Race Against The Machine

Technology’s Influence On Employment and The Economy
This is a summary article on the recent ebook published by the authors about how information technologies are affecting jobs, skills, wages, and the economy.

An Economy That’s Not Putting People Back to Work
Of all the grim statistics and stories accompanying the recent Great Recession and subsequent recovery, those related to employment were the worst.

Recessions always increase joblessness, of course, but between May 2007 and October 2009 unemployment jumped by more than 5.7 percentage points, the largest increase in the postwar period. The grim unemployment statistics puzzled many because other measures of business health rebounded pretty quickly after the Great Recession officially ended in June 2009.

And by 2010, investment in equipment and software returned to 95% of its historical peak, the fastest recovery of equipment investment in a generation. Economic history teaches that when companies grow, earn profits, and buy equipment, they also typically hire workers. But American companies didnʼt resume hiring after the Great Recession ended.

The volume of layoffs quickly returned to pre-recession levels, so companies stopped shedding workers. But the number of new hires remained severely depressed. Companies brought new machines in, but not new people.

Where Did the Jobs Go?