Automation Puts a Premium on Decision-Making Jobs

A new paper shows that as automation has reduced the number of rote jobs, it has led to an increase in the proportion and value of occupations that involve decision-making. From a report: Automation and AI will shape the labor market, putting a premium -- at least for now -- on workers who can make decisions on the fly, while eroding the value of routine jobs. David Deming, a political economist at the Harvard Kennedy School, analyzed labor data over the past half-century and found that the share of all U.S. jobs requiring decision-making rose from 6% in 1960 to 34% in 2018, with nearly half the increase occurring since 2007. Partially as a result, a greater share of wages is going to management and management-related occupations, more than doubling since 1960 to 32% -- a trend that is more pronounced in high-growth industries. This shift has also reinforced generational disparity in the labor market. Getting better at making decisions requires experience, and experience requires time on the job. Largely as a result, career earnings growth in the U.S. more than doubled between 1960 and 2017, and the age of peak earnings increased from the late 30s to the mid-50s.

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