Can Technology Actually Save Jobs?

whole global economy. But first, we've got a report from one of Bloomberg's most experienced US economy reporters, Craig Torres, who's based in Washington, d C. He couldn't help noticing that despite all the talk of robots destroying jobs, the U. S. Economy still seemed to be creating a lot of them. It made him want to see for himself how technology was affecting the world of work and what it might

mean for the future of jobs. So, you know, a real busy Monday, or a Tuesday like today after holiday US in a day could be a certainly very busy Monday's. I recently visited Washington Hospital Center, the biggest in the nation's capital, with an emergency room that handles two forty patients a day. I went there because I thought it would help us start to solve one of the big riddles in the US economy today. Why have we been hiring so many people in recent years? Last year, the

US added two point seven million jobs. That happened at a time when we hear a lot about artificial intelligence, robots, and human less tasks in a variety of industries. I suspected that there was something about technology that was labor intensive and labor creating. I found it at Washington Hospital, which is part of med Star Health, a big chain in the d C region. They found a technological solution that let them double the number of e ER patients

they could triage. It made doctors more efficient, but it also created the need for more jobs, texts and nurses to process the higher volume of patients. I met an e R doctor named Ethan Booker who helped apply this technology with strong results. So how many patients do you see an emergency here every year? Eighty seven thousand patients? Because that was a lot of humans and pain one way or another. Med Stars emergency room has this role known as the p I T or PIT that stands

for provider and triage. The pit physician's job is to make a call all on the condition of a patient rolling into the e R and get them routed into care. Do they have a broken bone or just to sore back. Imagine, however, trying to process more than two hundred patients a day any e RS by definition somewhat chaotic with lots of

urgency in the air and distractions can be huge. You know, the patients came in the nurse, the doctors got their orders started, but that work over there, as you can imagine, kind of embedded in right in the front door of the emergency department was It was an entire nine hour shift on your feet. Um there was tons of interruptions, helping people with wayfinding, people coming back to you to kind of understand where they were in the process, that

kind of stuff. So what they did was used technology to create a remote pit. I walk with Dr Booker through a maze of hallways. He opens a door and inside I see Dr Jasmine Mallock quietly using a headset to talk with a patient on the video monitor. It is only about a five minute walk from the emergency room, but it is a world away. There are no patients on stretchers here, nobody's bleeding. The remoteness isn't the only

efficiency of this system. If the patient has been to the hospital before, Malik has a medical record in front of her, she can also order follow on testing immediately with a click of a mouse. I talked to Booker about the difference between working downstairs versus here upstairs in a nine hour shift, going flat out on your feet the whole time, UM, you might be able to get to ninety patients. UM. The peak speed that you can

do on this is is. I've seen some hours where patients where physicians of process twenty two patients in an hour. Twenty two patients an hour. That would amount to around two patients during a nine hour shift, more than double what a doctor on the R floor could do. More patients passing through triage means the hospital needs to hire more people to process all of them. Here's Booker again.

I think it's labor enhancing. Certainly didn't replace anybody, and in places in which we were successful with this, there there's a need for more labor. There is another myth to bust here, one that is also about technology and jobs. Very rarely does a company like MedStar buy a piece of technology off the shelf, plug it in and turn it on a complex organization like a healthcare system, has to adapt tech to its own needs, and in healthcare

there is a very high bar for security. So for all the alluring stories about technology being instantly productivity enhancing it rare, really is it takes hours of human labor to configure it and make it safe. Med Star has a whole innovation institute that is always looking for ways to use technology to help doctors and patients. I spoke with an executive there named John Locke. This is how

he describes that process. We have teams of people across that organization working on kind of the next five to ten years. And then how do we give people in a big health system, and we're talking about plus people a big organization, how do we give people room in that to actually experiment and build some of these things out? This technology strangely labor intensive. Yes, creating something new is

full of dissonance. It's not smooth and easy. If it isn't smooth and easy, then why are millions of companies working so hard to put technology in place? I wanted to take that question to Lonnie Jaffee, a guy with a long career and technology firms who was now at Insight Venture Partners in New York. They invest about twenty billion dollars spread over a hundred and fifty companies, many of them makers of software. In the technology industry, we

see continuous enormous levels of deflation at all times. So you know, in the cost of a gigabyte of storage was something like five hundred thousand dollars per gigabyte, and today it's less than three cents per gigabyte. It's hard to wrap our minds around that level of a price drop. But if you are a user of technology like that, as the prices drop below certain thresholds, entirely new business

models get unlocked that we're not previously feasible. And those can not just unlock new pools of revenue and opportunity with your end customers, it can also unlock new pools of labor. The interesting takeaway from me is that cloud computing is making it cheaper and easier to put powerful software into the hands of a lot of employees wherever they are. Low cost pervasive technology might actually tilt the mix of capital and labor we need to produce GDP

in favor of labor. That suggests America's tremendous job growth might not be such a riddle after all. But before ending my search, I wanted to explore how technology might be affecting another part of the economy that's been creating more jobs than most, the hotel sector. Here Well, I'm good chorus from Bloomberg the Well. Eater is the chief Information and Digital officer at Hilton, the hotel group. I met her at their headquarters in McClean, Virginia. Lodging is

an incredibly labor intensive industry. I have a son, a cousin, and a close friend in the business, and everything they tell me suggests that getting the customer experience just right is very human intensive. But Eater told me it was also a business in which technology could be truly transformational. I think what's possible with technology in for Hilton is

nothing short of staggering. Technology, in my mind, has yet to truly immerse itself into the integrated experience for customers in as profound a way as is available to us. Eater describes the options she wants to see widely available to hotel guests in a digital age, such as checking in on your smartphone app, which can also set your room temperature or order a meal before you've arrived. That personalized experience is only possible if customers share their preferences,

which means eater has to win their trust. On the front of digital security, an area that also takes a lot of labor, the thing that we have to perfect is the ability for humans to interact around this technology, so there isn't a stark contrast between the digital engagement and the human engagement, so that the front desk team member knows what you ask for within the application or in the message, etcetera, and can respond above and around them.

So technology can be labor enhancing in a high touch business like lodging, and there might also be a sweet spot when human labor and technology come together and employees are freed from rope tasks such as check in and can use their time to tell you about a good lunch spot or maybe about a nearby music festival. Hilton's business is about people serving people. It is very much the culture of the business. It is very much the culture of the experience, and we believe that humans. I

believe that humans provide that unique differentiation. It's the it's the human connection based on empathy, really warmth and generosity that makes a hotel experience stand apart. So we are not designing technology to replace humans. That will not be Hilton's business. Um, and I'm pretty happy about that. I haven't a lie humans for Bloomberg News. I'm Craig trust Now.

I'm delighted to say I'm joined by my friend and former boss, Larry Summers, the Harvard professor and former US Treasury secretary who also served as the director of President Obama's National Economic Council. Welcome to Stephanomics. Good to be with you, Stephanie. We have just heard from Craig Torres, who had a fairly upbeat view of the impact of

new technology on jobs. And I know from talking to him that the reason that Craig got into this was that he had just been looking week after week with the US very strong job growth and as we know, going with that weak productivity growth. But at the same time as we've had all of this argument and concern around technology and automation, and it just felt like it was going against the sort of robots are coming for

your job's rhetoric that we hear about so much. So, where do you come out on this ongoing debate about the impact of technology on jobs, I think your reporter is more wrong than right. Um. I take the long view. I was involved in discussions of automation when I was an undergraduate in M I T in the nineteen seventies, and then we heard the view that Craig Torres takes that technology would create more productivity, and I would create more spending power, and I would create more jobs and

all would be well. Um. When people were saying that in the nineteen seventies, five percent of men between the ages of twenty five and fifty four we're not working. Now about thirteen percent of men between the ages of five and fifty four are not working. And so technology actually on net has led to a substantial amount of displacement. Whenever has happened in the last few years, I don't

think proves that much. And by the way, since productivity growth has been very slow for the last few years, I don't think it's been a period of particularly active uh technological change, So I don't think that proves very much. I think looking forward, we've got to recognize that almost any activity that can be routinized can be mechanized, and that has to put substantial pressure on many different job

categories and many different people. Now, there'll certainly be some new jobs created, and probably some of the new jobs that will be created will have high productivity and support high wages. But for people who are really set up to do routine work and not to do other work, I think it's likely to be a very difficult period going ahead. And do you think I mean to defend Craig a little bit? Of course, he's not claiming that the overwhelming effect of technology um will be positive for labor.

He was just he was kind of highlight he's highlighting some examples where you could see technology kind of complimenting late. And there's certainly people talk about these cases where now you will have you know, there'll be more demand for the very human jobs, and the very human jobs will be more prized because you have all this sort of

technology supporting those human qualities. Your view is there doesn't exist, and maybe we'll have more of them down the road, But the ELVM, they're not going to be more than a small piece of the story in this short I take the long view. Five or some of the people weren't working in the group where you'd expect everybody to be working and then thirteen for some of the people, uh weren't working. And it's been a pretty inexorable trend. If you take that trend back to the nineteen forties,

the trend is even stronger. So I don't dispute the idea that there will be some sets of jobs that will become more productive, and that there will be some jobs created, you know, being an eBay merchant, being a Facebook programmer, building building sites. But I think the to mentality of it, and particularly for the people who were most on the margin of working versus not working, I

think it's likely to be difficult. You know, twenty years ago, the big change that was happening in the global labor market arguably was China and globalization. You know, was the was the arrival of the Chinese labor force, if you like, into the global economy. And I remember when I was studying at Harvard and elsewhere, there was a consistent underestimation of the impact that was going to have on the

global labor market. Now we have all of this evidence from David Ort and all these other academic evidence about how that wave of competition from China cost jobs here in the US, and people didn't immediately bounce back, and the costs were concentrated in a way that theory doesn't predict. Now we have that data, how is it. Does it help us be more aware of what's coming down the track with this new wave of technological change or do you think a whole lot of different lessons are going

to come out of that. I'm not sure. I think the David Otter work that you refer to is about to be and is already being subject to a wave of revisionism. UH. People are taking account of the extra exports as well as the extra imports. People are taking account of the fact that a lot of the goods that we import from China then become part of products that we sell that are cheaper because of the imports from products so China. So we import, so we use

more people because we sell more of the product. People are taking account of the fact that the imports from China held the price level down and that enabled the FED to pursue easier policies. None of those effects were really contained in the David out Tour research that's so frequently UH cited. So I think you're going to see some revisionism towards blaming China rather less for the problems

that have existed in the United States. Moving on from this, we should talk about, you know, where you think the US economy is right now. I mean, there's a lot of debate about how much structural change there's been in the labor market and how much further unemployment can go. The recent FED change in its attitude towards that in a sense, you know, seemingly willing to give it more time before continuing to raise interest rates. Where do you stand on that? Do you think the FED should be

even slower, even more cautious. I'm glad to see the FED embrace the kinds of ideas of secular stagnation that

I've been talking about for some years now. I think they've recognized that in an economy where fundamentally there's a higher propensity to save than there used to be and a lower propensity to invest than there used to be, interest rates that once would have been very stimulative now actually can be consistent with UH contraction, and therefore they've got to be very careful about overly contracting the economy.

I think that's a good recognition by the FED. It's also been good that the FED has recognized that inflation looks awfully quiescent, and that the combination of no increases in the minimum wage and forever huge restraints on union power, the ability of companies to outsource more ruthlessly, aggressive shareholders maximizing profits, all that has operated to put downwards pressure on wages. And ultimately it's very hard to generate very

much product price inflation without having wage price inflation. And so I think J. Powell has been in the right place on that as well. I wish he'd gotten there before they raised rates UM in UH December. And I wish the President wasn't making it harder to do the right thing by making doing the right thing look like it's a craven political act, as he puts pressure on the FED. But the Fed has to do what's right, whether it makes politicians happy or whether it makes politicians unhappy.

And on balance, I think the risks of excessive restraint on the economy are are greater than the risks of insufficient restraint. In addition to the considerations I already raised UM, our goal in the United States is to have a

two symmetric inflation target. Symmetrics an important word. It means that inflation is supposed to average two Why I ask you the question if after ten years of recovery, when the unemployment rate is lower than it's been in fifty years, and we're in the eleventh year of expansion, if that's not the time when we're gonna have inflation above two percent after ten years, when we've had it below two percent,

when would such a time ever be? And it's like the credibility of the FED with respect to an inflation target actually depends on its ability to generate a bit of acceleration of inflation and inflation expectations from here. I'm not sure they're going to be able to do way, but they should at least be quite trying. Larry Summons, thanks very much for being on Stephanomics, and maybe one of these days we'll get you back on the program.

Good to be with you. So I'm joined now by one of our top FED reporters, Gina Smellek, who's based in New York and she has the important job, among many other things, of writing our economic research rap every week for Bloomberg, and recently she wrote about poor Man's monetary policy. Tell us about that, Gina, Right, So this is this idea from city groups. Will Embroider in a recent research note that central banks are not going to have a lot of ammunition at their disposal come the

next procession. And the point he's making here is that

rates are still pretty low around the world. The US is obviously a little bit above zero, but you look at the euro Area in Japan and they're still sort of lingering below And so come the next crisis, the central banks are really going to be forced to rely heavily on their balance sheets, sort of tinkering around the edges of composition in size, and aren't going to have a lot of the tools that have traditionally been at their disposal, which you know, most centrally includes rate cuts.

And I guess what's interesting about this, and you mentioned a few other bits of research, including the recent paper that that Larry Summers um co wrote and produced for the Brookings Institute conference, that it's sort of this debate about not having enough ammunition for the next crisis is kind of clashing, sort of colliding with debates around what the best economic policy is right now in the US and the sort of more progressive thinkers um talking about

modern monetary theory and wanting to run big, bigger deficits, you know, in a sense for political reasons, but you've got economists saying you might want to do it to help prevent the next crisis as well. Is that that must be kind of interesting for you to see the sort of everyone's coming for coming to the same conclusion, which is we need to borrow more, just at a time when I would have thought that President Trump was already borrowing quite a lot, right. It's so interesting. These

conversations are also closely interconnected. And there's I think this growing idea that central banks are dealing with what's called a very low neutral interest rate. So that's the one that neither stokes nor slows growth. It's really low for demographic reasons because populations are aging and people tend to save as they age, and that pushes that sort of rate setting that they can achieve down a little bit.

One way to get that higher is by running a bigger budget deficit, especially if it can if doing so results in sort of infrastructure spending and other things that can raise the productive capacity of an economy. But that's hard to do in a world where you already have really high to GDP ratios, and so I think there are all these conversations around what does fiscal responsibility mean in the world of twenty nineteen, and what is it going to mean come the next recession? Like how much

can we play with this stuff around the edges? And at what point do we push ourselves to a point where we're just overextended on this fiscal front. And I think that conversation is really reaching a fever pitch in places like the US now, and I don't think it's going to fade in any way come the next crisis. I think this is this is a debate that we're going to have with us for the foreseeable future, and I suspect we are going to be talking about it

many times. Thanks very much, Gina Smellick. Thank you, thanks for listening to Stephanomics. Please join us next week for another episode about the forces shaping the global economy. In the meantime, you can find us on the Bloomberg Terminal website or app, and wherever you get your podcasts. We'd love it if you took the time to rate and review the show so it can reach more listeners. For more news and analysis from Bloomberg Economics, follow as economics

on Twitter. You can also find me on my Twitter handle at my Stephanomics. The story in this episode was reported and written by Craig Torres. It was produced by Magnus Hendrickson and edited by Scott Lanman, who is also the executive producer of Stephanomics. Craig's original article on this topic appeared in Bloomberg business Week. It was edited by Ben Holland and Christina lind Black Special thanks to Larry Summers. Francesco Levy is the head of Bloomberg Podcasts.