial intelligence promise to change fundamentally the nature of work…

…Everyone knows this. Or at least they think they do… [that] more jobs than ever are threatened… that previously safe jobs are now at risk…. All jobs, even those of doctors, lawyers, and professors, are being transformed. But transformed is not the same as threatened. Machines, it is true, are already more efficient than legal associates at searching for precedents. But an attorney attuned to the personality of her client still plays an indispensable role in advising someone contemplating a messy divorce whether to negotiate, mediate, or go to court. Likewise, an attorney’s knowledge of the personalities of the principals in a civil suit or a criminal case can be combined with big data and analytics when the time comes for jury selection. The job is changing, not disappearing. These observations point to what is really happening in the labor market. It’s not that nurses’ aides are being replaced by health-care robots; rather, what nurses’ aides do is being redefined. And what they do will continue to be redefined as those robots’ capabilities evolve from getting patients out of bed to giving physical therapy sessions and providing emotional succor to the depressed and disabled….

The coming technological transformation won’t entail occupational shifts on the scale of the Industrial Revolution, with its wholesale redistribution of labor between the agricultural and industrial sectors. After all, the vast majority of Americans already work in the service sector. But it will be more important than ever for people of all ages to update their skills and renew their training continuously, given how their occupations will continue to be reshaped by technology. In countries like Germany, workers in a variety of sectors receive training as apprentices and then over the course of their working lives. Companies invest and reinvest in their workers, because the latter can insist on it, possessing as they do a seat in the boardroom as a result of the 1951 Codetermination Law….

So here’s an idea. Instead of a “tax reform” that allows firms to expense their capital outlays immediately, why not give companies tax credits for the cost of providing lifelong learning to their employees?