Robots Are Catching Up to Humans in the Jobs Race
bloomberg.com
bloomberg.com
* Properly takes into account jobs created by technology as well as destroyed.
* Properly takes into account jobs destroyed by austerity (e.g. government budget cuts).
* Doesn't conflate outsourcing with automation - e.g. statistically pretending that because a job no longer exists in the US, that it doesn't exist at all or (worse), as the ball state university study did, literally (and probably deliberately) mixing cost savings from automation and cost savings from outsourcing.
Instead all we get is the steady drumbeat of that old investor pipe dream - the idea that employees are an unnecessary expense that will soon be dispensed with as soon as we find a deep learning model thats sophisticated enough and studies like the ball state U one that argue that the investor pipedream is coming true at the same time as (weirdly) showing their political affiliations by arguing for lower corporation taxes.
At the same time the investor automation hysteria has been good for my wages, so... maybe I should just shut up.
It seems fairly obvious that any new automated technology removes more jobs than it creates. A team of 20 engineers designs and maintains self service checkouts, they're fabbed by maybe 100 more, and then thousands of grocery workers have their shifts cut.
Here's the part which makes me feel a little guilty:
The self service machines are priced according to what the customer is willing to pay, so as to be competitive with the labor they replace, so in effect the money that used to be going to those thousands of grocery employees end up being funneled to the handful who do the automating.
The economy becomes more and more winner-take-all, the gini coefficient rises a little bit more, and like you said we all enjoy our wage increases.
The clearest real world check for this theory should be the unemployment rate.
If you're right, it should be steadily rising as more and more jobs are automated away.
Edit: here's a 2016 article showing an instance of unemployment rate going down (which looks good) because labor force participation rate dropped (which is not good): https://northcooknews.com/stories/511017085-illinois-workers...
> While the unemployment rate dropped to 5.5 percent, it is still higher than the national average of 4.9 percent. In addition, the decrease is mainly due to unemployed workers dropping out of the labor force. The number of people on and off state unemployment who are looking for work determines the unemployment rate. When workers stop looking, they are no longer counted, which leads to an apparent decline in unemployment.
This won't stay that way.
Since the industrial revolution ~250 years ago, human workers have constantly been replaced by machines. All this time people have been sure it would result in unemployment, and all this time they've been wrong.
A worker today is about 30x as productive as one 250 years ago, because of this technological development.
Now, of course, it could be different this time. The past doesn't dictate the future etc. But at a minimum I'd want to hear why from someone who understands the history.
It's obvious in the naive way that it's obvious that breaking windows creates jobs. It's a fallacy from over-simplification.
Automation results in labor savings that can then go into providing more of those services that cannot be automated.
Financially this manifests as demand for sought after human-provided services increasing when consumers see cost-savings on services that are automated.
As an example, jobless auto workers didn't become car dealers in LA: by the numbers they seem to have dropped out of the labor force [1], hopped onto disability [2], and/or died from drug overdoses [3].
[1] https://www.brookings.edu/wp-content/uploads/2017/05/ccf_201... [2] https://apps.npr.org/unfit-for-work/ [3] https://www.prb.org/people-and-places-hardest-hit-by-the-dru...
Will our economy evolve to its next phase? Yes. Will many people suffer along the way? Yes.
Amazon's automated deployment of web servers eliminated jobs in server hosting companies that set up dedicated servers for people but generated massively more opportunities by making it much cheaper, in time and money, for people at large to deploy their own server.
The proliferation of web based businesses in turn expands new classes of occupations that provide people with more niche services that enhance their quality of life.
Yes, generally this is the case. I'm just pointing out that historically, not everyone has won equally, and some have lost.
This argument seems to suggest that if, hypothetically speaking, 65% of the population had jobs that were automated away such that only 1% of the population were needed to do that work, that 64% of the population subsequently would become unemployed.
Given that that example is actually not hypothetical and is very, very real (agriculture), why do you think we never struggled with 64% unemployment?
As for what people ended up doing, new industries opened up, but I wouldn't say they were created by the specific new technology per se... maybe this is just semantics but if automatic tractors frees people up to be hired for instagram video production, can one say that automatic tractors "created" the instagram video market?
Are you saying that automation doesn't necessarily cause joblessness but that it did cause riots?
The industrial revolution was a pretty nasty struggle for sure, but I'd argue that was more down to the enclosure movement - people being kicked off their land - than machines.
>As for what people ended up doing, new industries opened up
And your argument hinged upon the notion that this process has now somehow... stopped... why so?
>maybe this is just semantics but if automatic tractors frees people up to be hired for instagram video production, can one say that automatic tractors "created" the instagram video market?
A lot more than just instagram video market was created after the automation of farming. Frankly, I see the process of market creation being threatened more by wealth inequality than by automation.
Apologies if I was unclear, I did not mean to imply that opportunities would stop coming up, I only meant to draw attention to the fact that within the industry there would be fewer jobs.
(Ultimately this is a very good thing, we can't get much done if 9/10 people are dedicated to farming. In 30 years I'm sure we'll look back and say the same about manufacturing.)
But this is why it's important:
Economic theory says that workers are all fungible and will re-skill into these new jobs, while data show that the new jobs are taken by other people in other places: the old workers seem to drop out of the workforce [1], get on disability [2], and/or die from opiate overdoses [3].
[1] https://www.brookings.edu/wp-content/uploads/2017/05/ccf_201...
[2] https://apps.npr.org/unfit-for-work/
[3] https://www.prb.org/people-and-places-hardest-hit-by-the-dru...
I do agree that the inequality is a big issue and it's doubly edged: less consumer spending power means the market doesn't bother serving those without wealth, and automation itself tends to concentrate wealth into few large players.
Widget A has $10 labor costs and $10 material costs. Widget B has $2 robot costs (=robot engineers labor) and $10 material costs.
My budget is $200. When I buy 10 Widget B I will have $80 remaining that I can spend on something else which will pay someone else's salary and therefore create at least as many jobs as were destroyed by the robot.
Will you pay someone else's salary or will you issue a stock buyback?
So far it seems like the later is happening, and as a result wealth accrues at the very top percentiles.
Now, only $80 are left, and capable robots also compete for that. So maybe you spend only $40 on labor.
So now you support only 40% percent of jobs. And that's without considering second order effects.
I rather doubt that. These are computers in big boxes; if your margin is too high, someone else will do it cheaper, possibly the customer themselves. (unless there's a patent?). Now, the sales are certainly more likely to come in when your price compares favorably with labor.
But I guess that's because there's not competition yet.
This together with simple installation(since newer robots aren't risky to humans and don't require a cage), and fast programming leaves relatively little barriers for adoption of robots.
So it would be interesting to see what will happen.
You worried about brexit?
Barber said, nope hair still grows whether we're in Europe or not.
OK, you worried about a deep recession and mass unemployment?
Barber said, nope hair still grows and needs cutting especially if people are interviewing more.
Ok, ok, so what about Automation?
Barber said...would you trust a robot to get this close to your ears with a razor sharp blade?
Honesly, true story which might explain why 3 new hairdressers have opened up in my high street in the last year. Also as someone who works in software and has to deal with 'bugs' his last point made me really think!
The price of homes is pushed up by everyone except those who want to buy their first one: Banks, Insurance companies, incumbent owners, construction companies, land owners, real estate agents, governments.
Everyone wants higher home prices except people who don't own a home.
I will work against that tide. I am going to build a company that will build me an affordable house and then I will sell affordable houses to people.
How?
-"Planes already fly themselves" actually they don't and you wouldn't step into one that did.
Frankly, LASIK freaks me out way more than getting into a Waymo car, yet it's a common procedure.
Honesly, true story which might explain why 3 new hairdressers have opened up in my high street in the last year
The barber may not have to worry about robot barbers any time soon, but he should definitely worry about all the new hairdressers that open up as a result of people changing jobs.
Mine moved to a competitor and I moved to him.
They're not easy to automate, at all.
EDIT: that's why i think they won't be replaced internally, but by "disruptive" startups.
Example: how UBER replaced taxi dispatchers.
Nothing to worry about, unless you're invested in automation stock.
A robot that builds shoddy shoes that people don't particularly want any more getting cheaper isn't compelling.
A robot that makes Budweiser 5% more efficiently isn't compelling if what people really want is craft beer.
The best example is autonomous long haul trucking. No drivers means no need to truck stop food. No need for food means no dinner staff. Etc.
Replace a single job and multiple downstream jobs will be affected. That's true everywhere.
It's coming. Can we adjust and readjust quick enough? At what point does unemployment become permanent state? Then what?
The other option is to keep the retirement age down. I'd like to know why so many people who believe in this automation revolution are instead advocating for the exact opposite on the grounds that we actually really have the opposite problem...
You can't take both sides of this fence. Either the automation revolution is real and retirement ages can be lowered or it isn't and articles like this are spouting horseshit.
We don't need a new system. We just need to slowly expand the one we have a little further each year. Lowering the retirement age is a great place to start.
CloudBrewing (like Travis Kalanick’s CloudKitchens but for beer)
In theory there's nothing to prevent the automation of any process. The question is cost.
For craft beer there's 10,000 different kinds for every 10 million liters drunk, all with a completely different brewing process and consumer tastes keep changing in this market because consumers seek novelty.
Whereas for Budweiser there's just one, unchanging process.
So yes, it is much harder to automate than Budweiser brewing and is much more labor intensive.
It's far from the only market where this happens, too.
In that regard, there’s a 200 years old phenomenon where humanity is by the day more reliant on the industry whereas the industry is less and less reliant on humanity.
If it continues, it won’t end well.