Three papers were presented in the “Industry Decline & Income Insecurity” panel Saturday afternoon at the recent APPAM student regional conference in Washington, DC. The presenters took different, but related perspectives, on layoffs, unemployment support, and technological unemployment.
First, Monica Rodon, of the University of Pennsylvania, presented her research on technological unemployment and the demographic groups who would be hurt by increasing automation. She began with some historical perspective on the effects of technological change on employment as well as current forecasts of how many jobs will be displaced by automation. The concern is that women and people of color who on average have fewer assets to rely upon during long term unemployment would be hurt the most by technological unemployment and labor markets that are slow to reabsorb workers.
Second, Katherine McKay, of Carnegie Mellon University, discussed her policy analysis of the options governments use to address wage losses following unemployment. These policies are of growing importance in periods of increasing contingent labor and technological unemployment where existing policies struggle. The primary policy types reviewed were wage subsidies to employers or wage supplements to workers to encourage employment or replace lost income. Comparing evidence from policies in the US and Canada, she recommended a wage supplement approach that extended benefits over time to address the now longer job search process.
Third, Xiupeng Wang, of the University of Connecticut, delivered his findings from a study exploring the relative importance of worker versus firm characteristics in predicting involuntary job losses. He used data from Great Britain, Germany, Korea, and Switzerland to creatively estimate unobservable worker characteristics and then distinguish their effects from the features of the firm. Ultimately, he found that layoffs are more likely among those in lower-wage jobs and those working in small firms. Union membership was also found to generally protect workers from layoffs.
Finally, the panel discussant Dr. Joseph Cordes, of George Washington University, praised the three pieces of research and noted how much uncertainty remains about the future of employment given advances in artificial intelligence and robotics. There were both points of optimism and pessimism in the discussion, since humans are certainly adaptable, but the pace of change and the distribution of benefits may present significant challenges.