All In the Neighborhood | October 2, 2016 at 3:25 pm

Automated Inequality

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Humans have been here before—at least three times before, in fact. At first, it was steam and water power; then came electricity and mass production; and then IT and computerization. Each time, Joseph Schumpeter’s “gale of creative destruction” blustered as rapid advances in technology destroyed some jobs, paved the way for new lines of work, and ultimately provided enhanced productivity and lifestyles for the majority. Researchers predict that over the next decade or so, emerging technological breakthroughs will once again fundamentally alter jobs and manufacturing processes around the world—but this time, the consequences could be drastically different. 

There is little debate that robots are coming for our jobs. Two Oxford University researchers estimate that 47 percent of jobs in the current U.S. economy are vulnerable to automation within the next two decades, while a recent Pew Center survey revealed a general consensus among almost 2,000 leading experts that by 2025, robots will have taken over many of the jobs currently performed by humans. What is less clear, however, is whether or not the future will mirror the past and “human ingenuity will create new jobs, industries, and ways to make a living.”

Considered in abstract, a fully automated workforce might seem like an attractive prospect. In an idealistic future, machines would emancipate humans from menial, banal, or dangerous jobs, and free us up to pursue genuinely meaningful and rewarding activities. However, there is little indication that reality will reflect this best-case scenario. Many economists envision that the most profound challenge societies will face in transitioning to automated workforces is equitable distribution of the fruits of increased productivity. If vast swathes of the human population are rendered effectively unemployable, it is imperative that a mechanism is in place to ensure that everyone will stand to benefit from automation—many believe that a universal basic income might be the answer.

A Fourth Industrial Revolution

There are substantive differences between this impending technological explosion—what some have labeled a “Fourth Industrial Revolution”—and the ones that preceded it. Martin Ford, the author of two best-selling books on automation and technological unemployment, explained to the HPR that machines are now “encroaching on the fundamental human capability that really sets us apart as a species”—intelligent thought. While previous developments in automation mainly threatened blue-collar workers on shop floors and in factories, high-wage and high-skill jobs are now also at risk. Research carried out by McKinsey & Company suggests that hourly rate of compensation is not necessarily a strong predictor of automatability; in fact, a significant percentage of activities performed by even the economy’s highest earners (financial planners, physicians, and senior executives, to name a few) are vulnerable to automation. Ford also noted that in industrial revolutions past, people transitioned to jobs that were still fundamentally routine and predictable—for example, jobs moved “from farm to factory to office or retail store,” but still consisted of repetitious tasks. This time, however, he predicts that there won’t be a “new sector of the economy that will produce millions of routine jobs”; instead, all of those jobs will “evaporate in the face of technology.”

Nicolas Miailhe, a research fellow and co-founder of The Future Society at Harvard’s Kennedy School of Government, cites a confluence of three factors to draw another important distinction. In an interview with the HPR, he pointed to the “unprecedented velocity, scale, and magnitude” of the changes which face the global job market. This time around, he contends, the exponential rate of breakthroughs in automation and artificial intelligence will not afford displaced workers the time to adapt their skills; machines will invade every sector of the economy and job market; and anticipated technological developments may completely transform industries.

Humans Need Not Apply 

The hyper-efficiency of machines, and their potential to render much of the human workforce obsolete, is fast becoming evident. Google’s fleet of self-driving cars, for example, has collectively logged more than 1.5 million autonomous miles on the road. The enthusiasm for self-driving cars is easy to understand: unlike humans, they are equipped with 360-degree vision, infinite patience, and unwavering attention to the road. Perhaps most importantly, Google’s self-driving cars are far safer than those driven by humans, and could radically offset the nearly 33,000 traffic deaths that occur in the United States alone every year. In the first six years of the project, the cars were only involved in 11 minor crashes—and according to Chris Urmson, the director of the program, not once was the self-driving car the cause of the accident.

Given this stellar safety record, it is only a matter of when, not if, self-driving vehicle technology will disrupt the transportation industry and render its occupations obsolete. Truck drivers alone are responsible for 8.7 million jobs in the U.S. economy, according to estimates by the American Trucking Association, and truck driving is the most common job in 29 of the 50 U.S. states. But the transportation industry is just one of many under threat. Earlier this year, Moshe Vardi, a Guggenheim fellow and professor at Rice University, said that the time when machines will be able to outperform humans at almost any task is fast approaching. He then asked: “If machines are capable of doing almost any work humans can do, what will humans do?”

A World Without Work? 

In 1930, the economist John Maynard Keynes predicted optimistically that people would work only 15 hours a week by 2030, thanks to the magnified role of machines in the workforce. Miailhe, however, is not convinced by Keynes’ utopian vision of a world without work. While the notion of increased leisure time is certainly appealing, he argues that many people derive their internal sense of self worth from working hard and being successful. “Work is not only about income, but it’s also a socialization process by means of which you find a role in society. It builds identity and ensures social insertion for millions of people.” Given the value placed on employment, there is no guarantee that people will suddenly stop working when robots take over our jobs.

Regardless, it is clear that the definition of what constitutes meaningful work will need to evolve. For this to occur, it will likely be necessary to decouple society’s traditional association of jobs and income. Already, there are countless types of work which go unpaid and are not deemed legitimate forms of employment but in many cases are as valuable to society as paid occupations. In-home childcare and contributing to sites such as Wikipedia are only two examples. But as paid work becomes more and more difficult to come by, it seems logical that society will have to start regarding the homemaker and the daycare worker equally, and somehow enable people to perform valuable forms of unpaid work.

Dangers of Inequality

From an economic perspective, it will be necessary to share the benefits of automation equitably enough to drive growth. After all, machines don’t consume like humans do—a burger-flipping bot cannot enjoy a Big Mac, nor would a droid on the factory floor ever desire to purchase the iPhone that it assembles. In order to maintain demand and consumption, humans will have to retain the discretionary income and purchasing power to make economic choices. However, as Erik Brynjolfsson and Andrew McAfee of the MIT Sloan School of Management pointed out to the Harvard Business Review, “there’s no economic law ensuring that as technological progress makes the pie bigger, it benefits everyone equally.”

In fact, a report released earlier this year by the Swiss bank UBS warned that it is the richest who stand to benefit most from the Fourth Industrial Revolution. The report predicts that not only will inequality increase between developed and developing countries, but it will also increase within countries themselves as the rise of automation squeezes out unskilled and semiskilled workers. Today, the income and wealth disparity in the United States between the very rich and everybody else is already larger than at any point since the Great Depression, and as technological developments threaten to amplify this inequality, the onus will be on policymakers to respond.

A Basic Income For All

Scott Santens, a freelance writer from New Orleans and a leader in the universal basic income movement, believes that simply handing consumers money might be the answer. Santens has dedicated his life to advocating for the idea that all citizens or legal residents of a country, regardless of means or employment status, should receive an unconditional stipend (a commonly suggested starting point is $1,000 per month) from the government.

Though it is not part of any major political party platform today, the concept of a guaranteed income has historically attracted support from both ends of the political spectrum. Thinkers as diverse as Martin Luther King, Jr., Richard Nixon, and Charles Murray have embraced the idea. Those on the left see a basic income as a means to eliminate poverty, empower workers, and ensure a minimum standard of living for all people; meanwhile, those on the right view it as a more efficient alternative to the bureaucracy of a welfare state.

A universal basic income might also help to accelerate innovation. Santens argues that as long as people require jobs to pay for their basic needs, the automation of labor will always engender pushback from nervous humans. Earlier this year, Johnson & Johnson abandoned production of its Sedasys machine, an automated sedation system that performed the role of anesthesiologists at a fraction of the cost, demonstrating the challenges that companies face when introducing products that threaten human jobs. Unsurprisingly, the corporation faced fervent opposition from the American Society of Anesthesiologists, which lobbied against the product years before it even hit the market. The implementation of a basic income would be a big step towards creating a society where innovation and automation is embraced, instead of one where even inefficient jobs are preserved in the face of more optimal solutions.

Conversations about basic income are already taking place all over the world, from Canada to the Netherlands, and New Zealand to Bulgaria. Santens spoke to the HPR from Switzerland, on the eve of a historic referendum that the country held on a universal basic income. Although the proposal was roundly rejected the next day, illustrating that it may not yet be in the realm of political feasibility for most industrialized countries, Santens believes that “ongoing fears of technology and changes in the labor market” will only serve to increase support for the basic income movement.

And a monthly cash transfer is not the only option. A proposal like free-market economist Milton Friedman’s negative income tax—a system in which people earning below a certain threshold would receive supplemental pay from the government, instead of paying taxes—could be a more politically plausible way to achieve the goal of a basic income guarantee.

But whatever mechanism for wealth distribution ultimately ends up on the table, Brynjolfsson and McAfee ultimately conclude that whether the coming wave of technological breakthroughs creates positive or negative change is up to us.

“The outcome—shared prosperity or increasing inequality—will be determined not by technologies but by the choices we make as individuals, organizations, and societies. If we fumble that future—if we build economies and societies that exclude many people from the cycle of prosperity—shame on us.”

Image Source: Wikipedia/Mixabest

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