How to address the effects of automation?
Let me tell you the terrible story of how that happened. It was just a regular day, I was minding my own business. In an attempt to educate myself, I started to browse Quora. This is where it went south!
I came across a question (How would you reduce wealth inequality and address the effects of automation?) and I did what any self-absorbed person who doesn’t have a clue of what’s happening would have done: I answered.
It was April 21st, and since then, I can’t stop thinking about it. I should update my answer, but it wouldn't be funny if I didn’t bore you!
Welcome to the future!
April 21st, 2023. United States. The tech survivalists were right: the world as we know it is about to end. Thanks to the advance in deep learning, reinforcement learning and all the other forms of learning, robots are taking over every jobs (manufacturing, accounting, finance etc.). Social turmoil is on the rise. Our institutions are unable to act efficiently. Violence is spreading like an unstoppable virus.
Wait a minute Asimov!
Nice plot, but please, stop your drama! Steve Mnuchin, Treasury Secretary, will not worry about AI taking jobs before 50 or 100 more years. Add that to the billions of jobs Trump will bring back to the US with his super tax reform, and the discussion is over.
Well… Research tends to disagree. I know, shocking! “The RIA estimates that more than 265,000 robots are currently deployed at factories across the country, placing the US third worldwide in terms of robotics deployments behind only China and Japan”. And they are hungry for work: “the World Economic Forum predicted that robotic automation will result in the net loss of more than 5m jobs across 15 developed nations by 2020”. I guess they don’t care about summer vacations!
The middle class is getting crushed
The direct effect is a polarization of the job market. (Very) low cost jobs are “safe”: we can assume that robots would globally stay more expensive. High skilled/paying jobs (programmers, management etc.) are also “safe”: you need technicians to create and look after the machines (at least for now). So who’s left? The middle jobs… the one for which you can “easily” translate well established procedures into software. Some research showed that automation destroyed (way) more middle class jobs than globalization. We saw how the fate of the middle class fed populism.
Remember the old days?
Populists love the good old days. So let’s look at them. In 1850, farmers made up about 64% of the working force. Then came automation in the form of tractors etc. Nowadays, farmers make up less than 2% of the working force. What did we do with all those people that were not needed in the farms anymore and were not ready for industrial jobs yet? Well, we educated them (the high school movement). Surprisingly, secondary schools were free and generally accessible in America, while costly and elitist in Europe. Free education: those are the good old days!
The chain principle
Most innovations are design to “replace” human labor: assembly lines, computers, driverless cars... or how to make more with less.
But… Despite the frenetic rhythm of innovation, the adult population participating in the working force has increased (from 58.5% to 63%). What a paradox! As David Autor puts it, if machines do our work, why aren’t we obsolete and why are there still so many jobs? It has to do with the nature of work.
Work is a complex chain of tasks and a chain is as strong as its weakest link. Improving the most vulnerable links increases the value of the other links. ATM’s are better at handling cash operations than human tellers. So the latter became sales representatives and customer care specialists (Wells Fargo didn’t get the full memo). Technology magnifies the importance of our expertise, judgment and creativity by making it more valuable.
Education, education, education!
This is why education is THE answer. It was the answer before. It is the answer now and it will be the answer tomorrow. We need better education, cheaper education, more accessible education.
Automation creates wealth by doing more with less. This is a fact. The question, and this is where we can screw things up, is how to use that wealth? To make it sustainable, we need to invest in institutions that promote equality, opportunities and education (economic mobility). The American economy has added a lot of jobs since the great recession. Jobs is not the bottleneck. Skills are. Education is the best tool to capture the benefit of our technological prosperity.
The Bill Gates’ solution
I hate taxes. I am actually very allergic to them. But the tax on robots suggested by Bill Gates makes some sense. It does because it takes into account and act on the two key factor of success: 1/ we need time to educate and retrain people. The tax would somewhat slow down the shift toward full automation (by making it more expensive). 2/ we need funding to finance new and ambitious education programs. Because yes, those programs should be free. The tax would raise net funds.
There is one lesson we should always keep in mind: humans adapt (to innovation) and when we learn to live together (with the tools), the world is better off! Life expectancy has increased drastically over the past couple of centuries (to only mention one measure). Now replace “innovation” by “immigration”…
As automation frees our time and enlarge the scope of what is possible, we invent new products and ideas etc. Finance, programming etc. were not important a century ago. And if you can’t imagine what people will do for work in 100 years, it doesn’t mean they wont be working. The world doesn’t rely on your imagination.
Stay tuned!
