Contrary to the prevailing narrative that job insecurity is on the rise due to new “industry 4.0” technologies, jobs across the U.S. economy are more secure now than at any point in the past two decades, according to a new report from the Information Technology and Innovation Foundation (ITIF), the leading think tank for science and technology policy.
According to the report, U.S. workers now have a 5.8 percent chance of losing their jobs in any given quarter, down from a 7.3 percent chance in 1995. Instead of trying to slow down the pace technological change based on unfounded fears, ITIF argues policymakers should embrace measures to speed up innovation.
“The prevailing narrative of accelerating job loss due to new technology is just a myth,” said ITIF President Robert D. Atkinson, who co-authored the report. “The number of workers laid off each year as a share of all jobs has actually decreased steadily since the mid-1990s. Moreover, despite major employment disruption in the early stages of COVID-19, the rate of job loss has returned to the pre-pandemic trend line.”
Using data from the U.S. Bureau of Labor Statistics (BLS), ITIF examined 10 industries—construction, leisure and hospitality, professional and business services, retail trade, transportation and warehousing, wholesale trade, financial activities, information, education and health services, and manufacturing—and found that in all of them, rates of job loss were lower in Q3 of 2020 than in 1995.
The COVID-19 pandemic led to a spike in lost jobs in Q2 of 2020, with the leisure and hospitality industries being hit the hardest at 45 percent. But Q3 of 2020 shows that the trend of job loss rates continues to decline among all sectors, with the leisure and hospitality industry returning down to 9 percent.
According to ITIF’s analysis, relative job security remained stable from 1995 to 2000, with workers facing a 7.5 percent chance of job loss. Unsurprisingly, the two major recessions in the 2000s increased job instability and layoffs. Since then, job losses have consistently declined across the economy, and most recent BLS data indicates a similar trend in the post-pandemic recovery.
However, ITIF warns that job security does not necessarily translate into prosperity. On the contrary, economic disruption is often a driver of growth, as companies adopt more efficient technologies and new business models to gain market share.
Policymakers should not listen to the pessimists who counsel slowing down technological change, say the authors who instead recommend that they do everything possible to accelerate technologically-driven productivity growth, while giving workers the necessary tools and supports to more easily transition to new jobs.
“Perpetuating the fallacy that job insecurity is on the rise will only hurt the country’s competitiveness and ability to innovate,” said Luke Dascoli, an economic and technology policy research assistant at ITIF and co-author of the report. “For innovation to happen, the United States economy needs full and constant support to accommodate dynamic technological change and a workforce capable of evolving alongside the new requirements.”