Employees work at an assembly line in the Toyota manufacturing plant located in Chachoengsao province, east of Bangkok. Mr. Siu thinks jobs have been taken away by automation, more than by outsourcing. While some manufacturing jobs have clearly gone overseas, “it’s hard to offshore a secretary.” CHAIWAT SUBPRASOM/REUTERS
The American labor market and middle class was once built on the routine job–workers showed up at factories and offices, took their places on the assembly line or the paper-pushing chain, did the same task over and over, and then went home.
New research from Henry Siu at the University of British Columbia and Nir Jaimovich from Duke University shows just how much the world of routine work has collapsed. The economists released a paper today, published by the centrist Democratic think tank Third Way, showing that over the course of the last two recessions and recoveries, a period beginning in 2001, the economy’s job growth has come entirely from nonroutine work.
To derive this data, Mr. Siu and Mr. Jaimovich classified jobs by whether their tasks are routine or nonroutine and also whether the work is cognitive or manual. Examples of routine manual jobs in their classification system include rules-based and physical tasks, such as factory workers who operate welding or metal-press machines, forklift operators or home appliance repairers. Routine cognitive jobs include tasks done by secretaries, bookkeepers, filing clerks or bank tellers. Nonroutine manual jobs include occupations like janitors or home-health aides. Finally, nonroutine cognitive jobs include tasks like public relations, financial analysis or computer programming.
While many jobs have a mix of routine and nonroutine tasks, the basic classification that Mr. Siu and Mr. Jaimovich use is clear, and the results when jobs are sorted along these lines are striking. In the most recent recession, routine jobs collapsed and simply have not recovered, with employment in both cognitive and manual jobs down by more than 5% if the tasks are mostly routine.
“Historically these occupations rebounded,” Mr. Siu said. “It suggests a startling fundamental shift in the way the labor market is behaving.”
In recessions of the 1960s and 1970s, routine jobs would fall during the recession but quickly snap back. But after the recession in 1990, something changed. Routine jobs fell and, as a share of the population, never recovered. In the recessions in 2001 and in 2007-09 they fell even further. The snapback never occurred, suggesting that many firms began coping with recessions by scrapping tasks that could be automated or more easily outsourced.
For his part, Mr. Siu thinks jobs have been taken away by automation, more than by outsourcing. While some manufacturing jobs have clearly gone overseas, “it’s hard to offshore a secretary.” These tasks more likely became unnecessary due to improving technology, he said.
In the late 1980s, routine cognitive jobs were held by about 17% of the population and routine manual jobs by about 16%. Today, that’s declined to about 13.5% and 12%. (The figures are not seasonally adjusted and so are displayed in the chart as 12-month moving averages, to remove seasonal fluctuations).
Mr. Siu and Mr. Jaimovich see no reason the trend would abate. “Many of the routine occupations that were once commonplace have begun to disappear, while others have become obsolete,” they write. “This is because the tasks involved in these occupations, by their nature, are prime candidates to be performed by new technologies.”
But they are not among the labor market’s pessimists who fear that robots will render humans obsolete. Their work shows the economy has continued to generate jobs, but with a focus on nonroutine work, especially cognitive. Since the late 1980s, such occupations have added more than 22 million workers.
“Technological progress has only done wonders for human standards of living,” Mr. Siu said. “It’s really hard to say in the long run that technology is immiserating and I’m certainly not one of those people who is a technological pessimist. We’ll do what we’ve always done. Human skills will adapt. We’ll move toward our comparative advantage.”
Even as robots become more skilled at more complex tasks, for decades to come it will be the province of humans to program and manage these machines. Many more jobs have critical elements that are creative, interpersonal, social and persuasive.
Jim Kessler, the senior vice president for policy at Third Way, said he believes the lesson for policy makers is clear.
“There’s a debate going on right now–it’s certainly going on within the Democratic Party–which is does human capital matter?” he said. “This paper says human capital really does matter. The recessions are hurting those the most whose skills can be easily automated away.”
Mr. Kessler sees two policy responses as critical: First, to improve the quality and availability of college and job-training programs to focus on raising the skills of the workforce so that more people are positioned to benefit. And second, when there is a recession, to respond aggressively because the labor market no longer snaps back.
These responses may do little to arrest the climb of the wealthiest 1% of Americans who have driven so much of the rise in measurements of inequality, but they could help the other 99% avoid falling behind.