Policy to address worker displacement due to automation

This activity is appropriate for an introductory economics class. The activity might be part of a unit on labor markets, income inequality, or structural unemployment. In addition to readings in a textbook in advance of the activity, students are to listen to a podcast before the class period and it would be wise to have students answer a few JITT questions on the CMS before class to hold them accountable for the podcast and to get them thinking about the issues in advance of the class period.

Overview

Students watch a TED talk by David Autor before class. The podcast presents an optimistic view of the economy's ability to absorb workers who are displaced by automation into other sectors of the economy. This application exercise asks teams to select and argue in favor of a government policy to address the problem of worker displacement due to automation.

Expected Student Learning Outcomes

Upon successful completion of this learning activity, students will be able to ...
Explain the difficulty workers in traditional manufacturing sectors have finding new jobs when their jobs are eliminated due to automation.
Compare the benefits and costs of several alternative policy measures that a federal government might take to address the problem of structural unemployment due to the loss of low-skill jobs from the economy.

Information Given to Students

Policy Response to stagnant low-skill worker wages

Consider the automation of US factories and the issues raised in the Autor podcast. As low-skill workers are displaced from relatively high-paying factory jobs, many find it difficult to find work at similar wages. This phenomenon drives some of the increase in income inequality in the United States.

What should be done?

A. Heavily subsidize college education -- all majors.
B. Heavily subsidize college education -- STEM majors.
C. Establish a Universal Guaranteed Income.
D. Institute a public work program for the poor.
E. Other. (Group will articulate what and why.)

There is no one right answer to the question posed in this activity but team reporters should engage in a spirited discussion of which policy is best. The facilitator should remind student reporters to compare the likely benefits and costs of alternative policy measures -- in broad terms, as no data are provided to students.

An essay question on an exam and/or final would assess student understanding of the issues raised in this learning activity.

Link to TED talk by David Autor.