here we are thank you for coming here to listen to professor krueger my name is marco zaterin i am the vice director of a paper that is called la stamp i hope you have heard about it if that is not the case please go and buy one go and buy one copy and it's a great honor for me to be here in this beautiful room and all and even more being here to introduce alan krueger professor krueger was at the department of economics at princeton university where he has held a joint appointment and he is the founding director of the princeton university service research center and he served as chairman of president barack obama's council of economic advisers so if you believe in the game of the six degrees of separation well with six steps we get to barack obama and he also served as a member of his cabinet in the years 2011 2013 he's also served as assistant secretary for economic policy and chief economist of the us department of the treasury and he has published a number of books that is called terrorist-wide economic and causes of terrorism but there are uh two things on top of that for mentioning professor kruger he was the inventor of the curve of the great gatsby that curve is an economic design is an economic curve that defines the principle on the basis of which if there are large inequalities you have a reduced level of mobility between social classes so the highest level of inequality the least likely is for a poor person to get rich and then another book is rockonomics well i like that very much rockonomics is a great fan of music of blue springsteen more specifically and he was at the rome concert at the chirokomassimo and one of his dreams is meeting laura pausing so well up to you rockonomics is a parallel between the business of rock music and the evolution of the economy putting together four variables technology business luck or chance as italians would say and the level of erosion of social norms and the technology and the future of work is the title of this session so this fourth industrial revolution that is taking place now whether we like it or not and the idea is how to avoid really blood shedding due to unemployment and be ready to react and get all the opportunities professor krueger prepared an excellent introduction and please remember the figures is going to mention about italy because these are figures that will make us reconsider somehow the role of our country and the new possibilities of change that is being opened just now and now you have the floor professor krueger thank you thank you very much marco for that very nice introduction and i'm very glad to speak to you today rather than have a robot come and give my presentation i'm going to give you an overview of my remarks to begin with and then i'll tell you why i reach these conclusions the first point i want to make is that historically we have had waves of innovation ways waves of technological change that have disrupted work um especially in the short term they created new products new opportunities and ultimately technological change has raised our living standard because we could produce more with less human input the fourth revolution which marco referred to involves another generation of robots artificial intelligence which is essentially using big data to make decisions and act the way humans would act under those circumstances has tremendous potential but at the same time it could also displace many workers interestingly so far there's very little evidence that this revolution is raising productivity we're seeing a slowdown in productivity growth we're producing more per hour but at a slower rate of improvement than had been the case historically now i think that the pace of change is unlikely to be faster in the future than it has been in the past that means that we should be able to adapt and create new industries for workers to go into that's my expectation i'm on the mostly optimistic side at the same time i think that jobs are going to change work will not disappear in the future there will be jobs for people to do important jobs for people to do but the type of work is going to change because some of it will be completed by robots or artificial intelligence or other technology coming down the road the main concern i have about technological change does not involve the disappearance of work but it does involve downward pressure on income for less skilled workers and even greater inequality than we've seen in the past and i'll conclude my remarks by saying a little bit about policy choices and in essence there are two broad choices we can make one choice is try to slow progress or prevent progress the second choice is to prepare for technological change and to try to soften the negative effects of robots and artificial intelligence and take advantage of the improvements in technology now i should start off by saying economists have a very long history of being wrong about technological change and the pessimists over time have been proved wrong so here are two very distinguished economists john maynard keynes whose name i misspelled and wellesley leontieff leontyaf was a nobel prize winner who taught at harvard and new york university keynes as you know invented keynesian economics kane said in 1930 we are being afflicted with a new disease of which some readers may not have heard the name but of which they will hear a great deal in the years to come namely technological unemployment that was nineteen thirty now we have as you'll see in a moment many more jobs than we had in nineteen thirty leontiev warned labor will become less and less important more and more workers will be replaced by machines i do not see that new industries can employ everybody who wants a job now this shows you the picture of employment for the u.s as far back as our data go back to 1939 and you could see with the exception of some recessions we've had rather steady job growth the number of jobs in the u.s increased by 500 percent since keynes warned about techno technological unemployment the unemployment rate in the u.s last month it was announced today is 3.8 percent so unemployment is low it's hard to point to technological unemployment despite the tremendous progress we've made in technology nonetheless the labor market is not working as well as we would like we're not seeing fast enough income growth and particularly for workers with low skills in the us and many countries around the world we're seeing stagnation the middle class is under stress in many countries so inequality has been i think the main problem created by technological change not technological unemployment now one thing that keynes did get right is he predicted the problem of the 21st century will be that people have a lot of leisure he predicted that hours of work would decline and this shows the number of hours worked per year by the average worker in the u.s and it's declined by about 15 percent since the 1950s i don't think it's such a serious problem about what we should do with our leisure but we do have more leisure and it dawned on me that perhaps trento should have a conference on the economics of leisure what we should do when we're not working and then it dawned on me that all of the other festivals in italy have to do with what to do with leisure music festivals and so on so i'm not going to suggest that idea to tito bori let me give you a quick tour of the economics research on technological change of the work that's been done since the 1990s and i think there have been three generations of studies i participated uh in the first and the third generation of of this work so the first generation of studies were conducted in the nineteen nineties and this was largely a reaction to the tremendous growth and inequality that occurred in the u.s a decade earlier in the 1980s economists are a little bit slow to catch up to what's going on in the economy so it took a little while for the economics profession to focus on technological change as a driver of the rise in inequality in the 1980s it actually took a while for some economists to agree that inequality was actually rising even though we saw the most rapid increase in inequality in u.s history in the 1980s these studies focused on what's called skill-biased technological change skill biased technological change means that the technology is raising the demand for more highly skilled workers and at the same time replacing less skilled workers the technology is doing the work of the less skilled workers helping more skilled workers to be more productive and the main evidence for this view was that in the 1980s and early 1990s we saw a tremendous increase in the earnings of college graduates relative to high school graduates and at the same time we saw the employment of college graduates grow and the employment of high school graduates fall and if you look at high school dropouts the picture was even worse their earnings declined by about 20 percent after adjusting for inflation in the 1980s and even though they were less expensive to hire their employment fell now the natural explanation for that set of facts to economists is that something has tilted the demand in favor of more highly skilled workers and the obvious culprit the obvious suspect was technological change in the 1980s personal computers became ubiquitous ibm pc i think was only first sold in 1982. and by the end of the 1980s about half of workers were using a computer on their job if you look in the 1970s hardly any workers were using computers on their job so other work looked specifically at the spread of computer technology did the industries that were faster to adapt computer technology see a bigger shift in demand in favor of more highly skilled workers the answer to that was yes that's what i found in a study with david otter and larry katz another study i did i looked at earnings how much workers are paid if they use a computer on their job versus not using a computer on their job and i could look at some very specific occupations like secretaries and what i found was used by microsoft in an ad campaign there's a little cutout up here which says princeton economist to cut out my name calculates that anybody who uses a computer earns 15 percent more than an equally skilled coworker who does not then microsoft like to point out that they make it easier to get a raise the growth in training to use computers uh what was really remarkable if you think about the revolution that took place in the way that work is done that was the first generation of studies the second generation of studies said you know looking across skills maybe that doesn't make the most sense let's look at tasks tasks what type of work do people do on their job what are the specific assignments that they do and occupations were viewed as a collection of different tasks and uh studies that were done in the u.s by david otter frank levy and dave and richard murnane one for the uk and then others from many other advanced countries found that jobs were declining with mid-level of tasks mid-level of skills if you look at the 1990s the situation was different than the 1980s in the 1980s the low-skilled tasks were declining and if you look in the 1990s and continue into the 2000s it's the middle skill tasks that were under pressure so middle skill occupations were declining up and that suggests that the technology was substituting for workers in the middle which is a little inconsistent with the skill bias technological change story and in fact if you look more recently a study by larry michelle and his co-authors finds again a shift in the type of jobs that are disappearing the third generation of studies focuses on artificial intelligence and robots darron assamo glue who has presented here in the past has done very exciting research on the industries where robots are being adopted just like i had done work looking at computers and what he finds is downward pressure on wages and employment in areas where robots are more likely to be used and i'll return to that a little later on but most of the third generation of studies have looked again at occupations at the tasks that they do and try to make an assessment as to whether new technology will be able to automate those tasks so if you think about a job as a collection of different tasks that are being performed maybe some of those tasks can be performed by a robot or by artificial intelligence and we can then say what fraction of jobs are at big risk of being automated of being replaced by the technology and just to document the current wave of technology at least the investment in the technology this chart on the left shows you the billions of dollars that are being spent in the u.s each year on artificial intelligence and you can see very rapid growth almost five billion dollars a year now are being invested in companies that are trying to develop artificial intelligence to do different things to answer phone calls at customer service companies to make insurance adjustment claims sometimes these artificial intelligence systems work together with individuals for example you could have x-rays taken and have the computer evaluate the x-rays to see if there is a risk of disease and you can also have the doctor radiologists look at them and they both add value so far the artificial intelligence is not better than the doctors it doesn't completely dominate the doctors but it does a pretty good job and if you do use the both combined we can catch more diseases and hopefully improve individuals health the right shows you shipments of robots to be used in industry this is worldwide not just for the us and interestingly about a half about half of all of the robots that are being used are being used in auto plants i visited the tesla factory which is one of the most advanced production facilities they took the old nume factory and they turned that into the factory that makes tesla cars and you see a lot of robots but you also see a lot of humans working together with the robots to assemble cars so about half of the robots currently are being used in auto manufacturing and about a quarter are used for electronics and pretty soon electronics and autos are going to emerge it's already the case that much of the value of a car is from the electronic components so as i mentioned the latest generation of studies tries to size tries to assess the number of jobs that are at risk from automation and the method is pretty simple we ask experts in the artificial intelligence field in the robotics field to look at the different tasks that are being done in different jobs and to say how likely is it that in the next 15 years 20 years technology will be able to do these tasks now the experts of course aren't perfect but they have better judgment on what's feasible with the technology than i do and the experts have identified some bottlenecks some areas where the technology is going to face challenges and difficulty and progress will be very slow such as solving complex problems tasks which involve influencing someone else unstructured communications where the conversation is different from interaction to interaction and it's very good at solving other kinds of problems turns out it's good at selling good at simple problems good at rote tasks so a variety of studies have tried to assign to each different occupation in the u.s and has been extended to other countries as they'll explain an estimate of what's the likelihood that this job or a big component of this job can be automated and the estimates for this for the u.s suggests that between 25 percent and 50 percent of jobs are at risk because of robots and artificial intelligence the study that found 25 percent was done by the mckinsey global institute the study that found 50 was done by economists at the oecd and there's a tremendous amount of uncertainty in these studies as that range would indicate and it may be the case that an entire job doesn't disappear but part of the tasks are done by the new technology and the work of humans in that job is to make sure the technology is working properly the estimated share of jobs that are at risk varies across countries depending upon their industry and occupational makeup the uh study suggests that the risk for italy is about the same as the u.s maybe a little bit higher given that italy has a higher share of employment in manufacturing and in agriculture than the u.s now i wanted to point out i've actually done studies a little bit like this on a different fear and a different threat which is the threat of outsourcing my colleague alan blonder and i did a study in 2009 where we looked at jobs in the u.s and we tried to determine whether the tasks that are being done can be done by a worker in india or in china whether the work could be done remotely and then shipped back to the u.s either by a cargo ship or or uh over the internet and we had a similar conclusion about 25 of jobs were at risk now those jobs overlap with the jobs that are at risk from the technology they're not one in the same but they overlap if you look by industry the oecd study suggests that food preparation is at the highest risk what does this mean well manufacturing plants that prepare food or even restaurants starbucks doesn't need employees all of you i'm sure have made nespresso espresso by yourselves tastes almost as good as starbucks a high quality machine can create a latte or a cappuccino for you yet starbucks has not taken the step to replace workers with equipment partly because the customers like the interaction with humans so there is a social constraint as well as a technological technological constraint as to what type of work can be done by technology construction this actually surprised me and i hope they're right because construction has been a sector with incredibly slow productivity growth this is one of the reasons why it's so expensive to build roads and bridges and homes i actually visited a company in spain that was working using drones to add to construction and just to deliver equipment tools if workers on one part of a house and the supplies are on another part takes a lot of time to transport those materials and that's something that drones could do i think this is an area where there's tremendous opportunity uh to help people afford shelter basic necessity cleaning tito bori told me earlier today that pretty soon equipment will be able to wash and fold his clothes for him and press his clothes and there's already equipment that'll vacuum your house without you being there driving driverless cars have gotten a lot of attention at the bottom of the oecd forecast was teaching and i have to say this is a little bit depressing to me because productivity growth has been extremely slow in education education is the last sector to see progress we still teach very much the same way we have historically or at least the resource input is about the same and here's an area where i disagree with the oecd i think there's tremendous potential for artificial intelligence adaptive learning to help complement the way that humans teach where students can work on math problems and the computer can quiz them based on their answers determine where they need additional tutoring to provide that information to the teacher who could tailor lessons based on the students strengths and weaknesses and one of the reasons why i'm optimistic about the future is that i think that we will see progress in using technology to train workers in the future and that will help workers to adapt to a new environment in the job market this chart which is probably hard to read shows you estimates for oecd countries on the fraction of jobs that are at risk blue is a significant risk 50 to 70 percent of the jobs would change and beige is greater than 70 percent risk so italy is on the relatively high end the us is on the relatively low end for the oecd but you can see these estimates are not too far apart fifty percent versus forty percent the oecd created a graph of the share of jobs that are at risk of being automated versus gdp per capita you can see that italy is right here you'll notice this line slopes down uh countries with lower gdp per capita are at greater risk within the oecd the mckinsey study gets the opposite relationship now they're looking at a broader group of countries so kenya with a very low gdp per capita has the fewest jobs that are at risk that's in part because half of kenya's economy is agricultural the oecd doesn't think that those jobs face a very high risk of being automated sorry mckinsey doesn't think that those jobs face a very high risk if you look because i'm sure you're curious about italy it's on the higher end again so either in the oecd study or the mckinsey study italy faces compared to other countries around the world are relatively high risk of seeing jobs automated similar to the u.s u.s is similar to italy this is a very colorful graph the mckinsey report did something which i thought was clever they coded the countries using different colors based on the age of the workforce and one reason why i think this is very informative is that older workers in particular face greater difficulty if they're displaced if they're displaced for any reason if they're displaced because of trade if they're displaced because of technology uh or because a company happens to close because there was not enough demand what it produced went out of fashion and italy is one of the oldest countries so not only old country old people in the country which creates an even greater challenge for making a transition to a new set of jobs i mentioned earlier my greatest concern is the impact of technological change and the quality of jobs and particularly on downward pressure for earnings for low wage and less skilled workers these two charts show you estimates based on work of the council of economic advisors by my predecess by my successor jason furman from a new study that jason just released this week where he finds using a similar methodology to the oecd that low-paid jobs face a much greater risk of being automated that's in part because tasks that are being done by less skilled workers tend to be less complex more routine and if you look by education work that's being done by less skilled workers is also at greater risk of being automated so i think this can exacerbate problems that we've had with inequality and will create even greater challenges going forward but i don't want you to panic even though italy faces a high risk of having jobs being automated i think the wave of technology that we're seeing is not terribly different from what we've seen in the past jobs have been changing for a very long time i went to the help wanted ads in the new york times from 1950 a week ago because i was curious to see what types of jobs were in demand in 1950 and uh if you look there are a lot of jobs for comptometer operators anyone know what a comptometer is comptometrist 1950 you could have gotten a job as a comptometrist comptometer is a mechanical adding machine my father who graduated college in 1952 didn't remember what a comptometer was and he was an accountant um how about long distance telephone operator you know the people who used to take out the wires and plug them in a lot of jobs have disappeared because of technology if you look through the old help wanted ads you would be encouraged because work has been changing for a very long time and we've adapted to these changes even some jobs like being a dental assistant i would not want a dental assistant who was trained in 1950 to work on my teeth the tasks that a dental assistant does today is totally different than what a dental assistant was doing in 1950 and the other thing you'll see is we've made tremendous progress in the us because we used to have separate help wanted ads based on sex and race so it says girls are wanted as long distance telephone operators counter girl these ads also would say a black person was desired to work as a maid white person was wanted for a higher paying job now this type of discrimination is illegal in the u.s today and i think that's a sign of progress so one thing i've done recently is to look at how jobs have evolved i wasn't able to go back to 1950 but i went back over the last 17 years back to 2000 and i looked at new occupations that the bureau of labor statistics recognized for the first time in 2000 or in 2010 which is when they updated the occupation codes and 54 three-digit occupations were added some examples include desktop publishing wind turbine technician aerobics instructors numerical tool programmers web developers those are examples of new occupations that the bureau of labor statistics didn't think were important enough or big enough or didn't exist before 2000 for them to keep track of them for them to have a separate category and then if you look from 2000 to 2017 almost half of the net job growth in the us took place in the new occupations 44 so we had 11 million jobs added since 2000 5.1 million are in these new occupations that didn't exist if it weren't for these new occupations job growth would have been much weaker in the us over the last 17 years interestingly many of the new jobs are high paying jobs the average hourly wage on the new occupations was forty four dollars an hour the average on the old occupations is twenty two dollars an hour so not all of them are high skilled jobs like an aerobics instructor is not uh necessarily a job that requires a lot of education and training but the average of workers in the new occupations are paid relatively well now the reason why i suggest we don't need to fear technological change is that the pace doesn't look like it's particularly faster than what we've seen before and in fact there's some evidence it's slowing down i did the same exercise looking at jobs and new occupations back in 2000 where i looked at the preceding uh 30 years and over that period well over half of the net job growth was in new occupations so in some sense i think we're sort of seeing less turnover in the job market when it comes to occupations this chart shows you how industries have evolved in the u.s since 1850. back in 1850 over half of americans were working in agriculture you can see manufacturing wasn't especially big agriculture declined because productivity growth was incredibly rapid and sustained in agriculture manufacturing grew more recently manufacturing has been declining that's that's in blue what's been growing of course is services so contrary to wassily leontyaf's prediction we have created new industries to absorb workers who are displaced but the story is not quite that simple because it's not as if a 50 50-year-old agricultural worker then became an auto worker much of the transition took place across generations and as i mentioned earlier older workers tend to suffer through a period of displacement see big losses in income and employment when there are new waves of of technology and i think at least for the u.s that's the group that is in need of particular support to help them make a transition another reason why i wouldn't fear technological change his productivity growth has been very slow i wanted to tell you a story about a conversation i once had with president obama actually two conversations in 2013 he told me he was very concerned about artificial intelligence and the capability for technology to replace service workers and he said you know i know the history i know that agricultural work was disrupted and workers went into manufacturing and then manufacturing became more productive and workers went in to services but where are the service workers going to go when artificial intelligence or robotics can make a latte for you at starbucks and then a week later he stopped me in the hallway and he said i just read something by robert gordon which argued that productivity growth is very slow we've had all of our great ideas in the past there's nothing like indoor plumbing or the invention of electricity sort of on the horizon and i'm worried about very slow productivity growth slow improvement and living standards in the future and i pointed out to him that his concern last week was the opposite that we were having too rapid displacement to rapid productivity growth and he can only choose one dystopia he could only choose one set of problems because they were a conflict with each other now of course he understood that and my fear is more the latter one this shows your productivity growth in the u.s and the far left and italy on the far right average from the decade from 1996 to 2006 and then from 2007 to 2018 productivity growth in all of these countries us japan canada germany france uk and italy has slowed down over the last decade compared to the preceding decade and slowed considerably in the us we've gone from 2.3 percent a year increase in productivity to one percent a year italy you'll notice had a productivity growth slow down even before the rest of the world and over the last decade productivity has essentially been stagnant in italy this is one of the reasons why growth has been so slow in italy and why living standards have stagnated so i think that we need to focus on how do we raise productivity growth to raise living standards technology has both positive and negative effects on employment on net over time they've been positive we tend to focus on the direct effect of technology replacing the work that workers do but there are many indirect effects first of all workers who do complementary things to the technology see an increase in their employment this is something that we're seeing in the us today with workers in warehouses and product delivery with the tremendous growth of amazon which has disrupted retail employment and caused retail unemployment to decline we've actually seen bigger growth in workers in fulfillment centers who package the orders and delivery service workers who deliver the orders so just looking at those two effects on net it has led to job growth and of course better service for customers but there are other indirect effects because of productivity growth because we could produce more with less we're richer and because we have higher income we consume more of everything that's called an income effect that leads employment to grow and then most importantly the technology enables us to create entirely new products and services so we tend to focus on the jobs that are being destroyed by the technology and we don't focus on the jobs like a web developer which is being created by the new technology so my concern is slow productivity growth which suggests that technological change is slower now than it had been in the past and then some other related changes that come about from the technology not that it destroys jobs but that it disrupts careers for older workers as i mentioned makes it very difficult for them to make a transition to new sectors creates greater inequality which i mentioned before related workers lose bargaining power when the technology could do the work of workers labor unions have less power over companies because the union can be replaced by technology and we're also seeing companies assert themselves particularly in the us using practices like non-compete agreements or non-poaching agreements or mandatory arbitration agreements which worker which weaken workers bargaining power and causes lower wages and then a related phenomenon that i want to conclude by talking about is the rise in self-employment part of this is enabled by technology you've heard about gig work i actually spoke here a couple of years ago about the growth in platform work digital platforms sometimes this is called the app economy because there's an app for getting a hotel room or getting a car or ordering a book on amazon and that has helped to support the rise in self-employment now italy stands out italy had very high rate of self-employment this is based on work i'm doing with tito and others and self-employment in italy has actually been edging down although dependent self-employment workers who are dependent on just one client has been has been growing in italy uh in the u.s and the uk based on the best data we have available self-employment has been growing a prime example of this is uber the blue line shows you the number of uber x drivers in the u.s uberx is the low quality service it's kind of confusing because the terms are different in europe but you don't have to worry here in trento because when i tried to use uber it told me it's not available there are now almost 500 000 uber drivers in the u.s probably around 150 000 lift drivers which is a competing service and we've seen the number of drivers grow number of taxi drivers has declined but the total number of drivers if you add together uber lyft and taxi drivers has actually increased partly because the technology makes it cheaper for people to get a ride makes it easier the convenience is greater and that's increased demand for ride services from both taxi and uber combined this is probably hard to read this is based on a new study that tito presented for the first time last week and italy is behind the us and the uk in terms of the fraction of self-employed workers who are gig workers who are finding work through a platform but because italy has a much higher self-employment rate interestingly in all three countries about three percent of workers are finding work through the platform economy so it's still very small but self-employment in in the us and uk is growing in italy it's already large and a concern i have is that the self-employed lack many of the protections that traditional employees have in the us the protection that workers want most is health insurance so i did a study of self-employed workers where i gave them a menu of different benefits to choose from that the government could help them to obtain retirement savings unemployment insurance sick leave health insurance life insurance workers compensation insurance family leave disability insurance by far the number one choice with health insurance a distant second was help with retirement savings in italy this is not as colorful because tito made the slide also not in the same order but in italy retirement savings is the top priority now health insurance wasn't provided as an option because you have universal health insurance coverage so let me just conclude by saying there are two directions that policy can go one is to try to block progress to prevent change and that would involve policies like taxing robots which has been proposed opposing science i thought people might laugh about that in the u.s we have politicians who are actively opposing climate science we could try to force demand to raise employment in old jobs the trump administration uh is considering requiring power plants to use coal to produce electricity which i tweeted today is perhaps their worst economic idea they've come up with yet not only would it be bad for the environment it'll be more expensive for consumers and for businesses which is going to reduce employment it can block online platforms like italy does with uber and of course this spills over to anti-trade policies tariff policy immigration policy or second route is to try to embrace the new technology improve jobs prepare for the future which would involve investing more in education and training having lifelong learning expanding social protection to the self-employed as i mentioned before helping displaced workers make a transition providing income support to older workers who are displaced now my own preference is that the second route is better for society but if we don't make progress doing a good job in the second route what we will see is politicians push for the first direction because workers will be scared and will have legitimate concerns that the technology will affect their living standards so that's the message that i want to leave you with is i think we need to do a much better job cushioning the negative effects of the technological change thank you together with professor kruger we had agreed that i was supposed to stop him after half an hour but i didn't have the heart to do that and i hope you agree with my decision it is very interesting to try and understand the future that is ahead of us last sunday mr stephanos carpet the director for social affairs and jobs at oecd will present the latest data i would like to be here on sunday as well but unfortunately i won't there are many many points i would like to stress but i shall receive myself well let me recall that we have 25 to 50 percent of jobs that are at risk before of innovation although professor krueger says don't be afraid this has happened in the past well in italy the situation seems to be worse than in the united states but actually we knew that already but the most fascinating challenge resides in the fact that technology technology change will be more scary if productivity is low so we should be scared because we've seen terrible data regarding italian productivity they're appalling now we have about 30 minutes for questions and i would like to abuse of my position and ask the first question professor kruger we have seen that there is a higher social risk in italy and that we have a productivity issue our labor market and our income distribution must be reorganized so in your opinion which could be the effect of what we refer to in italy as citizenship income which is a basic income guaranteed by the state to every citizen providing certain terms are met i mean if you were the president of the italian government if you were a prime minister would you suggest this kind of basic wage for everybody i think uh first of all um thanks for not appointing me president or prime minister i understand that job was just taken um you know as you mentioned i think italy's number one problem is low productivity growth and the question is how can you raise productivity growth create higher income growth and greater employment i think those are italy's challenges i am not doctrinaire when it comes to universal basic income i'm actually doing research on a program in kenya where we're providing universal basic income to individuals and villages about thirty thousand people are participating we randomly selected the villages we're transferring about twenty five dollars a month to every adult age eighteen and over over their telephone uh talk about technology using the m-pesa system and when i visited the villages i was struck by the different uses of the funds that were providing for food for school fees for their children for medication some are using it to start businesses some are using it uh to support family members and uh i'm very much looking forward to seeing what we learned from this study hopefully in a few years you'll invite me back it's going to be a very long-term study up to 10 years for one of the groups that's getting getting the funding a concern about universal basic income programs is that they can discourage work incentives if people are receiving a generous enough income why work why invest in education to raise income through the job market and one of the goals for studying this program in kenya is to look at the effects on work now these people have such a low standard of living it could actually increase work unlike in a country like italy or the u.s if someone can't start a business because they don't have the funds but now they have the money to buy fishing nets and to have a fishing business which they were doing around lake victoria it could actually increase employment if someone can't afford health care and can't work because they're sick because they didn't get health care this could actually increase employment i feel differently about universal basic income in a less developed country where people are just barely surviving than i do in a more advanced country like the us and italy for one thing it's a very expensive program the budget in italy is not in great shape it's not in great shape in the u.s either i would recommend to italian policy makers to instead use resources that they would consider using for citizenship income basic income to try to bring industry to regions of the country which are lagging behind to increase demand there to help support workers to train to invest in basic education i think those activities can both increase employment increase income and raise gdp raise productivity growth and the concept that i think is important is basic minimum opportunity that every person should have a level of living standards so they can take advantage of the opportunities that exist if you can't receive health care because you don't have universal health insurance or because you're poor then you don't have basic opportunity if you don't have access to education then you don't have the tools you need to take advantage of opportunity if you don't have adequate shelter if you can't feed yourself so you go hungry then you don't have basic opportunity and i think what we're doing in kenya is providing enough income for people to have basic opportunity in the us i think we meet that standard already which is why i've not been a supporter of basic minimum income in the u.s i've supported more targeted programs to make sure that those who are disabled and unable to work can live in dignity and can support themselves the elderly who are retired and this is a concern among many italians given the way that retirement savings was ranked for the elderly who can't work and may face health problems i think that is a more desirable economic approach but i learned when i worked in the government that the best shouldn't be the enemy of the good so i don't take that hard a stand and i think this is an area where research will help us to learn more about the average incentive effects in well we have this uh opportunity of citizenship now for kruger if he wants to become our future prime minister and so short questions please without introduction if you can you just give name surname and also your code if you are in the army fact that there is a very high percentage of jobs at risk of being suppressed and specifically low skill low low-wage jobs my question is is really that so if you if you come from 40 years of pressure on wages stagnant wages which gives us a situation both in italy and in the united states where you have millions of jobs at very low pay why automating a job like picking tomatoes when you can have people doing that for two dollars an hour so is is this not a contradiction in the analysis that's a very good question so there are two parts to my answer one is i completely agree that there is a greater incentive to develop technology to substitute for human labor in jobs that are more expensive which have higher wage there's also a scale effect so if you think about investing in the technology and the research big occupations would have have higher return because there are fixed costs for the investment that said there's also a technological barrier and the work that's done by less skilled workers tends to be more routinized and at least with the current technology that's available or that's foreseen in the near future that's the dominant factor so i think what you said is exactly right it makes much more sense to invest in technology to try to replace accountants and lawyers and doctors the problem is that the work that they do is more difficult to replace with technology not saying that parts of their tasks can't be replaced but the job as a whole i think is more difficult to replace with technology good evening yes my name is frances camille university of bologna i would like to go back to something you said during the last slide the gentleman is speaking english to prepare to be ready for the technological progress and i was wondering whether this view implies a conceptual framework in which technological change and innovations are somehow unstoppable inevitable and more specifically whether um people people outside this room can be scared from this view and we are witnessing like huge political shifts in political consensus in our countries i believe also in the united states the election of uh president donald trump showed us something in this sense that somehow are seeing us that people maybe don't like this idea of a technological change which is unstoppable because technological change disrupts our routine steals our jobs jobs somehow and so i would like i would be curious to know your idea about this problem from a also political and social point of view thank you very much first of all i would say donald trump did not run an anti-technology campaign other than climate change he he had uh he i would say he invented other fears he ran an anti-immigration campaign he ran anti-trade campaign anti-minority campaign and he was willing to cross boundaries that previous politicians in the mainstream had respected in in the u.s now it's possible that people some people and also like to remind this audience that donald trump lost the popular vote by 3 million votes in the u.s so his appeal was to a minority of american voters but it's possible that because of technology and the rise in inequality that we've seen people in his base were more receptive to those negative messages but the the message wasn't i'm going to block robots it wasn't computers are a bad thing and it wasn't i'm gonna block platform platform jobs so i think the dynamics in the election in the u.s was a little bit different but to your point i don't think in the grand scheme of things that technological progress is inevitable you know we had the dark ages um the time between copernicus and galileo was a long time and of course galileo was met with a tremendous amount of resistance so i think the political environment the social environment does um does help to shape the pace of technological progress and the nature of technological progress and i think that's probably more true today than it was centuries ago because so much research now is dependent on government funding research in microelectronics and in medicine and in space exploration you go on and on so if countries around the world cut their research budgets for academia for scientists if they reduce government labs that'll slow the rate of change and i think it will also slow the improvement in living standards more likely in my opinion is some countries may go the route of trying to block progress and they'll fall further behind other countries that embrace progress so um not being able to use uber is a small example but that's going to affect tourism and it's going to affect the tour tourism industry and countries which make it easier to use technology are going to are going to move ahead at a faster rate now i think the world benefits and this is a message we don't convey enough the world benefits from discoveries elsewhere the example i like to use is lasik surgery and the lasik surgery has been a tremendous benefit for people it was discovered by by russian doctors so that's an example where we benefit from technological progress that takes place in other parts of the world kind of unexpected places of the world so i think it's very difficult to know where discoveries are going to come from and i think we would be as a whole in better position by taking the second strategy and countries that choose the first strategy i think will likely fall even further behind me i work in an employment center in tuscany and i am an employment consultant and there is a lot of resistance on this universal universal basic income and well renzi has already introduced two measures and that led to the appearance of a lot of poverty and besides that we we have a very low level of skills in our workers we have a very high number of people who are unemployed but these people have a very low level of skills since you have such a large experience also outside the united states what could be the recipe be it boyeri or other professionals or all the professors who are present here and all the contributions you have provided speaking about labor what is your advice because we have very very low skilled workers and i'm speaking of tuscany i'm not speaking of the south of italy the use of computers in our country is middle ages that's what i think well don't don't overdo it please first of all i love visiting tuscany um you know i i think there's no silver bullet here and i think it's a very difficult challenge i think for younger people using the money that would otherwise go to basic income to provide support for them to get training in education make sense and for older workers i think it's very difficult for them to retrain it's it's just just hard historically and there what i have suggested is what's called wage insurance wage insurance means that if someone had a job that said paid 20 euros an hour and they lose that job and the best job they could find would pay 10 euros an hour they don't want to take a job that pays half of what they were making before the government could fill in the gap could ensure the law so could say we'll we'll give you another five euros an hour so that makes 15 euros an hour when you combine the payment from the company you could do that for a period of time where the worker might advance so that his or her salary is increased we have a program like that in the u.s for workers who are displaced because of trade it's worked very well it's just very small and i think one of the shortcomings in the us is that we kept this program it's only for workers over age 50 so sadly i would qualify now and we've kept it for a small group of workers who could point directly to trade as a reason for displacement so i used to make television sets and now they make the television sets in japan or in korea my factory closed but what about the workers who work next to the factory at the restaurant where all the workers would come for lunch and those those workers lost their job too they would not qualify and i also wouldn't make a distinction if a worker lost their job because of new technology for a wage loss insurance system and i think that is a a good alternative to the way we provide unemployment benefits in the u.s but i don't have the delusion that this is an easy problem i think preparing workers for this new environment is very difficult so i commend you for the work that you do in tuscany yes hello my name is giorgio pietrabista from bocconi university uh i feel one of the main concerns in this whole history is that the displacement of workers is very geographically uh i don't know how to say concentrate but and so my question is briefly how are we going to address this issue given it that it is i think a very very big issue because the distribution is not even across country and within countries thank you very much so that that is a great question and uh over time i have become more convinced that we need a place-based policy the advice i used to give is well people should move from one region to another there's more opportunity in one region that that helps and i think there is an aspect of that but that's not a perfect solution what about the people who remain they're now in even worse shape and we've seen the very same problem in the u.s in the u.s we have a division between the north and the south and in the north or northeast north central we have industrial cities like detroit and cleveland that have been devastated by the decline in manufacturing and their problems only grow worse if the most ambitious younger workers move to the coasts where there's more opportunity then their fiscal situation is worse there's less dynamism less activity in those in those cities so i have evolved in my views and um yes i think mobility is good but i think we should also pursue policies to help support areas and usually these areas don't have just one problem it's not just a problem of bad schools it's not just the problem of crime it's not just a problem of lack of employers wanting to hire workers it's all of those things so i think we need a comprehensive place based strategy and this is something that i spoke about marco was kind enough to mention my interest in rockonomics i gave a speech at the rock and roll hall of fame towards the end of my time working for president obama and uh that's in cleveland ohio and i thought what better place to talk about these types of issues so i talked about place-based policies uh in in that speech and there are many spillovers this this is another point which i think economists have learned in large part from the work of enrico moretti and others that there are spillovers across across areas and you could have a virtuous cycle where an area starts to improve and then it improves even more kind of takes off or you could have the opposite a downward spiral and i think using the tools of government to try to put us in a more virtuous cycle where you get the benefits of the spillovers is good in a number of respects and i think it requires careful thought i think you need to think about what the resources are i use the example when i spoke about this to president obama about chicago and cleveland and the president said to me he chose to live in chicago in the late 1980s chicago and cleveland were very similar then chicago was going through a very difficult transition at that point it had a strategy to make itself a transportation hub it had a strategy to make itself a top place for universities with northwestern and university of chicago it had a strategy to make itself a destination and cleveland just went on a downward spiral but at the time it was not so obvious that chicago would turn into one of the greatest cities in the world and that cleveland would be in such difficult times so i think looking at the assets and the resources that a particular area has so in the south for example of south of italy i would think tourism is a natural area to try to try to improve now i would also look for ways of leveraging growth and tourism to create jobs in other sectors as well from ims i read your the research you did with harris and the cats and holders on gig economy and you came out with this idea of a new third category of workers the so-called independent workers so the question is how's it going there is acceptance for this idea in the united states and more general is the gig economy becoming more regulated more what regulation on the gig economy if there is now more regulation on the gig economy than respect to the past yes so to review for others who haven't read my paper with seth harris yet we looked at what's going on with uber and taskrabbit and other companies in the platform economy and concluded that the workers don't fit one box or the other we have a box in the us which says you're a traditional employee you are covered by overtime requirements you're covered by the minimum wage your employer with withholds your taxes and provides other benefits and the alternative group is you're self-employed you get to choose where you work when you work you have to pay your own taxes you have to keep records for that you have to pay for your retirement both parts of the payroll tax what the employer would pay and what the employee would pay you don't receive minimum wage coverage because who you're going to force to pay you the minimum wage because you're self-employed and who's monitoring your work hours and company like uber falls in between now uber chose a strategy of classifying their workers as independent contractors that's the second model they thought that that was legally justified because the workers choose when they work they use their own equipment they can work for multiple companies at the same time uber doesn't prevent one of the uber drivers from having an app on for lyft at the same time doesn't prevent the driver from doing a personal task while they're waiting for someone to request a ride at the same time uber tells the drivers how much they can charge the driver doesn't get to set the price whereas a independent contractor who worked in construction could typically say i want to charge a certain price so they fall in a gray area taxi drivers in the us are mostly independent contractors as well seth harris and i looked at this and said it doesn't fit in either box and that wasn't only our opinion when judges were asked which box do they belong in a judge said we have two boxes and this is like trying to fit a round peg into a square hole so we thought it made sense to create a new category for workers who meet this type of description where they get to choose where they work when they work yet there's an intermediary who's matching them to the client who's matching them to the customer and some protections would make a lot of sense in this environment like civil rights protection anti-discrimination currently if you're self-employed it's not illegal for someone to refuse to hire them because of their sex or because of their race or because of their ethnicity i think that's immoral and i think we can extend the same protections for civil rights um unemployment benefits i think we could figure out a way to provide unemployment benefits other benefits oh health insurance i would have the intermediary make a contribution to health insurance benefits the way that companies make a contribution now they're required under the affordable care act other benefits make less sense and i think could make the system more rigid i think as much as a supporter i am of a minimum wage for work in this situation where workers could be working for two companies at the same time where no one's monitoring how hard they're working i think the minimum wage makes less sense time and a half for overtime when they get to choose their own hours i think makes less sense so that was our proposal that we create a new category we extend many benefits to them but not all of the benefits that traditional workers get and it turns out that both sides hated our proposal senator mark warner who is one of the great american senators right now said that seth seth harris and i had a wonderful proposal it was a great compromise and we managed to piss everyone off which may be a mark of a good compromise the sides are not ready to compromise yet so you asked what's the state of the law there has been a lot of interest in providing portable benefits uber would probably like to provide health insurance and life insurance to the uber drivers they don't do that because they're more likely to be ruled to be an employer if they do that so one proposal which receives a wide range of support is to have universal portable benefits for workers that that there would be a an exemption where they could provide those types of benefits there's been very very little progress in this area it's very complicated uh politically it's very very difficult because of the way congress is set up there are multiple laws that determine whether someone someone's an employee they could be an employee under the fair labor standards act and an independent contractor under the tax law and to try to make this consistent politically is extremely difficult because different congressional committees have different jurisdiction and i don't envision the congress doing much in the near future i think what could cause something to happen is if the courts reach a series of conflicting and and untenable decisions and that's what we saw in the u.s history if you go back to workers compensation insurance which is benefits for workplace injuries we had a grand compromise once the courts made the system unpredictable possibly very expensive essentially turned it into a lottery which didn't work for anyone and our court system may be moving in that direction because we've had a series of conflicting rulings the most important ruling recently was in california where the state supreme court adopted a new framework for determining who is an employee which makes it more likely that independent contractors will be classified as employees but that still is evolving i actually thought of concluding but i can say there's a person who's been there there with raising the hand for 10 minutes and i'm sure he's got cramps at the lsc and my question starts with richard baldwin's and his book about the great convergence and he says that the great the third unbundling will be about separation of labor from laborers so with that people from developing countries will be able to compete with people in developed countries via terror about robotics until the future so the question is which impact will that have on wages and jobs in the developed countries thank you very much a good question and i have to confess to not having read richard baldwin's book yet i referred earlier to a study i have with alan blinder where we did a similar exercise where we looked at the tasks that are being done in jobs and we made an external determination on whether that work could potentially be done remotely and provided to the us or we ask workers for their judgment whether it's conceivable that a worker sitting in india or an egypt or in china could do the work that they do for their customers for their employer and as i mentioned we found that about 25 percent of jobs in the us meet that category they were not all concentrated at the low end what was interesting and makes it different from the research that's been done on artificial intelligence and robotics they were across the spectrum in terms of skills so i think that the impact of outsourcing which again is of a magnitude of a wave of change that we have adapted to in the past i think that would be spread more uniformly throughout the skill distribution so i think the impact on wages would be more neutral i would like to thank the festival for hosting us i would like to thank the interpreters for their job the interpreters would like to thank professor krueger and professor zetherine thank you very much professor kruger for being here and perhaps you remember the blue oster cult a rock group of the 70s saying don't fear the reaper so don't fear death don't fear the future what we've learned today is maybe that we should not be afraid of robertson ai provided that we managed to take on the challenge and how we take on the challenge depends on us and on the people who govern us on our administration on our politicians so we are in their hands but we're also in our hands enjoy the challenge and enjoy the festival and keep pressing because we will be successful and we shall make it thank you you