When I was eight, my parents took us to Greece, and used a travel agent to book all flights, hotels, and in-country transport. Three years later, when we went to Italy, my brother and father used the internet to plan the trip themselves. We rarely used a travel agent again.
So when I think about jobs that computers are making obsolete, travel agents is one of the first that comes to mind. And the Occupational Employment Survey proves my intuition correct: at the beginning of the dot com bubble, there were 111,130 travel agents in the US. In 2016, there were only 68,680, a decline of 38%. Yet according to Osborne & Frey’s study of automation (the one I tried to poke a bunch of holes in last week), travel agents have a less than ten percent chance of becoming computerizable. How could this be, given how perfectly the collapse in travel agents since 1999 coincides with the rise of online travel booking services?
Source: Bureau of Labor Statistics and Statista.com
The discrepancy between the employment numbers and Osborne & Frey’s analysis shows me that I’ve been thinking about the possibility of automation the wrong way: machines’ threat to human labor isn’t one of complete substitution. Instead, it’s one where even in industries where humans perform activities that machines can’t replicate, use of technology for information processing make those industries employ fewer people.
In the O*NET survey travel agents receive fairly high marks for originality, social perceptiveness, negotiation, and persuasion. And these are indeed the specialties of travel agents who are still working. If you’re willing to pay, you can have professional design your dream vacation. The ability to find you the bed and breakfast with the perfect atmosphere without you spelling out every detail, or use a personal connection to get you a guided museum tour outside of opening hours, cannot be replaced by machine intelligence, and won’t be in the immediate future. But the thousands of travel agents whose primary functions were storing, processing, and communicating publicly available information have been replaced by technology. This intra-occupational dynamic introduces two questions with huge implications for the economy:
1) Does specializing in originality, social perceptiveness, negotiation, and persuasion scale?
In other words, if all the travel agents who were replaced by Expedia invested time in discovering unique and off-the-beaten-path travel destinations and experiences and offered greater personal service to their clients, could they have preserved their jobs?
If the answer is yes, harm from automation will be easier for society to overcome. Culturally, we expect to be able to earn a living doing things that are not cognitively challenging: call this person, go find this information, read this memo, let me know when this thing happens, etc. Just don’t be an idiot, learn the rules, and keep your job. If we can shift that expectation, so that people understand that work in the 21st century means going the extra mile when it comes to networking and being creative, and change what we teach in school to fit that reality, maybe travel agents can stage a comeback.
It may be that specialization doesn’t scale. After all, the economy has only so many people who have the resources to pay for personalized travel agent service. Perhaps unemployed travel agents trying to get back into the business could only do so by displacing others. If this is the case...
2) Will job growth in other industries balance out the losses?
Perhaps for every occupation like travel agents, there will be bank tellers. Based on the prevalence of ATMs, it makes sense to assume there would be many fewer bank tellers today than in 1999. There’s actually over 43,000 more. Increased economic growth and the lower labor cost of opening a new branch incentivized commercial banks to expand, leading to more tellers overall, despite fewer per branch. ATMs also allowed bank employees to spend more time on socially-intelligent, value-creating activities like engaging with small businesses. Bank tellers are the model case study for automation optimists.
But the bank teller example doesn’t put me at ease. Even if we don’t experience high unemployment, we still see greater returns to capital at the expense of labor, as we have seen for the last forty years. The travel industry isn’t the only one whose need for humans has plummeted as algorithm-driven platforms have boosted efficiency and captured all of the gains. I highly suspect that this trend is a big contributor to stagnant wages and historically-low labor force participation.
And if job growth in other industries can’t balance out the loss of travel agents and others like them, we will have a real problem on our hands. That’s where we’ll need to start considering much more radical forms of redistribution in order to preserve any semblance of social equality.
I’m still undecided as to whether automation will lead to sky-high unemployment, but the experience of travel agents does not bode well. We absolutely need to start emphasizing creativity and social intelligence in education, training, and job performance. And we should also start thinking of a Plan B in case that’s not enough.