● Covered by 1 source · 1 reportMedium impact1 neutral
Automation Can Harm Workers' Job Meaning Even Without Job Displacement
Key points
- Automation can reduce the meaning workers derive from their jobs.
- This impact occurs even if workers are not replaced by machines.
- Loss of meaning can increase compensation or be borne by workers.
- Public demonstration of machines can lower the value of human work.
Automation's Impact Beyond Job Replacement
A recent NBER working paper, "Replaceable but Employed: Automation and the Meaning of Work" by Joshua S. Gans, explores how automation can affect workers in ways that extend beyond direct job displacement. The research focuses on jobs where workers value both producing useful output and the knowledge that their personal contribution is essential to that output.
The "Meaning Externality"
The paper introduces the concept of a "meaning externality," where the mere existence of a credible machine alternative can weaken the second source of meaning for workers, even if they are retained by the firm. This reduction in the perceived value of their unique contribution can occur before any jobs are eliminated by automation.
Economic Consequences for Workers and Firms
The model presented in the paper indicates that this loss of meaning can lead to higher compensation demands if wages fully adjust. However, if wages only partially adjust, workers may bear some of the psychological and economic cost themselves. This dynamic can also make the adoption of automation more likely for firms.
Implications for Automation Development
The research suggests that an external developer might profit by publicly demonstrating a machine before licensing it. This public display can lower the perceived value of human labor, thereby creating demand for the machine. The paper concludes that this "meaning externality" can lead to profitable automation development that is ultimately socially harmful, as it devalues human work without necessarily improving overall output or worker well-being.
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Primary sources
GitHub aFarkas/lazysizesReporting from
A new NBER working paper by Joshua S. Gans proposes that automation can negatively affect workers by diminishing the perceived value of their contributions, even if they remain employed. This "meaning externality" can lead to increased compensation demands or workers bearing the loss, and may incentivize automation development that is socially harmful.