The ROI of the Worker in The Industrial Revolution of the 21st Century
As automation is perfected and human labor is displaced in the 21st Century — we move into a new industrial age. Can we use the last industrial revolution lessons?
I grew up listening to my Grandma Stauffacher’s stories about growing up in Madison, Wisconsin during the Great Depression. How times were difficult for the working class and the daily work it took just to get by. I also remember learning about my Great Grandfather Alex Arch’s story about his first job when he returned from the War and he earned $1 for the week. He wanted to frame it but needed to use it. These stories along with all my other family stories tell about the way my family navigated moving from a labor that was based near home to one that was based in an employer. My knowledge of family only goes back to Great Grandparents immigrating and moving right into factory or mining occupations — but with that as a background I reflect on the current change of industry moving from what is being labeled Industry 3.0 to Industry 4.0.
Industry 4.0 is the term that has been used to identify the change from computerization and automation of the assembly line into the digitization of the data and the use of analytical processes to change the manufacturing process. The 20th Century saw the rise of the use of assembly lines in factories and then the transfer to the use of digital controls and Programmable Logic Controllers (PLC’s) to aid the speed, safety, and quality of those lines. That is a transfer from what is now called Industry 2.0 to Industry 3.0. Look at it as a segmentation of the eras in the Industrial Revolution that has been taught in primary school.
My Great Grandparents and Grandparents lived through the stock market crash and the Great Depression. They took the lessons of that era and the grit they acquired and their generation developed social constructs that we know of today that have built the world as I now know it. I have always known a work week is 40 hours, any time over 8 hours a day is Overtime. Even as a salary worker, my work week is measured by that standard. My children attend school, they do not work in a factory — in fact it is illegal for my children to work. This world of labor laws and social safety nets that were designed as Industry moved from Industry 2.0 to where my family history began to exist in the United States during the age of digital controls. Now society sees the need for these social constructs but only after the change of work in Industry. Immigrant labor, machines with electrical power, moving into automation with basic relay logic changed the way of work for the average person. With that change came forms of exploitation that had not been seen in the work life of an average person. Tragedies happened that were attributed to this new use of Labor in Industry, such as the Triangle Shirtwaist Fire. The new technology created benefits that society was able to capitalize on, and the worker that provided the Labor was not able to gain value from those dividends. Codes, standards, and social constructs were built out of tragedies — with those safeties and protections the Middle Class that we know today in the United States rose in lifestyle. I am born of Great Grandpa Piller, and immigrant from Austria working in a coal mine in Pennsylvania, my Grandpa Piller working in Sibley Foundry in South Bend, Indiana as a Mold Maker, my Father an IBEW Electrician to become a Controls Engineer and University Professor.
The period as Industry moved from the 19th to the 20th Century, where United States society identified the issues and created the constructs to protect workers, is the end of a time that also existed in Britain in the early 19th Century that is referred to as Engels’ Pause. These moments in history can be found on Economic Data tables when the rise of production is compared to the Real Average Hourly Earnings. You will know you are at the Pause, it is indicated by a flat line in Hourly Earnings and a positive sloping line in production.
With data from the U.S. Bureau of Economic Analysis, I charted the US Wages and Salaries and Gross Domestic Product (GDP) of the United States from 1929 to 2016. As one would expect, the graph of both increases.
That increase slope from 1929 to 1970 shows a steady growth between both charts. The Wages and Salaries chart begins to rise slower over time than the GDP. From 1970 to 2016 this trend continues and shows signs of the Wage growth leveling out.
As I teach Industrial Controls at the University Level and to Industrial personnel I feel that it is my responsibility to show this trend. Personally, I am excited to see automation take hold to a point where factories no longer require human labor. I am excited to see where I can code a system and people can do leisure activities instead of being slaves to a job. But I also understand the impact of that reality. Being a slave to a job brings forth a paycheck. If we displace the worker, how does the worker pay for their needs and wants? How does this continue to build the American Dream my Great Grandparents came to the US to find? Easy answer — I do not know. And a bit of a spoiled answer — it is not my problem. However, it is my children’s problem. And I am teaching and training the people that will work on the replacement of those workers. So I am looking for the next New Deal.
And that is where we are here in the 21st Century. At a mirrored point from the 20th Century where we can begin to build the plans for that New Deal that moved my Grandparents childhood from the Great Depression into the successful growth of the 1950’s and 1960’s. What could be that new deal? There are many suggestions out there, but each of them hold their own barriers, gains, and losses. But one idea I have heard often is the idea of Universal Income — there is even a contender for the 2020 presidential election pushing for it with a new name called the “Freedom Dividend”. Bill Gates even suggests that we tax the robots. I am not here to give the answer — but I want to make sure there is a conversation. Because we are headed to a place where we have been. The economic indicators are showing the wage flattening and the populace is getting displaced and not retrained. Our manufacturing jobs are not there, and AI is replacing many service sectors also. When I first started out in the world working and doing automation my friend’s Dad said to me, “John — you are building machines that will take jobs.” And even back then I responded, “No, with the work being done all of you will be on the beach drinking beer and enjoying life. I’ll be stuck fixing the robots.” Well, that time is coming soon. So can we find a way to make it utopian rather than dystopian?