Money and time, a marriage of convenience
We are flimsy beings of feelings who are driven by a purpose in our lives. Some are in pursuit of profit; some are in pursuit of science and most are in pursuit of simple sunshine. But underpinning all of this is the need to have bread and butter at the end of the day on our plate. No matter how much we work to advance the field of science, or explore the world around us, at the end of the day, we will need a roof over our head and some food on our plate. And that cost money! Unfortunately, nothing in the world is free. And no matter how much we search up our sleeve, there is nothing of value to be found.
The only measure of value we have is time. And so, we trade some of that to earn some money, which helps us to buy daily essentials or maybe even a yearly holiday! During dreadful times of economic downturn, those excess times that we want to trade for money, looks ever bleak, as jobs dries up faster than a pocket of water under a scorching sun.
Now, it’s worthwhile to mention, throughout history, every economic downturn eventually burst back to life by carefully cooking the economy with monetary and fiscal policies. An economy that is completely lacking confidence gradually finds the leg of Usain Bolt and sprint itself to the finish line with more economic activity. And more economic activity means more jobs! Now,
there is a difference between economic unemployment and technological unemployment, it is the latter we are here to address. It brings a permanent unemployment in a specific job sector which is now lost to automation.
Enters the age of robotic revolution
Now what if those jobs are no longer there, as they are permanently taken over by robotics and artificial intelligence (AI). According to Alibaba, “robots are great because they don’t smoke on the job.” They never need a day-off, they don’t get brain fog and they certainly don’t need a maternity leave! Take my money, says mighty tycoons and serial billionaires.
Efficiency always demands higher productivity and profit
The elusive nature of efficiency dictates creating a product with the least resources while ensuring product value stays the same.
Finding peachy profit is the core ideal of capitalism. With that we are seeing waves of innovations in pursuit of profit at the perils of people, from massive warehouses ran by hundreds of mini robots to grocery chains with self-checkout counters, or in the case of Amazon, why not throw the entire check-out counters out the window and introduce a walk-out shopping experience! Not a single staff to be seen anywhere. They are calling it “Just Walk Out”.
Now, it is time we talk about the milkman
Automation is a tool that completes tasks with mechanized process that used to require a human input at a certain stage of production. Automation certainly has its positive effects, it creates new jobs in the technology sector, requires new skills to operate the machines thus adding new set of jobs in the factory where these robots are to replace humans. Basically, every robot that takes away human jobs also adds a set of jobs to the market. The net effect according to Sara Brown’s research is 3.3 workers job lost per robot. Advanced robotics in the heavy manufacturing sector has seen highest rate of robotic process being added to their plants to increase efficiency. A similar study conducted in France by Daron and his colleagues found “a significant decline in labor shares” among 598 firms that adopted robots.
And it is that very reason, the tens of thousands of milkman job from the 50’s in USA, completely disappeared today. It is the pursuit of profit that has written off an entire profession into a chapter of history, even the dairy industry today is highly mechanized and automated. Perhaps similar such fate awaits for many professions over the next few decades. Carl and Michale noted in their research paper, routine manufacturing jobs have always been targeted by automation efficiency, jobs that are very routine in nature with a specific set of processes and that is why car, refrigerator and many home appliance goods have resorted to automation, which eventually caused a low rate of employment in many economies. To sum it up in short, these sectors are at highest risk:
- Low skills jobs are at very high risk of being adopted by automation like data entry, call centers etc.
- Jobs that are very routine with specific set of tasks (for example McDonald’s food preparation, or staffs operating grocery check-out counters etc.)
- Future industries that are at risk comes from machine learning sectors that’s propelling driverless cars, even your favorite locksmith is at risk to lose his profession with the advent of 3D printers and google nest solutions. Just like cash, the future doors are keyless, it's cheap fingerprint solutions!
A Mckinsey research conducted in 2017 found 51% of total US jobs are highly susceptible to automation. The below exhibit shows which sectors are at most risk to automation. On a global level this amounts to 1.1 billion employees that are currently in employment or $15.8 trillion in wages.
SOURCE: US Bureau of Labor Statistics; McKinsey Global Institute analysis
Now, can you robot proof yourself?
We will try to explore the jobs of the future that will be in top demands. Now this is a daunting prospect with a pretty dire scenario no matter which you cut it. It’s like a Russian roulette with 3 loaded bullets and you are hoping when your turn comes, it fires a blank instead of a bullet. The job market is already hyper competitive and
even optimistically with machines taking over 25% of future human jobs, this stares at us like the end of times. The population is growing and so
what will happen to the millions that are being added to the workforce every year?
Apparently future-proofing is little to do with job selection and more about acquiring new skills according to Joseph Aoun. He states on his publication ‘Robot-Proof: Higher Education in the Age of Artificial Intelligence.’ A dramatic transformation in our education is required, which he calls “humanics”.
Technical ability: Machine will eventually walk into the roles that were once done by people. Many employees will eventually perish in this terminal career with dying professions. People who are grounded in information technology and engineering disciplines will be better positioned in this new place.
Data discipline: We do live in an information economy, where every decision is driven by data. So, people who are better equipped to handle data, designing data collection or interpretation will be highly coveted in this new economy.
Human discipline: The machines are still monumentally poor at demonstrating emotional attributes. It doesn’t understand cultural sensitivity, creative articulation, applying decision that are innately gut-driven using complex variables. Basically, Aoun emphasizes on learning using experience and a less focus on textbooks.
So, where to from here, do you dare to ask?
Industrial revolution gave us many things, jobs, affordable goods and a pretty terminally ill planet as it appears with all the greenhouse gas we pumped over the last century in the pursuit of expanding the mighty GDP’s. But with rise of robotic automation, machine learning and AI spreading deep into the very fabric of our society, ask yourself if we are ready to realize the ramifications over a long term?
We humans are very myopic in nature, this is as true as the sun that shines our day, it is not in our elements to see something a bit far into the future.
We only take lessons really well if they sit comfortably in hindsight, anything less, we just simply can’t be too concerned for it, we’ll take care of it when it comes to us.
No matter which way you look at it,
there will be career casualties, to the tunes of hundreds of millions across the globe over the next 50 years. It will be gradual and certainly not overnight, and the seething unrest is certain to follow on a pro rata basis. Unless the global powers intervene with measures in place to increase the safety net for this new vulnerable population.
The tiny dot that comes back to complete the circle
In the pursuit of profit, highest efficiency, perhaps businesses and billionaires are failing to see the reckoning that awaits in the future. The money they make comes from people like you and me. And if we are to lose our job to AI and robots, suddenly we have to put our hands out to government support.
And that’s a sizeable population who no longer have disposable income to spend on non-essential goods like clothes and electronics. And also, this big chunk of workers suddenly adds nothing to the tax net! So that also reduces government’s revenue, as you can see,
the cycle comes back pretty viciously back to the business too, less people with disposable income means, less revenue for business and billionaires, which in turn means lesser profit for them. Ouch that hurts, they say.
So, all this pursuit of profit, richer investors and bigger billionaires where does it lead to?
A future where billionaires will lose their zeroes faster than a cat running for dear life out of a shower.
The new working class: Let’s tax the bots to bring some semblance of balance
The advent of automation stemming from robotics, AI and machine learning undeniably magnifies productivity by many folds,
it’s supposed to lower costs for goods, right? But remember, what we said earlier, capitalism and gold coins go hand in hand, minting bigger gold coins for business, the better. Thus,
those lowered cost of production coming from automation doesn’t get passed onto customers, they slide straight into the pocket of shareholders with bigger profit or in the case of Apple, in their retained earnings with a $200 billion cash balance.
But it does beg the dreary question to be asked, what will happen to 25% - 40% of the future global workforce, who will eventually be made redundant by robots, staring at a permanent state of joblessness.
Do we charge companies an automation or robotic tax perhaps? Because this vulnerable population will need the protection of social security as warranted by a nation’s enacted rule, the burden to support this unemployed population will fall back square on the shoulder of governments across the globe. So, we will keep getting free government handouts in perpetuity at the expense of the new working class, the rich robots!
The final thought, that dreadful thought
AI and automation has advantages but it brings with it a Pandora’s box that will dare the most darling think-tanks to say otherwise. The rise of automation brings socio-economic risks on a scale, the scope of which is beyond our current collective cognition.
Perhaps, as the old adage goes, the time will tell when the time is up. And the next wave of washout will take place across a swathe of industries which will translate to a permanent rise of unemployment on a scale too big to fathom. Meanwhile, let’s just do what we do best, enjoy Netflix and Nachos and our 55 year old unemployed self can worry about it later.