This Is One Puzzling Job Market

Technology has brought wonders: desktop publishing, spreadsheets, automated check deposit, social networks and speech bots. Many jobs became obsolete. And now ChatGPT spits out humanlike prose. Google’s Bard promises the same. So why are productivity statistics so underwhelming?

In 1987, the economist

Robert Solow

said, “You can see the computer age everywhere but in the productivity statistics.” Why? Because, as science-fiction author

William Gibson

purportedly said, “The future is already here. It’s just not evenly distributed yet.”

Same with technology and jobs. This headline from November is a case in point: “ILWU clerks shut down Port of Oakland.” As International Longshore and Warehouse Union president

Willie Adams

had written in a letter to California Gov.

Gavin Newsom,

“This is simply not the time to allow further job losses to automation.” Uneven distribution indeed. This pushback is sad because technology enables better jobs as capital flows to more productive uses.

We saw this on Wall Street in the 1980s with spreadsheets, which replaced X-Acto-knife-wielding experts cutting Mylar sheets spread out on large tables. Many jobs were lost, but Wall Street expanded because everybody could build digital balance sheets and dividend discount models. I think Wall Street and private equity made more money from spreadsheets than Lotus or Microsoft did.

Same with desktop publishing. Layout jobs were lost, but 10 times as many magazines were printed until the web enabled digital delivery. Then even more jobs disappeared, but a million times more websites bloomed, creating job booms elsewhere.

Now, startups proliferate as Amazon Web Services and Microsoft Azure lower computing costs. Same for corporate America using cloud software to automate human resources, training and some sales and marketing. But even those systems will change as artificial intelligence enables features only dreamed of five years ago. Old jobs destroyed. Better jobs created.

But back to productivity—why has it lagged for so long? Because of huge sectors that refuse to embrace technology—think eds, meds and feds. School is static. The more students, the more—anyone? anyone?—teachers hired. Heck, they used to ban calculators. So students adapt. One recently connected ChatGPT to a 3-D printer equipped with a pencil. Homework questions in, handwritten-looking answers on lined paper out.

Medicine is unproductive. It’s a doctor-intensive chronic-disease-treatment business. But with prevention and diagnostics to find disease early, perhaps we’d need fewer oncologists and cardiac surgeons. The technology exists with fancy imaging and gene-editing tools, but it’s slow to roll out. And government is two million employees who produce no revenue, ripe for antiproductive processes. Even corporations are slow to adapt to new technology—it took lockdowns to force videoconferencing and add “let’s Zoom” to corporate lingo.

The Federal Reserve’s zero-interest-rate policy created such massive growth that companies threw bodies at their problems instead of re-engineering their businesses. A soft landing or more likely a recession will drive much-needed job transformations. More low-end jobs will be automated. Restaurants and retail are already layering on technology to make up for the shortage of workers, especially with online ordering, self-checkout and delivery. But the process is slow. Still, I suspect that within five years robot shelf stocking will automate even more low-end jobs.

Knowledge workers at home were productive for a short while, but now too many mail it in and miss spontaneous interactions in the office. I think companies will soon demand a smaller workforce return to the office, perhaps reviving productive output. Newfangled ChatGPT and generative AI have work to do, much like the original spreadsheets or rudimentary speech-recognition systems. These tools will eliminate some jobs but make others more efficient and find new uses not yet thought of. Those clinging to the old ways will be passed by.

It’s a new jobs paradox: We have both a shortage and a glut of workers. Expect more jobs lost and better jobs gained as we embrace tele-doctors and pharmacists, food subscriptions, custom-fit-clothing services, paperless government, campus-less degrees, smart toilet diagnostics, concierge plumbers, drone delivery and soon (please) autonomous trucks and cars. This, in fits and starts, will drive the next cycle.

Bell Labs invented the transistor in 1948, but its parent,

AT&T,

had 10 to 20 years of old vacuum-tube inventory and so delayed using transistors. Similarly, for decades the economy had an inventory of baby boomers to throw at growth. But not for much longer—the fertility rate in the U.S. was 1.6 in 2020. This will be a year of re-rationalizing workers.

Write to kessler@wsj.com.