Labor Markets in the Age of Automation
The lack of job growth is a hotly debated topic. Many uninformed and uneducated (or perhaps just overly biased) individuals think that globalization (i.e. jobs going overseas) is the root cause. The real reason is a combination of an ageing workforce (i.e. retirees) and technological innovation. As this article points out, 400,000 jobs were lost per year from 1990-2007 due to automation. This number is likely higher since the financial crisis as the crash allowed firm’s to fire employees and invest in automation to increase margins and improve efficiencies.
While It is unlikely that all jobs will be automated, low and middle skill jobs will be automated. This will likely cause more populist (and eventually socialist) movements as individuals will feel as if the wealthy elites are unfairly treating them and the government should step in to control them. This also means that highly educated individuals who can out think computers will keep their jobs. Again, this will cause greater inequality as it will be perceived the highly educated individuals are treated more fairly and those without the opportunity (i.e. socioeconomic status) for that same education will want the government to do something about it.
Despite the potential issues, technological change should be embraced. As a society, automating every low skill job opens up the door for educational institutions to focus on teaching and training students for higher skilled positions. This will take a coordinated effort among educational institutions, but it is needed; particularly in the U.S. where the education system is abysmal. The article adds that there will need to be “social safety nets such as wage insurance, lifetime retraining loans and portable health and pension benefits.” While these policies are likely to ruffle feathers, the undeniable fact is that automation is only going to grow faster from here. Taking steps to end automation would be disastrous to the economy and our way of life.
I will leave you with my futuristic vision of society: I can clearly picture a society where nobody works, ever. One that is completely automated. This would be the Utopian society our ancestors dreamed of as each generation strives to leave a legacy for their children. In other words, they try to leave the next generation with a better world than they had. Over time “a better world” will be a more automated and eventually completely automated globe. While I can see that world, I am unable to envision the economic and social aspects. For instance, is there money in this world? If there is, who gives money out? Why would you need money when robots do everything, including repairing themselves? Do governments provide health insurance? Pensions? Education? Is there corruption? Are there wars? If one country is automated, sitting by the pool sipping their favorite drink, another country may want to capture that lifestyle.