When I opened my email a few days ago, the first thing that popped up was an article from the Brookings Institution titled “The Robots Are Ready as the Covid-19 Recession spreads,” predicting that a coronavirus-related downturn will increase the rate at which American industry invests in labor-replacing automation.
As I have previously argued, jobs don’t matter simply because most of us need to put food on the table. Having a job–even a job we dislike–gives most of us a sense of purpose and identity. (There is a reason so many people die shortly after retiring.)In “The Truly Disadvantaged,” William Julius Wilson noted the significant differences between neighborhoods where residents are poor but employed and neighborhoods where residents are poor and jobless.
The longterm trend was worrisome well before the advent of the Coronavirus: American economic mobility and job creation had already begun to slow, largely as a result of policies favoring larger firms over the entrepreneurial start-ups that were once responsible for the creation of most new jobs. Numerous studies have documented what Brookings calls “a steady and significant increase in consolidation” Thanks to anemic anti-trust enforcement, the number of so-called “mega-mergers” has increased, and as the market power of these huge companies grows, competition decreases. The under-enforcement of anti-trust laws has reduced entrepreneurship, increased predatory pricing practices and economic inequality, and resulted in the concentration of economic growth.
Rather than the vigorous competition that characterizes healthy markets, we have increasingly moved from capitalism to corporatism, or crony capitalism, in which government shields favored industries and companies from competitive pressures rather than acting as the guarantor of a level playing field.
Until recently, people expressing concerns about job losses have focused their criticisms on the outsourcing of manufacturing to low-wage countries, ignoring what is by far the biggest contributor to job loss– automation, and the replacement of workers by machines.
A 2018 study by Ball State University found that just since 2000, nine out of ten manufacturing workers have been replaced by automation. That same year, the Pew Research Center asked approximately 1900 experts to opine on the impact of emerging technologies on employment; half of those questioned predicted the displacement of significant numbers of both blue- and white-collar workers by robots and digital agents, and predicted that those displacements will lead to serious consequences: larger increases in income inequality, masses of people who are unemployable, and breakdowns in the social order.
Forecasts varied widely. One analysis, by the Organization for Economic Cooperation and Development, predicted that ten percent of the jobs in advanced economies will be automated, while scholars at Oxford University warned that 50% of American jobs are at risk. Obviously, no one can say with confidence how many jobs will be lost, or which workers will sustain those losses, but technologies now in development threaten millions.
Think about the numbers. There are 3.5 million professional truck drivers in the United States, and another 1.7 million Americans drive taxis, Ubers, buses and delivery vans for a living. Self-driving cars, which are already being road-tested, could put them all in the ranks of the unemployed.
Think skilled workers are immune? Think again. Reports show accelerating automation of jobs held by skilled knowledge workers engaged in data-driven decision-making. Between 2011 and 2017, Goldman Sachs replaced 600 desk traders with 200 coding engineers. Even medical professionals are at risk: in 2017, Entilic, a medical start-up, reported that its AI algorithm “outperformed four radiologists in detecting and classifying lung modules as either benign or malignant.” In 2016, the World Economic Forum projected a total loss of 7.1 million jobs to automation, including jobs in advertising, public relations, broadcasting, law, financial services and health care.
Automation will obviously create jobs as well as destroy them, but that will be cold comfort to that 55-year-old truck driver with a high-school education–he isn’t going to move into a new position in Informatics.
What does the current pandemic have to do with this longterm trend? According to Brookings:
Robots’ infiltration of the workforce doesn’t occur at a steady, gradual pace. Instead, automation happens in bursts, concentrated especially in bad times such as in the wake of economic shocks, when humans become relatively more expensive as firms’ revenues rapidly decline. At these moments, employers shed less-skilled workers and replace them with technology and higher-skilled workers, which increases labor productivity as a recession tapers off.
America wasn’t prepared for a pandemic, and we won’t be prepared for the civic unrest exacerbated by widespread joblessness. We are going to require skilled leadership, and that leadership will not be provided by the Party of the Past, led by a mentally-ill ignoramus.
Robotics to replace skilled labor? It has already happened. During the spot energy industry recession of the 80’s, huge refineries went silent and flares from towering exhausts that could be seen at night for several miles were turned off to a completely dark horizon in southeast Texas. Third generation refinery workers who were led to believe they inherited life time employment were laid off indefinitely. During the down time, petroleum refining rolled out their radical re-outfitting plans, disassembled most of the refinery, shipped parts overseas to far less expensive labor markets, and reassembled a modern refinery here at home with automation. When the flares reignited the community rejoiced but to short lived anticipation as only 10% of the previous workforce was required to operate the more efficient higher production capacity of refineries here in our own homeland. I have to believe the huge cash reserves of corporate America find in this pandemic the opportunity to rollout their retooling plans and invest in new levels of production that will require fewer people that will render high school diplomas and outdated vocational training … obsolete.
Alan Watts said back in the 1970’s; “Man is going to computerize himself out of existence.”
That has been escalating in recent decades but there may be another side to the Robot question when, per an MSNBC report; the Pentagon has not shipped the promised ventilators needed during this Covid-19 Pandemic because neither FEMA or DHHS has submitted their request with the necessary shipping addresses. Is a Robot needed to use the computer to place the necessary order to save lives? Is “man” needed to program that Robot to use the computer to sent the required order? Robots are not yet capable of creating themselves by using computers to format the designs needed to perform their specific jobs which are designed to replace “man”.
Aside from the Robot/computer questions regarding the Covid-19 Pandemic disaster which is becoming more disastrous due to Trump & Co. lack of knowledge and their concentration on one goal, that of maintaining their hold on our White House, new developments are highly questionable regarding the rising death rate in this country. Why are we shipping medical supplies to China? A much more important question is WHY ARE WE RECEIVING MEDICAL SUPPLIES FROM RUSSIA? As the CNN newscaster so aptly put it this morning, “But what do we owe?”
Maybe we do need Robots in the White House at this time. Or maybe that 55 year-old truck driver with a high school education?
Kurt Vonnegut recognized the new economy of joblessness in his first novel “Player Piano” (1952.) He pictured factories that employed only three people. The majority of the people lived on the other side of the river in sheer poverty,
Let me modify one of Sheila’s statements for emphasis:
“Think about the numbers. There are 3.5 million professional FARMERs in the United States, and another 1.7 million Americans making BUGGY WHIPs and STAGE COACHES for a living. AUTOMATION IS THREATENING THESE JOBS.”
Most of those jobs disappeared long ago. The point is that innovation and automation have been occurring for quite some time. It shows up as increases in productivity in our national statistics. More production per worker. And lately, productivity has been declining rather than increasing as would be the case if machines were replacing workers at a rapid rate. Most recently we’ve had extremely low unemployment as well, suggesting that employment is a function of aggregate demand not technology.
But we are producing lousy jobs – insecure, low paying with uneven hours and few, if any benefits. These issues are fixable. Robust job training, higher minimum wage, policies affecting variability in hours worked, reform to “independent contractor” arrangements, family leave policies, health insurance, retirements accounts etc. And, as Sheila mentions often, vigorous anti-trust and anti-monopsony enforcement and limiting money in politics so that we align the interests of politicians with voters.
You go Sheila. Wonderful daily blog. Don’t know how you do it.
We have been told this over and over again, but we still train people for the jobs of the past.
“Forecasts varied widely. One analysis, by the Organization for Economic Cooperation and Development, predicted that ten percent of the jobs in advanced economies will be automated, while scholars at Oxford University warned that 50% of American jobs are at risk.”
So, what do the displaced workers do? What happens when the slavering beasts keep sponsoring the weakest minds and the most corrupt representatives? Why does the displace labor force keep voting – or not voting – for the very people who are keeping them poor? Forty years of Reagan/post-Reagan/Regan politics and pro-business government – at the specific expense of the working classes – has put our economy on the brink of collapse. Why? Because the monster of greed has blinded the money changers to the basics of capitalistic economies.
De-regulation and unenforced monopoly laws creates inherent instability. 1929, 1985-6 and 2007 come to mind. Attacks on labor denies living wages or wages that allow consumption by consumers, the very engine of profit and economic growth as a whole. It is the CONSUMER, not the banker that makes our economy hum. By sending good jobs to foreign lands corporations make THOSE economies robust, while ours suffers. Those foreign labor sources make crappy wages too, but at least the workers are employed and able to buy stuff.
Our dumb-assed Republicans keep screaming about socialism, but if the government stopped paying un-employment compensation, or eliminated ANY welfare or health care benefits to the unemployed or the poor, those folks would STARVE. Somebody please tell me how an un-employed and un-compensated displaced worker survives. What was the number of Americans who starved or froze to death before 1934 again? Why are capitalists so blind to the engine of their wealth? Greed. Corruption. Graft. Confidence games. That’s why.
Well done, Republican voters. You opt for those very people who are cutting your economic throats. How does it feel to be the mark of the Republican con men and women who wish to take everything you own including your families?
It’s Friday and time for one of my super idealist thoughts….”What if” the really important jobs in our society which are difficult to replace by robots were also well-paid? I mean teachers, home healthcare workers, nursing home workers, etc. The needs for good workers in these roles are growing – the population is aging and many teachers are retiring.
Dream on, Lester.
Lester,
“Dream on, Lester.”
How will we ever recover from the CALAMITY looming before us, if we don’t continue
to DREAM about how to recover from it, before the ax, finally, falls and prevents any recovery whatsoever?
Sheila,
For years I have silently read your words and attended your public presentations. Your intelligence, wisdom, knowledge, and good sense make me a better informed citizen. Today’s blog and many previous blogs have been shared with others. Thank you for your invaluable service to our community.
Randy Trowbridge
I believe that it’s modern human culture to react to the word “robotics” by picturing what we have all seen videos of in terms of how autos are being assembled now or with images of cute little R2D2 machines scurrying around being servant like. The truth is that most “robots” don’t look like that at all. Instead they are little black boxes exchanging numbers. Most nowadays don’t replace people but accomplish additional tasks that just weren’t necessary because they weren’t even possible for people to economically do.
What has been the benefit to society up to now? Massive wealth redistribution from the working class to the means of production owning class. That has been reflected in what we assumed until recently was a endlessly growing securities market. Also it’s what addicted some of their acolytes to TrumPence McConnell.
What to do? Sheila wondered about it the other day. That would be Universal Basic Income redistributing some of the wealth created by automation back to those displaced by it, would be worker/consumer/taxpayer/families, from investors.
Well done to David Kelleher for his contribution today! The Brookings label of The robots are coming could be supplemented with an ancillary label that The robots are already here. Witness online ordering and delivery; paying for groceries without clerical intervention etc. The robots have come in subtle fashion and their presence has been quietly subsumed into ordinary commerce. Retail clerks, truck drivers and especially warehousing centers are and will be paying the price. It will not have been only the virus and offshore production that increases our unemployed count.
I read recently that Silicon Valley is into emotional intelligence and is putting together a robotized version of a psychiatrist. Apparently we can consult with such robot, push the right buttons that tell the “doctor” our problems, and get instant advice. (I wondered as a lawyer how to sue such a doctor for malpractice and concluded that the only available defendants would be its sponsors under some principal-agent theory. Perhaps my paralegal robot could do the research and write the complaint – and handle the discovery.) Assuming the Valley’s success in their venture, are all psychiatrists other than the ones who help wire the robots out of business?
I have written elsewhere of the social as well as the economic effects of wholesale AI. I don’t know what that world will look like, how we are to handle the Puritan ethic of no work no eat in a world where there is little “work” to do via human minds and muscle. Sociologists should have a field day during the transformation (unless they, too, have been replaced).
Aside to Marv – I have some content for our proposed indictment and suit for damages vs. Trump and seem to have lost your forwarding address. Que es?
The appropriate thing to do, would be to approve universal basic income! Robots eventually will not need human handlers even for repair. Artificial intelligence, or AI, Will eventually produce robots that repair robots. Since robots really don’t need a break, they don’t need to be fed, they don’t take vacations, and they don’t need to be paid. So the amount of money that would be paid for humans to do those jobs, it should be put aside by all corporations, this money would then be used for a basic income for people displaced by artificial intelligence and robotics.
Profit margins would skyrocket for corporations after the initial expense of installation is absorbed. Taxes could be taken from the universal basic income, or, the corporations would pay those taxes themselves. Universal healthcare, and universal dietary supplement along with the universal income would be the way to go. But, because of greed, because certain individuals and groups, “you can imagine who they are” would be incredulously moaning about windfall!
But, is that a bad thing? People having the right to exist without having to scuffle to survive? It sounds like science fiction I suppose, but in actuality, it should function well. But like I’ve mentioned earlier, the greed will probably not allow it to happen. The immense savings that have been incurred converting to robotics, would going to the pockets of those wealthy stock owners and CEOs, all the while those that were replaced would be sinking faster than the Titanic!
Gerald,
Forwarding address: 2525 College St. #1308
Jacksonville, FL 32204
E-mail: mgremark@gmail.com
Someday this pandemic will be controlled by a vaccine but our individual and collective memory of COVID 19 will be with us forever. One of those memories will be what we learned about another kind of automation, working remotely, and the good and bad of it. We will have individual and corporate experience about how it, in balance, worked for each of us who did it, and how well it worked for our corporation and our function.
The world will never return to its former shape.
john,
I’m putting together an Advisory Board for P.E.I.S. [PEACE] Systems. Give me a call.
john,
My mobile # 904.338.8351.
Pete – In re the world you see after the virus is controlled > My daughter and I talked about that world today and I raised the issue of what we are to do with the never-vaccine crowd and their mercury phobia. It may be important to know what the still-to-be vaccine contains lest these fanatics keep the virus going among the unvaccinated, and for one reason or another, perhaps some of the vaccinated. Further, and since its Chinese origin started a global problem, when we do come up with the vaccine it should (perhaps via WHO) be internationally available, from Andorra to Zanzibar, and added to the array for babies everywhere if we are to permanently put this horror in our wake.
It’s about safety! Do you want vehicles on the road without a driver behind them? No. Absolutely not.
Any engineer will tell you sensors fail. People have to be at the controls. You simply have to stop these unsafe practices through your vote at the ballot box. Automation makes things safer but should never replace a human even as a back up. Planes fly autonomously correct? But there still is a pilot, but no longer an pilot engineer.
Danger, Will Robinson!
America’s economics are built on the sand of human greed.
It’s sinking.
John, sensors fail, and so do humans. When sensors are perfected to the point where they have a lot less accidents than humans, yes, I would rather have those driverless vehicles on the road.
Regarding the legal profession, think of the hammering personal injury attorneys are about to take. 80% of a typical personal injury attorney’s caseload are auto accidents. Even before we get to driverless cars, you’re going to have so many safety features on cars that accidents are going to become extremely rare. And how about DUI attorneys? Driverless vehicles are going to put them out of business. Not that getting rid of accidents and DUI’s isn’t a good thing. It is. But I have a huge gripe about law schools running up six figure debt on students for a legal job market that is completely saturated.
By the way, Sheila, I personally disagree with this line ” Having a job–even a job we dislike–gives most of us a sense of purpose and identity. ” I have worked a lot of crappy jobs in my life and no they did not give me a “sense of purpose and identity.” In fact, just the opposite. Maybe that’s just me though.