Wednesday, January 7, 2015

Technology May Render Millions of Jobs Obsolete

Job-reducing technological innovations will affect education, health care, government, and even transportation. For example, will we still need so many teachers in the decades to come if the cream of the profession can produce increasingly sophisticated online courses that millions of students can take? If not, how will all of those former teachers earn a living? Governments, too, are shedding labour—particularly governments burdened by high deficits and debts. And, by transforming how services are provided to the public, the e-government trend can offset the employment losses with productivity gains. Even transportation is being revolutionized by technology. In a matter of years, driverless cars—courtesy of Google and others—may render millions of jobs obsolete.
And, of course technological innovation that is capital-intensive and labour-saving is one of the factors—together with the related winner-take-all effects—driving the rise in income and wealth inequality. Rising inequality then becomes a drag on demand and growth (as well as a source of social and political instability), because it distributes income from those who spend more (lower- and middle-income households) to those who save more (high-net-worth individuals and corporate firms).

 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics
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