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The Luddites Are Almost Always Wrong: Why Tech Doesn't Kill Jobs
Mystakaphoros writes "Mike Masnick of Techdirt argues that we can all put down our wooden shoes and take a chill pill: technology 'rarely destroys jobs.' For example, telephone operators have largely gone by the wayside, but a (brave) new world of telemarketing and call center support jobs have opened up because of advances in technology, not to mention the Internet. Masnick points out writing from Professor James Bessen that makes the same point: 'In other cases, technology creates offsetting job growth in different occupations or industry segments. For example, word processors and voice mail systems reduced the numbers of typists and switchboard operators, but these technologies also increased the number of more highly skilled secretaries and receptionists, offsetting the job losses. Similarly, Amazon may have eliminated jobs at Borders and other national book chains that relied on bestsellers, but the number of independent booksellers has been growing and with it, more jobs for sales clerks who can provide selections and advice that Amazon cannot easily match.' That said, I think it's worth asking: if machines are going to replace all our fast food workers, are we going to start paying our gourmet chefs minimum wage just because we can?"
Hey now, let's not let facts get in the way. This article uses the same flawed logic as Rick Perry when he says under his Governorship he's created thousands of jobs without telling you roughly 90% are minimum wage jobs.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
Though technology may not "destroy" jobs, it certainly shifts them. For example, car factories are increasingly populated with robots. Although that creates economic prosperity that may show up somewhere else, it certainly displaces the unskilled, who previously could at least hold factory jobs.
In my area, we now have garbage trucks that pick up (standardized) trash cans. Presumably, this leads to fewer "garbage men" - who used to be the archetypal unskilled laborers. But the few garbage men that remain now must be skilled as truck drivers.
So, assuming that a certain portion of the population will always be unskilled, and assuming the portion of unskilled jobs is shrinking, the unemployable underclass will continue to grow.
Tech most certianly does kill jobs. It may make even more in the long term, but they are very different jobs. For the 50 year old newly laid off factory worker with kids he has to put through college now, the fact that there are suddenly lots of new jobs in robot design isn't a lot of comfort.
The basic parameters of the argument are clear, sure, and have been clear for a few hundred years: automation may replace large numbers of jobs with machines controlled by a smaller number of people, but may also create new jobs, either directly working on the technology involved, or indirectly in other areas. The more difficult questions are in the details. Do the numbers always match up, and what factors influence whether they match up? Does automation lead to more general shifts in the economy, e.g. either concentration of wealth or decentralization of wealth? If it could do either, what factors influence that?
My own view is to be rather skeptical that there is a universal answer. These kinds of articles give off a whiff of a kind of Panglossian view that the technology/economy ecosystem is in a Gaia-like eternal balance, and I don't see a strong reason to believe that's true. Instead I think we need to look at specifics to determine what effects a given technological advance, within a particular existing economic situation, will have.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
It also fails to take into account that the skills required for the jobs that disappear are entirely different than the skills required for the new jobs that replace them. This means you lose everything you've worked for, career-wise. I might have 30 years in as a buggy whip craftsman, but that doesn't mean I have the skill set required to assemble an automobile. It also means that the salary I've been building up disappears. Even if the jobs are equivalent pay ranges, a senior buggy whip architect probably makes a lot more than a junior steering column technician.
If I started at $40,000/yr 30 years ago and make $75,000/yr today and suddenly lose that because my entire industry has been obsoleted -- including my retirement possibly -- and can now only take a new job at $50,000/yr... I'm still screwed.
I'm not arguing we should stop inventing, but its hugely callous to ignore the difficulties inflicted on people when this kind of thing happens.
The road to tyranny has always been paved with claims of necessity.
Science fiction writing covers the two limit cases pretty well. Let's say machines can now account for all basic human needs, producing food, clothing, shelter, etc. sufficient for the whole human population. Then at the dystopian and utopian extremes, we have:
Possibility 1: These machines are owned by a small ruling class, who uses their control over this vast pool of robot labor to rule the world, and over the impoverished underclass who own no robots.
Possibility 2: These machines provide for everyone's needs, freeing up humans for a glorious age of space exploration, science, what-have-you.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
This article is flawed because it relies on historical patterns when we are entering entirely different age. Industrial Age is over and we are transitioning into Information Age. Comparing pre-industrial agricultural society to early industrial age is much better comparison, but then it doesn't support the premise. Few of us that are familiar with the history will tell you that this transition resulted in a lot of societal ills and displaced farmers and merchants did not all find jobs in the factories. Few that did find jobs were ruthlessly exploited and did not at all benefit from this transition.
Comparing telephone operator jobs to telemarketing jobs won't tell you what will happen when automation combined with a growing population will make any kind of job scarce. It is very possible that within generation only top 10% of intellectual ability will be needed, rest will be automated away. Even today we know that productivity already entered exponential growth period. We also know that benefits of this productivity are not reflected in growing wages - nearly all of the extra wealth created by this productivity increase is channeled into corporate dividends and not wages..Pattern is very clear - less workers doing more for about the same pay. This cannot support growing unemployed class by creating service job opportunities, unless you are talking McJobs.
Attempting to portray critics as Luddites is 'poisoning the well' further compounded by willful denial of empirical evidence of the societal trends to the contrary. Yes, author is correct - technology is morally neutral, it is nether good nor bad. What we do with it - and presently as a society we chose to enrich 1% of our population, is what we should focus on.
That's one way of defining the average (mean) standard of living, yes. But that does not necessarily mean that the median standard of living also increases in the same scenario, without stronger assumptions on the distribution.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
But cost of living and inflation don't always go up at the same rate either. Why should be tie minimum wage to inflation rather than cost of living?
It also fails to take into account that the skills required for the jobs that disappear are entirely different than the skills required for the new jobs that replace them. This means you lose everything you've worked for, career-wise. I might have 30 years in as a buggy whip craftsman, but that doesn't mean I have the skill set required to assemble an automobile. It also means that the salary I've been building up disappears. Even if the jobs are equivalent pay ranges, a senior buggy whip architect probably makes a lot more than a junior steering column technician.
If I started at $40,000/yr 30 years ago and make $75,000/yr today and suddenly lose that because my entire industry has been obsoleted -- including my retirement possibly -- and can now only take a new job at $50,000/yr... I'm still screwed.
I'm not arguing we should stop inventing, but its hugely callous to ignore the difficulties inflicted on people when this kind of thing happens.
"Callous" is really the only possible word I think we can use here. Look, I respect people's understanding of the benefits of capitalism. There are some brilliant capitalists around here. But when the problem is "solved" by market forces, there's another problem left over-- lots and lots of now-unqualified, unemployed people. Just using their children's hunger as a whip to scramble for a new job may again be a market force in action, but it's certainly not kind.
And then you run into the problem of... if we're all broke on our asses, who is going to buy your products?
The success of this machine likely leads to a greater demand in [Fast Food Automation?]. This creates more Grade-A jobs for engineers (high paying). It also increased demand for Fast Food Operator-consultants that can help put there job into a process for automation (Grade-D?). It created jobs (probably Grade-C) for technicians, installers, and repairmen for all the new equipment that's selling like McDonald's hotcakes.
The new equipment increased resource efficiency for McDonald's franchise owners. With more revenue they didn't have before, they may take there family on an extra vacation each year, buy a new car for their child instead of making them find an ol' beater, or open a new McDonalds branch. All of these happenings increases the demand for something, which results in a higher demand for a variety of jobs (not just Grade-D) jobs.
More training for those pencil pushers in your example increases the demand for pencil pushers capable of providing the training.
Is everything in perfect equilibrium? Probably not. But its also only likely to damn those who just sit around and sulk.
Meow
How do we really define "provides a basic level of acceptable living"? 100 years ago, even 50 years ago, it was acceptable to not have indoor toilets (my mom didn't when she was a kid, in Canada). Is it considered OK if people can't afford internet or cell phones? Because neither of those are really necessary, and I know plenty of people who go without them, but there's also a huge group of people who think they can't live without them. Same goes for a lot of other luxury items, like cars and designer clothes. Defining that "basic level" is extremely difficult because in a free market, the people making stuff that people buy continually raise prices to the point where people can't just barely afford to buy the necessities. Also, there's the question about people who simply don't need to make an "acceptable living" with their job. High school kids who live at home, sometimes want a few extra dollar to spend on movie tickets and skateboards don't need to be making as much as a someone supporting themselves. Sure you can make the minimum wage lower for those under 18, but that discriminates against young people who for whatever reason don't have dependable parents and need to earn their own money, while continuing to attend highschool classes. There are other ideas, like garuanteed income supplements, where you let the employers pay whatever they and the employee agree on, no minimums, and the government tops up the difference between what the person is making, and the acceptable minimum. But very few governments want to have these services, because it looks like a free hand out, even though in many cases it would be cheaper to operate than the current welfare systems.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
The unwillingness to prosecute businesses who employ illegal aliens has probably cost more Americans jobs in the last 20 years than any technological advance.
FTFY
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
You'll be able to leave your job at McDonald's and get a job cleaning the offices at the robot manufacturing plant!
Are you kidding? They have an industrial-sized Roomba.
Sounds like that "first they came for the Jews" saying.
If Slashdot were chemistry it would look like this:Cadaverine
What is of more concern is that the proliferation of technical jobs is gradually excluding people of less than average intelligence - a nontrivial fraction of the population.
Exactly. Because nothing ever goes wrong with millions of stupid, angry people with lots of time on their hands.
It took approximately 65 engineers 2-3 years to design a major line of industrial engineering robot to build infrastructure (say... steel girders), and maybe another 100 full time jobs to build, market and deliver the product.
This line of industrial engineering robot displaced 18,000 low-skilled jobs and replaced them with around 200 high-skilled jobs (maintenance techs).
Those other 17,200 went into the service industry or construction (based on the boom-bust cycle) and are now highly dependent on local fluctuations of the economy.
So, what happened here was an increase in productivity and profits for every business involved - a substantial decrease in salary costs, and a notable decrease in workforce, across the board.
What it does is stratify society. There are 17,000 people struggling to re-train and find low-level jobs, and 300 very well paid engineers and technicians paying them to do menial work.
Then again, perhaps their factory work was menial in the first place, but it is worth pointing out that the massive economic growth of the last 80 years was primarily based on those factory jobs being "middle class".
Why can't tech make having to go to work obsolete?
Why can't we make all the tech stuff, like robots, do all the dumb work for all of us so we can spend the rest of our lives playing, or do the kind of work we really enjoy? Isn't this the frigging thing we should strive to achieve in society? Not create more jobs, but less?
I very much agree with this. We should all be working less. However, American capitalism isn't set up that way. Capital always wants Labor to work more for less money. Everyone would have to be paid more (or the same) for doing less work.
I'm certainly down for that, but we'd probably need a law restricting the work week to 20 hours or something like that.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)
If instead you pay a little more, you can hold onto those good workers and have maybe 20% of the head count you had before and increase profitability.
Seriously, show me a call center where you can eliminate 4/5 of the employees and still keep up with call volume?
Really?!
Do you think management is that incompetent? I know most middle-management in a call center is a tad slow, but 4/5? You're completely full of it.
Inflation is primariliy measured by changes to the CPI.
The CPI is calculated by taking a "basket of goods" that a consumer would buy.
This includes things like... a pint of milk, a loaf of bread, a gallon of gasoline, a pound of beef, a 600sqft apartment in downtown of several cities, a 1200sqft house in the suburbs of several cities.
Then you average it out and see if it changes over time.
How is that not cost of living?
Here is the actual basket and weighting from Canada:
http://www23.statcan.gc.ca/imdb-bmdi/document/2301_D48_T9_V2-eng.htm
Capitalism requires that increased productivity should cause increased wages. When the 10 Luddites are replaced by a machine (that costs the same as paying 4 Luddites) and 1 Luddite, does the remaining Luddite's pay increase 10 fold, 4 fold, or 2 fold? Where does the money go? This is the riddle of the robot menace, and why Capitalism can't solve the problem by itself.
Call center - no. But tech support - oh hell yes. 2-3 qualified people making about 2-3 times what the fresh off the street people in India make can resolve about 5 times the cases with better customer satisfaction. Not to mention all the money saved with the lack of escalations and hand-holding.
Those who can, do. Those who can't, sue.
For many people, no car == no job. Most of the U.S. is laid out assuming that people have a car. In theory, they could move to where they don't need a car, but things are more expensive in such places to the point that it would be cheaper to get the car.
Internet is becoming increasingly a necessity in order to participate in society. Educated voters can't depend on network news to be informed anymore.
Food stamps and other social safety already act as a handout to minimum wage employers. We pay the costs of maintaining their worker units and they profit. Minimum wage needs to be high enough that employers are actually paying the full cost of an employee's labor.
This line of industrial engineering robot displaced 18,000 low-skilled jobs and replaced them with around 200 high-skilled jobs (maintenance techs). Those other 17,200 went into the service industry or construction ...
Also, in a truly shocking occurrence, 600 people managed to disappear without a trace.
A worthwhile read on the subject: Karl Marx on the effects of technological improvements You might not agree with it, or you might shy away from it solely because of who wrote it, but it was a serious economics argument explaining what happens and why.
I am officially gone from
Except, of course, that if a person could move from crappy Grade-D job to rewarding and life-affirming Grade-B job, he'd already done so. Eliminating Grade-D job doesn't give people who previously did it an ability to get Grade-B jobs, it just means they're now facing a lot more competition and desperate since it's Grade-B or nothing.
What happens when you no longer do get the opportunity to express this talent, because machines have automated the task or made it obsolete? What about those who's talent is buggy whip making? Or truck drivers, once cars are fully automated?
Or we could just accept that, as necessary work gets automated, most of humanity is going to be on welfare. It's like an idealized version of ancient Greece, except this time the slaves doing the work are machines and thus don't mind it. It does, however, require shifting away from using work as a measurement for the worth of an individual, like you're doing here.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
If you look at it with a completely cynical and sociopathic view, then yeah, there's nothing wrong with it.
When you look at it with a human view, you see people too old to get a new job, and too young to retire, being put on the streets with a big "fuck you".
Eventually you end up with a large enough mass of unemployed people, which becomes a problem. You have, on one hand, people feeling sorry for them but unable to do anything; and sociopaths who think humans are a disposable good, with an overly simplistic and optimistic view of the world and an "adapt or die" motto.
You talk about social security nets, but the truth is, these people won't be covered properly. Right now the US is divided with the whole Obamacare thing. Money lets out the worst of people. Just listening to the arguments against universal healthcare in the US is scary. You can really see how people only care for themselves, fuck everyone "i'm sorry you have to die but it's my money". Just wow. Not to mention the "it's your fault you have to die because you didn't save money for your treatment" types. Now think that, instead of giving people free healthcare, you have to give people money for nothing.
Karl Marx had a lot of good analysis on the behavior of economies. It's just that he drew the conclusion that communism was the ultimate solution to the problems. It's still worthwhile to see his data, even if his conclusions aren't so hot
There are not ideal examples, but I'm going to go with the United States, Iceland and Russia.
During the "Great Depression" existing loan obligations were written down to fair market value to keep the middle class from becoming homeless, a minimum wage bill was passed, and the SEC was created to help regulate the banks. This is of course, substantially different than what unfolded during the "Great Recession".
Both Iceland and Russia faced staggering debt obligations. In both cases they defaulted on them. In both cases other countries (temporarily) stopped lending them money, leading to short term pain, but also reform since A. they could no longer spend money they didn't have and B. since imported goods became much more expensive, local manufacturing flourished. Fast forward a few years and you see thriving economies.
Meanwhile, you have the countries with staggering debt that couldn't default, and they're pretty well screwed in perpetuity since the country sided with the banks even though they have a snowballs chance in hell of paying back the principal no matter how many 'austerity' measures they pass.
That is a very nice sentiment except those with power and wealth continue to game the system to ensure they retain their power and wealth. Even if to big to fail banks and corporations had been allowed to fail those with the power in those businesses would have stepped out with the lions share and left everyone else holding the bag.
Also anytime people think it is ok to bankrupt a person for becoming sick or injured as an opportunity for others shows how shallow the world has become. Here's hoping your health catastrophically fails so you can come back and praise those who lives are improved at your expense.
Technology allows jobs to be done with less manual effort. By its very nature, it leads to less jobs; if it didn't, it wouldn't be adopted. Replacing 50 auto workers with 1 robot may create 1 robot repair tech job, but it's not going to produce 50. Otherwise you'd keep the auto workers on the job.