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Congress probes how AI will impact U.S. economic recovery Posted on : Sep 11 - 2020

AI has the potential to improve human lives and a company’s bottom line, but it can also accelerate inequality and eliminate jobs during the worst U.S. recession since the Great Depression. This dual promise and peril led members of the House Budget Committee to hold a hearing today to discuss the impact of AI on economic recovery, the future of work, and the federal budget.

Expert witnesses recommended approaches that ranged from giving people lifelong upskilling accounts to creating regional investment districts and portable benefits.

Daron Acemoglu warned the committee about the dangers of excessive automation. The MIT professor and economist recently found that every robot replaces 3.3 human jobs in the U.S. In a working paper published by the National Bureau of Economic Research, Acemoglu detailed how excessive automation looks for ways to replace workers with machines or algorithms but produces few new jobs. Companies are currently incentivized by a U.S. tax code that taxes capital at a lower rate than human labor, policy he said incentivizes companies to replace humans with automation. In practice, this can be as simple as replacing a McDonald’s worker with a touchscreen. He argues automation has been a drag on the U.S. economy, potentially slowed market productivity, and failed to lead to higher wages for low- and middle-class workers.

“AI is a broad technological platform with great promise. It can be used for helping human productivity and creating new human tasks, but it could exacerbate the same trends if we use it just for automation,” he said. “Excessive automation is not an inexorable development. It is a result of choices, and we can make different choices.”

Also shaping automation in the economy are Big Tech companies with business models that focus on replacing human labor with algorithms, and priorities enshrined in U.S. government funding. Acemoglu said Congress must also consider factors unseen in data, such as the loss of self-worth a person suffers without a job or how employment impacts the likelihood of a person becoming involved in their community.

Rep. Bill Flores (R-TX) cautioned against changes to how the government treats capital and labor, saying “I think we as policymakers need to be very careful about trying to get into adjusting the mix of capital versus labor because as you said early on Chairman Yarmuth, the government moves slowly. And I think we as policymakers could end up being well behind where the economy is if we’re not careful with that.”

It’s unclear whether testimony delivered today could influence any particular upcoming piece of legislation, but it could impact how members of Congress shape policy related to funding in areas like research and development, national defense, and job retraining. View More