Innovation and Job Loss in America: Why Do We Always Ignore Our History?

I don't know exactly how, but sometime within the last year I found myself added to the History Facts daily email distribution list. Normally I can't unsubscribe fast enough to email distribution lists that I didn't intentionally sign up for, but this one has without a doubt become one of my favorites. I absolutely love it, I cannot recommend it more, and I feel lucky to have stumbled upon it. It's range and depth are both incredible, which is not easy to do.

This week, there was an email that was highlighting "6 Jobs From the 1950s That Barely Exist Today." It was six great examples of commonplace jobs in 1950s America that were now basically gone. They were as follows:

• Telephone Switchboard Operator

• Milkman

• Elevator Operator

• Typist

• Motion Picture Projectionist

• Gas Station Attendant

Its fascinating to learn how big some of these occupations were at one point. In 1950, almost 1% of the country worked as a switchboard operator for Bell System alone, and if you include operators working in private settings like offices, hotels, etc. that jumps to over 1.34M, or roughly 3% of total US employment in 1950 of 43.5M. Typists (otherwise known as secretaries or jobs akin to that) were even more significant, with 1.7M people working in that capacity at this time (this is almost 4% of total employment). Today, for perspective, the country's entire nondurable goods manufacturing workforce consists of about 3.3% of total employment. Typists and switchboard operators going away should have been a big deal (particularly for women), but as we'll see in a moment, it really wasn't.

America's elevator operators of 90,000 at that time seems small by comparison at only 0.2% of the workforce, but consider that today, 0.2% of the workforce works at convenience stores, department stores, in beverage manufacturing, in iron and steel manufacturing, or at museums, art galleries or other historical sites. While department stores feel like the next to die out on this contemporary comparison list, none of these job occupations are insignificant, and if any of them were to vanish tomorrow, we would not only likely be confused about what replaced them, but also where that many people were going to turn to for work. Over time, however, new technologies and innovations basically decimated the occupations that were so much more common in the 1950s. But do we really want to go back to the pre-refrigeration days so that we can save the milkman's job? Yet replace milkman with a more contemporary job like a bookstore worker or a coal miner and you're bound to have people not only lamenting the demise of that occupation, but to advocate getting the government involved in saving it to keep these folks employed.

Americans are not very good with history, but as someone who loves history, I've realized that this is sometimes actually a good thing. We're a forward looking, future-oriented people. Despite our current pessimism, we're among the most optimistic people on the planet when push comes to shove. But when it comes to innovations in the market, Americans are particularly bad about learning lessons from the past. We constantly get spoked by the future innovation boogeyman, and we seem to forget the lessons of the milk man and the switchboard operator that should otherwise provide us comfort about the future. While innovation in the market might breed unemployment in certain isolated instances, it has never led to mass or even significant unemployment. Consider the chart below. There is no example in the last 75 years where unemployment went up in a significant way without a recession (grey bars). Even temporarily, this has never happened. Business cycles and recessions lead to unemployment: not innovation.

We love to talk ourselves into the "this time will be different" argument, but there's simply no reason to think this is the case. We simply have too many examples of this from our past to buy into this flawed logic. What happens with innovation is one person's new development (let's call them Innovator #1) leads to greater income for that innovator and for the industry that benefits from that innovation. It also will often lead to jobs being eliminated, as it did with the elevator or switchboard operator, the motion picture projectionist, or the milkman. But that new extra income doesn't just sit idle and collect dust. Rather, it gets recycled back into the system in the form of new ideas to invest in. Innovator #1's newfound wealth almost always gets invested somewhere else, and almost always, these new ideas require new people to help bring to life. The people who might have lost their job from Innovator #1's invention often get hired by Innovators #2, 3, or 4. People might lose their jobs to novelty then, but they gain new ones because of novelty too, and usually pretty quickly (if they didn't, we'd likely see more unemployment when large innovations like the internet happen). It turns out our culture of innovation is the great offensive rebounder of American society. It might not be ideal to miss a shot a shot we used to be comfortable making, but innovation always gives us additional chances to make a basket again, and usually pretty quickly.

Artificial Intelligence ("AI") is the next brick we have to climb in our seemingly insurmountable wall-of-worry. Will AI cause joblessness in some cases? Almost certainly. Will it lead to mass unemployment like the doomsayers forecast? Almost certainly No. "AI" has and will likely further become "greenwashed," where everyone tries to say their product is "AI based", just like everyone in the food industry now tries to paint their products as "NOSH" (Natural, Organic, Specialty, Healthy). It will therefore become more and more difficult to identify what the heck AI even is, and before long, we might have to use Justice Potter Stewart's approach to obscenity to define it: "I know it when I see it."

Regardless of how we ultimately decide to define AI, you can rest assured that industries will complain by the dozen about potential disruptions to their businesses as a result of this technological innovation. This is not necessarily new to the American experience, but it does seem to be becoming more common. Taxi companies will complain about taxi drivers being put out of business when autonomous vehicles become more prevalent. Tutors, professors and colleges will complain about lower demand for their services once LLMs can provide large parts of our technical education for free. Demand for doctors and nurses will likely very well go down, which will (hopefully) lead to lower health care costs, but, yes, probably less jobs in medicine. Grocery store unions to this day are still fighting self-checkouts. Think of what they'll do when walk-out technology becomes more prevalent? You will hear this over, and over, and over again from industries of all shapes and sizes. You very well might even hear it from computer programmers or code-writers, which would be particularly ironic (though definitely possible).

Why does this matter? It matters because fear of innovation prevents, and stunts innovation. Innovation not only improves our quality of life by reducing costs, it also adds new things to our lives to make them easier. Does anyone want to go back to a world without Google or Apple Maps, both of which are absolutely free? Or what about spreadsheets. This isn't to say there aren't downsides from these technologies of course. Google Maps has definitely impaired our ability to navigate on our own, and our memories on how to get around are almost assuredly worse than they were before we had to think (and remember) for ourselves. The same goes for math with Excel. Am I worse at mental math today than I would be without this wonderful program? Almost for sure. Does anyone want to actually do without it now? Maybe one or two luddites here or there. But on balance, these technologies have saved us all immense time (and time = money, let's not forget), and therefore improved our lives dramatically as well. Fear of innovation, such as what we're seeing now with the port workers in the northeast, keeps costs high, and quality of life improvements low. It slows down the things that make your life better.

So next time someone tells you technology is going to take your job and ruin your life, don't buy it. Better yet, ask them if they can come up with even one example in history where that was true. By the time they've come up with something, not only will you have a list of counter examples, but odds are, most of our lives will already be better than they were when you asked the question.