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Will your job be replaced by an app?


There is a disconcerting element to estimating the number of new jobs created each month in the United States. Not because the number is difficult to forecast, but rather that there is a perpetual sense of pessimism about the prospects for better job growth in the future.

And as an economist who studies the composition of the labor force and is familiar with how technology can displace jobs, I am frightened by what I see.

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Since the economic peak just before the recession, the US production of goods and services has grown by 5 percent, yet total employment remains below prerecession levels, with many of these jobs lost to technology. A quick look at the Labor Department’s statistics suggests that we should expect more of the same.

A lot of people work in occupations where the value they add to goods and services has changed little over several years, making them ideal targets for programmers’ and engineers’ efforts. You’ve heard of “There’s an app for that”? Well, soon we could hear “There’s an app for you!”

As the United States becomes more of an information-intensive society, companies constantly seek ways to automate labor intensive processes that perform tasks by using the same information repeatedly. This describes millions of jobs across the country.

In 2000, for example, there were 124,000 travel agents who had the most efficient access to all the airline databases. By 2012, only 65,000 travel agents remained as almost everyone can now book their own tickets.

In 2012, the Labor Department noted there are more than 500,000 bank tellers. But banks are aggressively adopting technologies to reduce the time required for each transaction through better automation and video call centers, where fewer tellers can help more customers.

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If these technologies allow each teller to increase their transactions by 25 percent, it doesn’t take a complex economic model to figure out how to forecast bank teller employment.

There are 125,000 switchboard operators, 304,000 data entry clerks, and so on. One can even imagine that some of the 16,000 professional sports officials could be replaced by intelligent video analyses. (Football coaches would have to learn how to argue with video producers.)

It’s very easy to go through the labor statistics and identify more than 10 million workers at occupations where such technology displacement could occur. If just 3 percent of these employees, or 300,000 workers, lose their jobs in a year because of technological displacement, this would subtract 25,000 from the monthly tally of net new jobs created.

Among economists, this increment could be the difference between a genuinely good month of employment growth and a so-so one. And for investors and companies that make decisions based on these assessments of the economy, it could make the difference in whether they invest, hire, or expand.

US companies are becoming very adept at cost cutting. Sophisticated cloud-based technologies, ample quantities of case studies, and generally better management techniques all help companies boost profits by reducing costs. The good news is that this cost cutting is a finite process. Eventually, firms will have to grow the old-fashioned way by identifying new markets, targeting new customers, and making new products that come to market faster.

What needs to happen for workers to parlay this eventuality into jobs? It’s been often said that training in “STEM” disciplines — science, technology, engineering, and mathematics — is critical to finding and retaining good jobs. That’s stating the obvious, but not enough prospective employees understand how to add value in these areas, that is, how to harness new technologies to their existing situations to become better, more efficient, and more productive.

You don’t have to be an engineer to add value, but you do have to understand what your company’s inherent business problems are and how technologists are at work to solve them.

What worked in the past in the workplace is probably not a very good indicator of what will work in the future to get or retain a job. Those job seekers who understand this and act on it will quickly be an addition to the monthly new jobs count.

Doug Handler is chief US economist at IHS Global Insight in Lexington.

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