Why Automation Job Elimination Worries Are Exaggerated — With Real Examples

Every day we seem to hear new stories about why automation is such a threat to our economy. We hear dire warnings about how all our jobs will be automated and lead to mass unemployment, social problems, etc.

Such stories are sensational and evoke a lot of emotion. It’s a bit unsettling to think that your job might be eliminated in a few years and your skills obsolete. So in today’s media environment, it’s no surprise to see so much coverage of this subject. And then as a result, you have political groups seizing on this possibility to push their respective agendas (think Universal Basic Income as an example, where most article assume significant unemployment as a CERTAINTY).

Part of this is true. Unquestionably, there are many disruptive technologies that are imminently being deployed. And by their very definition, they will disrupt industries and individual jobs. Some jobs will be automated by machines. Others will change in terms of skill requirements, responsibilities, and job description. And others will simply use new technology or processes to achieve the same end result.

Some people will struggle from this. A lot of workers will see periods of unemployment and will need to learn skills necessary to compete in an evolved economy.

But the worries about mass unemployment lack common sense. I wrote about it from a logical and economical perspective in Will Automation Eliminate Our Jobs? In this article, I talk about 7 incorrect assumptions that people are making about this topic. The conclusion is that while individual jobs might get eliminated or altered, the overall economy will re-balance and not see a huge impact in employment levels.

I want to extend this thinking a bit. Rather than approaching this from a broad level, let’s look at individual industries and jobs. And let’s use real examples to accentuate this point. My hope is that people will be less fearful of technology and less prone to make illogical economic forecasts. Let’s do it…

Example 1 — Customer Service Jobs.

People tend to think service jobs are going to be automated. They see devices like Siri and Alexa, chatbots, and other AI that “automates” aspects of the service industry.

But let’s look at modern history. Devices like the IVR (when you call customer service and have automated routing and payment prompts) didn’t reduce customer service. It just made the process more efficient. I have personally worked on such projects. The business case to undertake IVR and other call center automation projects will always assume cost reduction through lower required staff levels.

However, these reductions never end up happening. Even if there are savings in the routing process, those savings get re-invested by the corporation. They expand their product or service offering because they can afford the extra customer capacity. And that results in more customer servicing needs. Headcount ends up increasing.

An IVR is automation just like AI is automation. And yet you don’t see mass losses in call centers. Such jobs have increased rapidly!

Off-shoring is another example. While sending service jobs to overseas locations like India or Philippines isn’t exactly automating it, you’d still expect customer service jobs in the USA to decrease. Did it happen? According to the BLS, customer service representative jobs increased 26% from 2006 to 2016.

It’s not just automation and geographical relocation. FAQs, chat features, callback processes, and other process efficiencies have been deployed in that time. Such improvements are designed to decrease customer service call volume. However, many people ignore them because they want the service that only a real person can provide.

The moral of the story is that technology automation doesn’t translate into job loss. It just changes the nature of the job, the focus of the business, and frees up time/money resources to deploy in improved ways.

This is very customer service centric. However, over 70% of US jobs are service focused. Keep these examples in mind when considering future automation. We never give LESS service. We use technology to improve the experience.

Example 2 — Creative Jobs.

This one actually makes me laugh. There’s an assumption that because AI enables a machine to “learn creativity” that we’re going to see job losses in the creative fields. I have actually heard people say that musicians, artists, and athletes are “at risk” in the job market.

This is nonsense. Consider:

• When you watch a musician, you’re watching a human performance. That includes seeing a live person, seeing them dance, special effects, and the personality behind their art. We even sit and watch classical music concerts. Are people seriously going to watch robots doing these same things? No chance.
• Painting, sculpture, and other visual arts are big industries. People are paying millions for a work by a famous artist. There is history, expression, and meaning behind each piece. Do you think art will have any value (financial or sentimental) when created by Johnny the Robot? No chance again.
• The whole reason we watch sports is to see humans stretch the bounds of our physical and mental capabilities. They are stronger, faster, and more skilled than the average person. And yet they are fallible. In an athletic competition, just being a fraction better is enough to win. We watch to see the intrigue of each competition and the heart that athletes show in triumph or failure. Are we really going to care about watching a robot win a competition because their engineers designed a better machine or computed geometric angles with better precision? No chance.

Back in my past article, I said it was incorrect to assume that just because technology is capable of doing something, it will be demanded. We have to demand it. And nobody wants to see robots create art. We want the emotion and expression that comes from real humans.

Example 3 — Office Workers.

When the PC and internet were booming in the mid-late 1990s, there was speculation about all the office jobs that would be eliminated.

• Data entry and storage
• Record keeping
• All the manual paperwork would be automated
• Processes would be streamlined
• Transactions were automated
• Administrative functions (scheduling, phone routing, etc) would be easier

In reality, those tasks were largely automated. These didn’t require a lot of skill either so would have disproportionately affected lower wage jobs. But as we see today, office jobs are far from scarce. In fact, I’d venture to guess that there are far more than ever before.

Why? Businesses no longer had to dedicate time or money to such manual tasks. They could take the cost efficiencies and invest in new projects, business expansion, reaching global markets, and streamlined revenue generation. And they could re-focus on data analysis, process improvement, customer service, and of course building and supporting these automated systems. These new projects and job activities created far more jobs than the time-wasting ones that were required before it.

For every job hour that PCs and Internet automated, several new tasks were now required. I believe the same thinking occurs with AI. Examples?

• Instead of wasting time lead prospecting, AI can help do it for you. Now you can focus more on working directly with customers and hopefully closing more sales. Websites, email, and social media automated a lot of the sales process already (creating an inbound channel). AI only furthers that trend.
• Instead of doing manual accounting, AI automates basic things like bookkeeping, journal entries, and payments. But it doesn’t eliminate accounting needs. It enables these professionals to re-dedicate that time to finding financial efficiencies and high ROI projects.
• Instead of paying lawyers $500/hour to build and enforce contracts, we’ll have smart contracts that auto-fill based on your needs, have an enforceable digital signature, and automatically execute its various provisions. Doesn’t this incentivize more deals and better deals instead of being deterred by the daunting and expensive legal process?
• Instead of it taking several days and many steps in sending/receiving money to/from customers, business vendors, entities, and countries…blockchain will make that process much more efficient. Re-invest into something better.

There are plenty more examples. The main point is that office jobs are not going to decrease. Companies don’t aspire to shrink in size. They have to constantly grow to appease shareholders. That means more investment and a larger workforce to accompany that work. The technology enables that.

Example 4 — Local Businesses.

This is another funny example. The robot/AI alarmists will have you believe that everything is going to be automated. They say that every local store and restaurant will have a robot serving you and handling the tasks within that business. It completely neglects the realities of how such businesses operate.

Let’s use a few examples…

A restaurant or bar could hypothetically be automated and operate with minimal staff. You can order on an IPad equipped with a menu application. Then that routes to a robotic cook that immediately makes the meal. Finally, a robot moves around the store and delivers the finished meal to your table. When finished, you swipe your card on the IPad and leave.

Honestly, this capability has existed for a while. AI isn’t what makes this a reality. And the robotic capability exists today. Yet we really only see it at McDonald’s or in wholesale food production. Why? Many reasons…

• Small restaurants can’t make these large capital investments. It takes a lot of up-front money to build the systems, buy the machinery, and keep it functional. A small, local business isn’t getting killed by minimum wage labor costs. They are successful (or not) based on whether their restaurant is filled with customers. Costs are important but not make or break. There’s no way they are making that investment. They will spend their time cooking great food, building a fun atmosphere, marketing to customers, and delivering great service. That’s where they get their profits from.
• What customer would want to dine in an automated experience? Technologists that think customers would find this acceptable must have never dined out. People ask for refills and extra napkins. There are countless questions about menu items and recommendations. They ask for ingredients to be added or subtracted based on allergies or preference. Meats and other items get cooked based on preference. They send items back to the kitchen. That’s how an average person dines. Technology will change that culture? If you don’t believe how much customers value atmosphere and service, just look at Yelp or TripAdvisor reviews for proof.
• Even if you’re still not convinced, can you imagine the typical restaurant owner operating such technology? What happens if something breaks? What if you operate a bar and the delivery robot walks into people? What if the cooking doesn’t taste as good? What if the chef wants to make specials that aren’t yet programmed? How about drinks (a restaurant’s biggest margin source)? Technology arguably makes a small restaurant operation LESS efficient.

Let’s try another common local business. Retail stores. According to technologists, we’re going to wipe them out with Amazon type delivery services or brick/mortar stores that operate automatically. I’d challenge you to talk to local retailers…

• For smaller boutique stores, most of their purchases come from good salespeople. They help customers with what looks good, matching clothes or accessories, fitting, and other service friendly actions. A robot can’t replicate this.
• The same reasoning occurs with the cost. Boutique owners will often work most hours themselves and might make a few more minimum wage hires as needed. They aren’t buying expensive equipment to automate this.
• Who’s going to keep the store organized and clean? Who is going to prevent theft? Who is going to incentivize customers with sales and events? How about handling returns? Not a robot.

What else exists locally?

Professional service offices (doctors, lawyers, engineers, etc). Local people will trust a machine over their local experts? Right.

Cleaners. They usually have 1–2 people working there. They are going to replace themselves?

Hairdressers. I’d love to see the person that trusts a machine with a blade against their head.

Real estate agents. I can’t wait to listen to Siri’s voice telling me about the home’s features, local school system, neighbors, etc.

Here’s the statistic you should know. In the USA, about half of all jobs come from small business. These businesses aren’t automating their local functions with multi-million dollar robots or high functioning AI. None of the examples make sense to their business’ economics, capability, or operation. And local customers aren’t going to stand for it.

That’s the USA. In most countries, small businesses comprise the vast majority of employment. Automation has too many non-technical constraints to cause mass job loss at the small business level.

Example 5 — Large Consumer Expenditures.

Another common story I hear is how we’re going to automate construction with 3-D printing and transportation with self-driving cars. While these are impressive technologies and will certainly have a large impact on these industries, it’s not going to have a massive impact on employment. Again, it comes down to basic common sense.

Let’s start with homes. Take a look at this article and this video. Both of these are impressive and will undoubtedly have a huge impact on construction. But those that think we’re going to suddenly replace all construction with these automated building methods lack knowledge about how this process works.

This is the single biggest purchase of a person’s life. Ask any builder about that process. New home construction comes with preferences on every minor detail. Brick type, exterior color, garages, door style, window material, tiling, interior paint, counter tops, wood style, and the list goes on and on. Homeowners work with their builders to make hundreds of decisions on every minor detail. They want to see samples and will often change their minds.

Why do they do this? Because they have passion about the place they will spend most of their time.

It’s not very different for business construction. You will specify the same preferences but will also make decisions on functionality. You have requirements on spacing, tech infrastructure, lighting, facilities, parking, elevators, common spaces, and every other aspect of a business space.

From a construction perspective, this may automate certain aspects of the housing structure. But it doesn’t touch things like plumbing, electric, interior features, interior design, landscaping, and outdoor structures. Not to mention anyone will want certain customization like carpeting, home security, painting, and more.

To summarize, you can never eliminate all the trade work that goes into new construction. But even if you made it more efficient with a 3-D printed exterior, automated plumbing and electric system, Internet of Things gadgets, etc…

• Who is installing these things? Who is managing all the systems, add-ons, and custom features?
• Who do you call when there is a problem?
• Who is renovating all the older homes with new features?

If anything, I foresee more work in this field.

Let’s move on to cars/transportation. I have heard predictions saying nobody will buy a car anymore. We’ll all rely on automated Ubers to shuttle people/goods wherever is specified. And for this reason, we’ll see big job cuts in the transportation field. But this ignores every societal aspects of how we use transportation.

• You have people that are very passionate about automobiles. They enjoy buying cars, understanding how it works, and self-maintaining the vehicle. Some even collect and/or trade cars. Are they just going to stop doing something they are passionate about?
• Many people like to drive. It’s nice to feel in control of your destination and drive in your vehicle. These people are going to eliminate their preference?
• Just like airplanes and trains that are largely automated, we still have multiple pilots/drivers for emergencies. And we have an entire service team to attend to customers. Won’t automobiles and trucks have a similar setup?
• Some assume delivery will be automated. But how does the delivery go from transportation vehicle to inside the person’s home? You have to ring the doorbell, put the delivery in a mailbox, or meet the person. Not all buildings (especially in urban areas) are easy to deal with. You have to park, pass through security, and find their unit. And you have security concerns to ensure items aren’t intercepted by a third party. AI/robots are going to do all these things?

Just like homes and construction, technology will give us interesting features and changes within the transportation sector. But I just don’t see the mass job loss people are predicting. It doesn’t make sense.

Concluding

Every day, I hear predictions about automation being this scary proposition for the job world. But it doesn’t make sense. In my other article, I talked about why from a logical standpoint. The economy is resilient and always has been. We have transitioned every time before and history is full of technological advance. And we see thousands of jobs lost and new ones born each day. That’s how an economy works.

Automation will definitely change a lot of jobs. It will eliminate many. But new jobs will be born from that very same technology. People should pay attention, as your individual job might be affected. They should keep track of which skills are most likely to be needed in a future world. But these predictions of 40% current jobs being eliminated or 50% unemployment are scare tactics, exaggeration, political propaganda, or shoddy analysis. It’s highly unlikely to come close to these numbers! My bet is on very little macro impact.

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