A New Wrinkle And Danger In How Automation Will Obsolete Jobs

Automation and the transformation of work are critical topics today and a potential upheaval (not in a good sense) taken to income inequality.

There have been many takes on the topic. Some people are sure that, as has happened before in the Industrial Revolution and at other points, such as the commercial use of electricity, the development of integrated electronics, and the broad adoption of computers, some jobs will disappear, only to be replaced by others.

I’ve found the other side more persuasive: that things are different now than they have been in the past and assumptions of new jobs for virtually everyone are more wishful thinking than a realistic appraisal.

There are a few reasons why this seems more likely. One is that rather than the introduction of a truly new technology, automation and artificial intelligence make use of technologies that have already existed, albeit put together in somewhat new ways. There is nothing new about automation. And, frankly, there is nothing new about the concept of AI, which was a topic of earnest study in the 1970s and on because of the increasing power and falling prices of computers.

Then there is the trend of leverage. Although companies are on the hunt for millions of programmers, software architects, data experts, people with advanced statistical skills for analysis, and other such skills, that is a tiny fraction of all working people. In context, the job expansion will happen in these areas and still the number who gain jobs will be much smaller than those who lose them. It’s a matter of common sense. If companies didn’t think they could undertake significant reductions in their workforces, do you really think they would spend all this money to automate?

It reminds me of some middle to upper manager in a company I once interviews. There was some technology that could replace many people. I asked if the idea were to free people up for more meaningful work. He took a breath over the phone, as if tired of the usual answer people in corporations made, and said something to the effect of, “No, that’s what we generally say, but really, we’re looking to cut jobs.” Period.

A rare moment of honesty from a prowler in the hallways of corporate power.

The Organisation for Economic Co-operation and Development (OECD) has a relatively new study that looks at the future of work and, as part, how many jobs its member developed countries are likely to lose. Below is a graph built from the data that was available for download.

There are some interesting estimates by the OECD along with some of my observations in parentheses:

·        Between 2005 and 2016, 40% of new jobs were created in the digital sector. (I think they mean new job categories, not replacement workers.)

·        About 60% of high-skilled workers get training while only 20% of low-skilled ones do. (No telling what sort of training is meant, but one of the problems with open trade agreements the U.S. has entered into is that people who lost jobs didn’t get sufficient training and attention to help them move to a new occupation.)

·        Only about 3% of people are involved with platform (that is, gig-economy) work.

·        Across all the OECD member countries, 14% are at high risk to be displaced and 32% could be radically transformed. (These numbers seem low given the growing ability AI systems and robotics have to replace not just workers in manual positions but those coming from the professional occupations as well. They are also considerably lower than many other estimates that have been done and “transformation” can become as disruptive as obvious displacement.)

But in looking at the study, I realized two additional problem is the global nature of work and employment. As automation removes jobs, without equivalent work opening up, the world will see massive increases of inequality that will turn social orders upside down.

Second, because of the global nature of work, there are going to be rebounding effects. The more people displaced, the more people desperate for work and willing to take less and then less and less if it’s perceived as a chance to live. More low-end jobs will shift from one country to another and back again. There won’t be localized over supply of workers. It will be global in nature, exacerbating the implications. Wages will drop as a large percentage of the population will grasp at any opportunity.

The logical end of the efficiency worship that has been growing over the centuries is the eradication of as much work as possible, even as population grows. Because it will happen on a global level and the implications are beyond what anyone can imagine.