Tech Innovation & Economic Inequality

Jobs are soon going to be automated away faster than we can create them.

A prime example of this is driving jobs. Over 2.8% of jobs in the U.S. are as some kind of driver — e.g. truck, bus, or taxi. While this percentage may not sound like a lot, we’re talking about over 4 million people possibly being displaced in the U.S. alone. [1][2] You know all those Uber drivers who are upset about rate cuts? Just wait until autonomous vehicles take over.

Autonomous vehicles may seem far off, but they’re just around the corner. Elon estimates that Teslas will be fully autonomous in late 2018 and that legislation will allow them to drive without a human only 1–3 years after that. Driving on the freeway is the easiest thing to automate and truck drivers happen to make up for 77.6% of those 4 million driving jobs. Autonomously driven tractor-trailers (those big trucks on the highway that are driven by 1.8 million people) are already being tested on public highways as of May 2015. [1]

It’s not just driving jobs

Another industry that is ripe for disruption is the food industry.

Heard of eatsa? They make quinoa salads in LA and SF. While the food preparation isn’t automated (yet), you’d never know it — customers never even see or interact with an eatsa employee. You submit your order on an iPad, swipe your credit card, wait a few minutes, and pick it up from a cubby in what looks like a giant vending machine. And for only $6.95 a salad!

eatsa: “Bold, fresh and flavorful customized quinoa bowls that are prepared blazing fast, at an unbeatable price point.” Image License: https://creativecommons.org/licenses/by-nc-nd/2.0/

Or there’s Momentum Machines. They’re working on a machine that can, on its own, make a growing list of foods including salads, sandwiches, hamburgers, and “many other multi-ingredient foods with a gourmet focus.”

Soylent sells a meal replacement beverage that claims to be nutritionally complete and costs around $12 for an entire day’s worth (2000 calories).

I am willing to bet that in 5 years automated food will be as hot as autonomous vehicles are today. We’ll have fully automated restaurants with consistently healthier and tastier food prepared in less time and for less money.

How many jobs in the U.S. are food service related? Over 10 million (or 7.1%). Other soon automatable jobs such as cashiers, bank tellers, information clerks, bookkeepers, loan officers, etc? Easily another 10 million. [1][3]

Contributing to economic inequality

You’ll notice that these types of jobs (automatable) mostly fall into or between education categories “no formal education” and “some college, no degree”. The jobs that are being automated away are those that require less education and are more likely to be held by the working class.

What sort of jobs will be created by these innovating companies? Ones that require highly skilled employees with at least a Bachelor’s degree. Who’s going to profit off this innovation? The people who run and work at the companies driving it. Investors, executives, and highly skilled and educated employees.

You can see how this innovation contributes directly to economic inequality.

But innovation isn’t a bad thing

This is where it gets super complicated. Autonomous vehicles will have tremendous impact on the safety and efficiency of transportation. Automated restaurants will deliver healthier food for less money in less time. These seem like outstanding, innovative things, yet both seem to have negative impact on economic inequality and therefore the American workforce.

I’m a technologist, not an economist. [4] I can’t help but get incredibly excited about the future and the innovation that’s coming. But like many Silicon Valley residents, I’m also an idealist. I want every person to have an equal shot at a great life regardless of income — access to great education, shelter, quality nourishment, healthcare, and time to spend with their loved ones. And no I’m not even running for office in 2016.

Right now too many people aren’t getting that shot, in the U.S. and especially elsewhere in the world. These are the problems that Silicon Valley should be solving.

Shoot for a 10x improvement

Since the number of jobs that require less skill and education is almost certainly going to trend down, I feel strongly about what we should do: drastically lower the cost of living a great life to the point where everyone can afford it. Since earning an honest living will only get harder, we shouldn’t punish people who couldn’t have seen this coming.

One of my favorite lessons I’ve learned from the tech industry (and especially from working at Facebook) is not to chase 10% improvements, but to chase 10x improvements. Incremental improvements are nice but order of magnitude improvements are where serious innovational impact happens.

Call me crazy, but here’s the order-of-magnitude-better world I’m picturing:

• Shelter — Every person gets a bed to sleep in with a roof above their head.
• Food — Every person gets three meals a day of food that gives them the nutrients they need to thrive.
• Education — Every person gets an education that allows them to follow the career path they want. They are able to get a Bachelor’s degree without having to worry about affording it.
• Healthcare — Every person gets access to the healthcare they need to stay healthy.
• Time — Every person gets the above while still having time to spend with their loved ones, raise children, sleep 8 hours a night, do yoga, or whatever they need to do to enjoy their life.

All people should be entitled to the above regardless of their income. I’d estimate that the above currently costs around $60k/year for a two-parent, one-child family in an area with an average cost of living. How can we turn that $60k into $6k? We need to make it all cheaper by innovate on housing, food, education, and healthcare.

YCombinator is already investing in this future

What does Sam Altman, president of the biggest and by far most successful startup incubator have to say about economic inequality?

They’re looking specifically for startups that lower the cost of living “an awesome life”.

What you can do

Some of this applies to startup founders, some to people in technology, and some to everyone.

• Sure, Snapchat is cool. But does the world really need more photo/video sharing apps? Align your mission with lowering the cost of living. Stop wasting time building shit for rich people.
• Shoot for that order of magnitude (10x) improvement. Figure out how to feed people 3 quality meals for $1 a day. Figure out how to educate people without them needing to dish out $100–200k on a Bachelor’s degree.
• Eradicate your complacency. I feel like people who accept the status quo are a lot of why it takes so long to change. Be those consumers who demand the brighter future.
• There could soon be millions of people seeking employment. What business could you start that would enable them all to make a living from the comfort of their own home?

There’s a lot of negative focus on economic inequality. What if the core problem isn’t the inequality itself, but that the price of living a quality life hasn’t fallen to embrace inequality? It seems like technological innovation is only going to increase inequality — but innovation isn’t a bad thing! Rather than attacking or stifling innovating let’s embrace it and use it to help everyone afford a great life.

Thanks

Thank you for reading, I’m really honored you spent the time. I hope you got something out of it.

Thanks to Zaven, Sarah, Brian, Joy, and Jon for reading drafts of this!

If you enjoyed reading this, be sure to ❤ it below — it’d mean a whole lot to me.

Notes

1. Job data heavily drawn from the Bureau of Labor Statistics (data is from 2014). See Taxi Drivers, Bus Drivers, Delivery Truck Drivers, Heavy/Tractor-Trailer Truck Drivers, Total jobs in the US in 2014, etc.
2. This essay is applicable globally but heavily focused on the U.S. because I live here and the data is more readily available. Not to mention trustworthy, have you seen China’s GDP numbers?
3. I’m not saying these jobs (drivers, food service, bank tellers, cashiers) will disappear overnight. It’ll be a transition over many years, but I think it’ll happen faster than you’d expect and faster than it has in the past.
   Take a peek at Geoff Ralston’s post, “The Electric Car”. In it he explains how electric vehicles will be so much better than gas-powered ones that consumers will DEMAND them and there’ll be a tipping point where it becomes quite inconvenient to own a gas powered car. I claim a similar thing will happen with automated food, banks, retail stores, etc.
   I think in general things change a lot faster than people realize. Remember the internet has only been around for about 21 years and iPhones for 9 years. It’s very easy to get stuck in a present day mindset because we’re wired to adapt.
4. I’m sorry if my opinions on our country’s economy seem naive and idealistic — it’s probably because they are. I realize I’m approaching these problems as a software engineer and tech startup founder rather than an economist or someone who’s really impacted by economic inequality. I hope my naivety doesn’t come across as offensive and I’d love to hear others’ thoughts about the issue.