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Automation and the Crisis of Work

Technology, like natural selection, has no goal.

When it comes to the impact of automation (robots, AI, etc.) on jobs, there are two schools of thought: one holds that technology has always created more and better jobs than it destroys, and this will continue to be the case. The other holds that the current wave of automation will destroy far more jobs than it creates, but the solution is to tax the robots and use these revenues to distribute the wealth to everyone who no longer has a livelihood.

In either case, we’ll get richer: if technology generates more high-quality jobs, replacing lower-quality jobs lost to automation, we’ll collectively get richer, and if technology destroys jobs but creates immense profits that can be distributed to everyone as Universal Basic Income (UBI), then we’ll get richer via distributing profits to everyone.

But what if neither option is realistic?

What if the jobs that are created in the wake of automation are lower-quality, lower pay and far more insecure? And what if automation leads to much lower profits rather than much higher profits? What if there’s nowhere near enough profits to distribute to everyone as Universal Basic Income? If that’s the case, we’re collectively becoming poorer, even if a small percentage of the population is reaping wealth from automation.

Consider this first-hand account from a reader on Facebook (used with permission):

“With almost 40 years in the pipeline business I have seen detecting and locating leaks in pipelines go from 6-8 men, 2-3 trucks, maybe an airplane and take days. With three pieces of equipment (Laser methane detector and a Optical Gas Imaging camera), $300 drone and a 4 X 4 pickup, one person can cover in a few hours what could take days to weeks to find years ago.

The work I do has displaced at least 6 if not more workers plus the capital cost of the equipment. The total cost of all my equipment is less than $200K and labor cost of less than $2K.

A ‘Smart Pig’ can detect, measure and locate a corrosion indication within mm’s. The fixed cost of the equipment is high but the incremental cost per use is low. Manpower and equipment has gone from 12 workers to 4-5 depending on size. The information found can prevent loss resulting in environmental damage and economic loss to the pipeline owner.

Less people doing more work to find problems. Using technology instead of manpower.”

Between half and two-thirds of this workforce has been obsoleted by these technologies. If there is any competition in the manufacture of the equipment, it’s likely prices will fall as components become commoditized and decline in price.

Workers share of national income, 1994-2020

Workers share of national income, 1994-2020

- Click to enlarge

Sectors of the economy many hope will create more jobs are seeing the same dynamics. A friend recently described the technologies being deployed to increase the yields and reduce labor in organic sustainable farming: drones that monitor the water and nutrient needs of crops with sensors and relay the data to drip-irrigation systems.

As for training students to code/program: many of these tasks are being automated as well.

Even as we wring our hands over the potential for individually-targeted advertising to sway elections, we also have to ask: why should any advertiser pay marketing firms to distribute bulk emails and mailers, buy TV/radio/print adverts, etc. when an essentially automated technology can craft a data-driven micro-targeted pitch to individuals?

My point here is that it’s not just blue-collar jobs that are being obsoleted, but well-paying white-collar jobs are increasingly being automated as well.

The jobs that are being created are low-pay, contingent, insecure service jobs that cannot support a middle-class life or accumulation of capital.

If we look at the gig economy that’s arisen to staff on-demand services (Uber, Lyft, GrubHub, etc.), we find low earnings, no benefits and the costs and risks of auto ownership being offloaded from the corporation to individual owners.

These jobs may be “new” (although they look very similar to “old” jobs such as delivering milk) due to the interface of smartphone technology, they lack the security and compensation needed to afford a middle class lifestyle in most U.S. urban areas. In other words, they are not replacing jobs lost with equivalent jobs.

The idea that profits will pay for Universal Basic Income is simply not realistic. Even we taxed all the Big Tech corporations at a rate of 75% (a rate that’s politically unrealistic), that would yield up $100 billion, one-tenth of UBI’s minimum cost.

As I’ve discussed in my books, there’s another crisis of work that UBI doesn’t solve: the majority of people want and need the purpose, meaning and structure of a job–a positive social role, a way to gain self-respect, an avenue of control of one’s life, a source of dignity and a means of getting ahead.

Technology, like natural selection, has no goal. Technology doesn’t have a teleological drive to employ humans, save the planet or any other goal we might choose. In the current socio-political-economic system, technology is mostly aimed at maximizing profits. The surest way to reduce costs is to replace costly humans with automated tools.

If we want technology to help us create gainful work, we’ll have to set that goal, and create incentives other than maximizing short-term profits. Perhaps one first step might be to broaden our definition of “profit” from the purely financial to one that includes “utility” and “value” for local and global communities. That’s the goal of my work.

Shares of Gross Domestic Income, 1960-2019

Shares of Gross Domestic Income, 1960-2019

- Click to enlarge

 

Full story here
Charles Hugh Smith
At readers' request, I've prepared a biography. I am not confident this is the right length or has the desired information; the whole project veers uncomfortably close to PR. On the other hand, who wants to read a boring bio? I am reminded of the "Peanuts" comic character Lucy, who once issued this terse biographical summary: "A man was born, he lived, he died." All undoubtedly true, but somewhat lacking in narrative.
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