AI's Gains, Workers' Losses Echo 1931 Fears

In December 1931, switchboard operators, movie-theater musicians and teamsters were losing work as new technologies replaced their jobs. Economists meeting in Washington debated those losses during the Great Depression, asking whether technological change would benefit workers or mainly enrich the wealthy. Nearly a century later, economists are asking similar questions about artificial intelligence.

The jobs have changed. Computer programmers, scriptwriters and drivers of diesel-powered trucks now figure among the workers whose prospects economists are examining. The central questions remain: who receives technology’s benefits, whether new jobs appear in time to replace those lost, and what government can do for workers facing disruption.

Workers and the pace of change

In 1931, dial telephones took work from switchboard operators. Movie-theater musicians were becoming unnecessary as “talkies” replaced silent films, while gasoline-powered trucks displaced teamsters who drove horse-drawn teams. The meeting examined technological change as workers lost jobs in several kinds of work.

Sumner H. Slichter, a Harvard economist, told colleagues at the annual meeting of the American Economic Association that change was happening “more rapidly than in any previous age.” He added: “And yet we have failed, for the most part, to recognize that change presents a major social problem.”

The economists warned that the speed of technological change, along with its effects on the economy and social stability, posed particular risks. Their concern extended beyond the arrival of new machines. Workers were losing jobs, and the effects reached the broader economy and social stability.

Who receives the benefits

Today’s debate over artificial intelligence returns to a question raised by the earlier disruption: will technology’s benefits be broadly shared, or will they accrue mainly to the wealthy? Economists studying AI are also asking whether new jobs will emerge quickly enough to replace jobs technology may eliminate.

Those questions define the economic stakes for workers in occupations under consideration. In the earlier examples, telephone operators, musicians and teamsters lost work as technologies changed how telephone service, movie entertainment and transport operated. Now economists are considering computer programmers, scriptwriters and drivers of diesel-powered trucks.

The account raises the possibility that benefits may accrue mainly to the wealthy, but it reports no specific company, profit figure or distribution of AI-related gains. It leaves the distribution of benefits an open question. The same goes for replacement work: economists are asking whether new jobs will appear in time, not reporting an answer.

Government and disruption

Economists are also asking whether government data can measure a rapidly changing economy. They want to know what government can do to slow disruption or help affected workers. Those questions put public policy and economic measurement alongside the effects of technological change on jobs.

The 1931 meeting took place while the Great Depression continued. Economists then considered the threats technology posed to American workers and the risks rapid change presented for social stability. Today’s economists are examining artificial intelligence through questions that echo that debate, while focusing on different occupations and technologies.

The account offers no specific government proposal or action, and it doesn’t say whether AI will produce enough new jobs to replace those lost. It records the questions economists are asking: who gains, who loses work, whether employment will return in new forms, and whether government can measure or ease the disruption.