Question

“YOU’RE THE ECONOMIST: What Kind of Unemployment Do Robots and Artificial Intelligence Cause?” in Chapter 16. After reading the case, discuss the following questions: (1) What type of unemployment does technological development cause? Explain. (2) What solution would you propose for any worker threatened by new technologies? (3) Can you think of any public policies that might help offset this unemployment?

Answer 1

1)Structural unemployment is caused due to tecnological development.Change and development in technology tend to replace workers and labourers with modern machines.This leads to loss of jobs and unemployment increases gradually.Companies,manufacturing units tend to opt modern machines in production process which declines the demand for manpower.Structural unemployment causes a huge damage to the economy as per capita income decreases with employment.So,technological development will cause structural unemployment.

2)I would propose any worker who is threatened by new technologies to improve their technological skills.This will help workers from losing their job.If workers are skilled with artificial intelligence and robotics,then it would help them to use those skills in completing work and it also provides better career opportunities to workers.If technological threat is huge,then workers can even search for an alternative job through which they may earn some livelihood.In this way,I would propose a solution to workers who are threatened by new technologies.

3)Yes,there are few public policies which might offset the unemployment caused by technological development.Government can encourage and setup more multinational companies in the country which boosts employment rate as companies require more manpower and labourers to complete production process.So,policy of setting up more companies will decrease unemployement level to an extent.Another public policy is increasing production rate and exporting goods to foreign countries.If export rate is increased then demand for workers will increase which automatically rises the employment level.Government should implement a new policy where improving and inheriting technological skills are inlcuded in education system.Education system should be modified in such a way that students are provided with education of artificial intelligence and robotics from the earlier stage itself.This will help students to gain job in future as they'll have knowledge and skills regarding technology and artificial intelligence.These policies can offset unemployment level to an extent.Therefore if these public policies are implemented and practised,then employment can be boosted by setting off structural unemployment caused by technological development.