What Deindustrialization Can Teach Us About The Effects of AI on Workers

Of technology and job destruction

In 1952 Kurt Vonnegut published Player Piano, a cautionary tale about the social consequences of automation. In his vision, pre-programmed machines would eliminate the need for workers, leading to a society plagued by mass unemployment and anomie.

He was basically right about technology. We haven’t done away completely with the need for human workers in manufacturing, but U.S. manufacturing produced almost 10 times as much in 2024 as it had in 1947 while employing 10 percent fewer workers.

But he was completely wrong about technological progress causing mass unemployment. More than 70 years after Player Piano, the percentage of Americans in their prime working years with jobs was far higher than when he wrote:

True, this was largely because far more women entered the paid work force. But the important insight is that despite automation the vast majority of Americans seeking jobs continued to find them.

This may seem like a debate about history. But much of what Vonnegut and others said in the 1950s about the devastating effects automation would have on workers is echoed, almost word for word, in what many people are saying now about the employment effects of AI. Now as then there are pervasive warnings of a job apocalypse that will leave much of the population surviving, if at all, on government handouts.

Yet fears that technology can destroy some jobs aren’t misguided. In fact, last week I argued that technology-driven productivity growth, rather than globalization, is the main reason employment in manufacturing has declined from around 30 percent of the work force in the 1950s to less than 10 percent today.

But while technology can and has destroyed some jobs, even whole occupations, it has never led to mass unemployment. And it probably never will, because other jobs have always emerged to replace those that have been lost. This phenomenon of technology-induced job creation alongside job destruction is inherent in the logic of how the economy works.

Which is not to say that no one is hurt in the process. Technological progress — like international trade — makes the economy richer as a whole but often makes some people, possibly millions of people, worse off. That is, overall incomes may rise, but there are almost always losers as well as winners. And it’s a policy choice whether to use some of the economy’s increased bounty to help some of those who are hurt.

So today’s primer will build on last week’s history of deindustrialization and globalization as a model for how to think about the likely future effects of AI on American workers.

Beyond the paywall I’ll address three issues:

1. The history of technology and deindustrialization in America since World War II

2. Why technological progress doesn’t cause mass unemployment

3. Who is hurt by technological progress and why