October 11, 2019
A rise in automation in the American workplace could make inequality worse over the coming decades, according to Federal Reserve Chair Jerome Powell.
“Are we entering into one of those periods where a lot of what is now work can be done much more efficiently through automation, and will that have really challenging distributional consequences, at least for a few decades? That could be the case,” Powell said during a “Fed Listens” event at the Kansas City Fed on Oct. 9.
“The part of this we control, though, is getting people the skills and talents and aptitudes that they need to be able to benefit from technology,” Powell continued. “And I think if we don’t do that, we’re just going to see more and more of this, where some people are just left behind by what work has become.”
Over the past 30 years, inequality has risen dramatically. The top 10% of American household by income own 57% of the country’s wealth, up from 47% three decades ago, according to data from the Fed.
Several sessions this year have been organized by the U.S. central bank to collect input from communities across the country on how it makes policy. At the Kansas City Fed event, a panelist raised concerns about the effect of automation on the workforce, which prompted Powell’s response.
“The concern that you raise has always been the case, going back years,” Powell said. “And there have been periods when technology disrupts workers. There’s also a long period during which they do not benefit. On the brighter side, though, if those people do get those skills, then their productivity will go up, their wages will go up, and everybody can benefit.”
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