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Bank of England's Andy Haldane Warns Smart Machines Could Take 15M UK Jobs (robotenomics.com)

Posted by samzenpus on from the let-the-robot-do-it dept.

New submitter Colin Robotenomics writes In an important new paper based on a speech at the trade union congress in London, Andy Haldane Chief Economist at the Bank of England and Executive Director of Monetary Analysis and Statistics has examined the history of technological unemployment and has given a thorough review of the literature and implications for public policy. The media will likely focus on the number of jobs that can be displaced and not necessarily Haldane's points on new jobs being created – both of which are highly important as is 'skilling-up'. His report reads in part: "...Taking the probabilities of automation, and multiplying them by the numbers employed, gives a broad brush estimate of the number of jobs potentially automatable. For the UK, that would suggest up to 15 million jobs could be at risk of automation. In the US, the corresponding figure would be 80 million jobs."

33 of 291 comments (clear)

  1. 15M by Alioth · · Score: 3, Informative

    They've been saying this since the 1970s, with all sorts of forecasts of 15 hour weeks. Yet there are many millions now in work compared to the 1970s and everyone's working longer hours than ever.

    --
    Oolite: Elite-like game. For Mac, Linux and Windows
    1. Re:15M by Chrisq · · Score: 4, Informative

      They've been saying this since the 1970s, with all sorts of forecasts of 15 hour weeks. Yet there are many millions now in work compared to the 1970s and everyone's working longer hours than ever.

      In the 1970s they assumed that everyone would work less. What happened is that some work more than ever and others don't work at all.

    2. Re:15M by Random_Goblin · · Score: 4, Informative
      This is not a new problem, and is well covered in Bertrand Russell's In Praise of Idleness written in 1932.

      Suppose that, at a given moment, a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day.

      Someone makes an invention by which the same number of men can make twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price.

      In a sensible world, everybody concerned in the manufacturing of pins would take to working four hours instead of eight, and everything else would go on as before.

      But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work.

      There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way, it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness.

      Can anything more insane be imagined?

      The whole essay is well worth reading, and remains just as true as ever it was..

    3. Re:15M by drinkypoo · · Score: 4, Informative

      They've been saying this since the Industrial Revolution. Millions of jobs WERE lost, but many millions more were created.

      Yes, but it's still a race to the bottom, because of the jobs which were created, more of them were unskilled — read "not paying a living wage" there to see the problem. We're seeing the same thing here in the USA right now; although the total number of jobs grew this last year, the number of people seeking employment has not changed at all. That's both because job growth is only just keeping up with population growth, and because the majority of the new jobs don't pay a living wage. The best we're able to do at the moment is fight a holding action, only we're doing nothing to improve the situation in the future, so that's the same as losing the war.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    4. Re:15M by tehcyder · · Score: 2

      Finally, what happens to the unemployed half? They find new work that exists merely because there were people available to do it.

      If you're suddenly made redundant, a new job does not magically pop up elsewhere to accomodate you. The vast majority of people can not create jobs for themselves.

      --
      To have a right to do a thing is not at all the same as to be right in doing it
  2. This is a good thing. by Avarist · · Score: 4, Insightful

    That's what a lot of people don't understand. 15 million people not having to do tedious mindnumbing work that can be replaced by a machine is a GOOD thing. The fact that this is seen as bad news is proof of our disfunctional society and economical model. The day basic income comes in together with a reform of our economy, is the day automation will truely be embraced as it should.

    --
    In Capitalist US, the commerce controls the Government.
    1. Re:This is a good thing. by wierd_w · · Score: 4, Insightful

      I doubt basic income will ever be instituted, except via close range threat of shotgun blast. (and then only a maybe.)

      What most ideologues of the basic income seem unable (or unwilling) to grasp, is that service and goods providers do not service or provide from the goodness of their hearts. They do it for profit. In order for a basic income to work, then a very large tax must be levied against these agencies, as they are going to be the ones with all the capital. (It makes precisely zero sense to bill the general public, since a good portion will be getting said basic income-- That would just be absurd. At best, the money just moves around, and in the real world, money will be lost from the system over time. To make this workable, the bill has to come from outside the pool being subsidized. That just leaves banks (who create money at will using the fractional reserve system) and for profit businesses who engage in for profit enterprise; especially those that conduct business internationally.) This means that the tax system has to be seriously overhauled for anything like this to work, and the people who would need to be on board to make it happen would be openly opposed to it (because they would be voting against their own profiteering.)

      The only way I see this ever gaining traction, is when there is simply no alternative-- The economy is so unhealthy from the loss of liquidity in the general public's financial engine, that there is simply no hope for future business growth without it. That wont happen unless the entire planet suffers such a financial crisis, since as-is, large actors can leverage different local economies and give a big fat "fuck you" to others, and thus continue being profitable. (See for instance, the H1B fiasco, or just outsourcing IT to India in general.)

      If you think the word "Wellfare" is tainted now in conservative political circles, just wait until something like THAT comes to bear. I would expect tax dodging to take on epic new extremes, even greater than the infamous "Double Irish" trick, as these actors all scramble to avoid being the ones having to finance the growth of all other actors. (Since the one that finances the least, gains all the benefits of the revitalized economy, without as much of the cost, and thus is most poised for market dominance. As such, NONE of them will be willing benefactors.)

      Given the degree that big business already controls world government (Shit, just look at how fucked up the MPAA and RIAA make things, just by themselves.), I think a functional basic income is about as realistic a prospect as expecting Jesus/God to suddenly appear tomorrow.

      It would definitely be nice; the problem is, when you are dealing with greedy fuckholes, you cant have nice things.

    2. Re:This is a good thing. by wierd_w · · Score: 4, Interesting

      It takes more than just free time to obtain (and retain!) a profitable job skill, especially when the eligible pool is being continually eroded.

      It takes money, and aggressive ambition.

      Ultimately, only the most ruthless of the wealthy will be able to afford the training and education to claim a profitable job skill, under this kind of pressure.

      Your suggestion is not workable. The option for people to simply consume HAS to remain on the table, simply because it will ultimately become the ONLY choice, especially as automation further encroaches, and completely eclipses all human labor roles. The alternative is a non-economy, where nobody has money.

      To circumvent this problem, you need to pick one of the following 3 solutions.

      1) forbid automation preemptively, citing that it erodes human employ-ability, and thus total human economic activity. (Enjoy your 19th century standard of living!)

      2) Embrace automation fully, and give up profit-motive as the driving goal of human endeavor. (Yay, startrek)

      3) Accept that automation will ultimately result in a market that cannot stand on its own, and introduce a basic income, supported through currency inflation from the government coupled with taxation of agencies and individuals exceeding the basic income per anum. (OMG, the commies won!)

      Those are literally the only three viable solutions.

    3. Re:This is a good thing. by wierd_w · · Score: 3, Insightful

      The thing is-- Machines are getting to be better at *ALL* human endeavors, including theoretical future ones.

      Already, machines are getting to be quite good at "creative" tasks, for instance.

      This opinion bases itself on the (faulty) notion that there will always be a valid career path in the future for humans to grab on too. Eventually, in the face of perfect automation, there will simply be no task where employing humans is either efficient or profitable.

    4. Re:This is a good thing. by Zuriel · · Score: 3, Insightful

      "Go and get skills" is decent advice to give to an individual, but it doesn't work society-wide.

      Where are we going to get 80 million new skilled jobs for all those newly skilled unemployed people?

    5. Re:This is a good thing. by swb · · Score: 2

      Milton Friedman advocated for a form of basic income, the negative income tax.

      I think such a systems sounds interesting. One argument in favor of it is that it would replace the complex bureaucracies collectively called "welfare" and the inefficiencies surrounding them (complex means tests, restrictive, inefficient markets in which benefits can be used, such as "low income" housing, food stamps, etc).

      Most seem to posit a progressive tax on income that doesn't negate all earned income below the basic income level. Ie, if the basic income is $30k a year, and you had a job that paid $15k a year, you'd pay $7500k in income tax, in the form a of a reduction of the basic income subsidy. This forms an incentive to work -- even low paid work -- since even that work accounts for an increase in total income.

      I think it's doubtful it could be accomplished without raising taxes on high earners and corporations, but there's plenty of people who would advocate that rates are too low now.

    6. Re:This is a good thing. by DigiShaman · · Score: 2

      It's also a good thing that billions of people aren't needed in the work-force, but you can't deny them an opportunity for a high standard of living if the majority of people are outclassed by machines. So I see a few scenarios that will play out. 1; Those that aren't needed will be deemed no longer relevant and thus perpetually live in poverty. 2; War erupts and the "undesirables" are directed to kill each other off. 3;purposeful genocide of the "undesirable" (aka Nazi like movement). 4; Everyone enjoys a livable wage, but with strings attached via the government. And my personal optimistic favorite 5; We don't work for those that control the machines, rathe they become so commoditized that every family and community has access to machines that work for them. Everyone can live in the country and be self-sufficient with a high quality of life and luxury.

      --
      Life is not for the lazy.
    7. Re:This is a good thing. by Dr_Barnowl · · Score: 5, Insightful

      to pay for basic income, everyone has to earn less

      I don't think that's accurate. Productivity since the 70s has doubled, but real-terms wages have been stagnant. In the last 3 decades, the top 0.1% of Americans have doubled their wealth. It's obvious that improved technology can maintain the same lifestyle for the same number of people but with the labour of fewer people - the maintenance of employment levels has mostly been due to the improvement of that basic lifestyle (smartphones, better medical technology, etc) providing jobs for displaced farm workers etc. The system we have encourages spending the extra productivity of technology and economic growth on an expanded lifestyle, but it could be diverted instead to providing a basic lifestyle without requiring extra labour.

      I like the idea of everyone earning a set amount and then working for more, but then the system breaks down, because nobody wants to contribute back.

      In the trials of Basic Income that have been done so far, the total amount of work drops about 4%, mostly accounted for by teenage students studying instead of working to support their family, and mothers looking after their kids. The local economy grows.

      The truth is that the majority of people want to keep their own success

      Is it entirely their own?

      "forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit"

      - Nick Hanauer (self-described billionaire plutocrat)

      The wealth that a few accumulate is based on the labour, and custom, of the many. It depends on a working society. If your society collapses because people can't afford to eat, then you're just a guy with a nice house fending off the starving hordes with a shotgun. And your delivery of fresh organic produce isn't coming this week.

      Basic Income isn't about redistributing wealth evenly ; it's about making sure that no-one starves, and yes, it's also about making sure that the businesses of today have customers tomorrow. The Citigroup Plutonomy Report aside, not everyone can make a living making gold-plated iPhones and giant yachts.

    8. Re:This is a good thing. by notequinoxe · · Score: 2

      Piss off with that rhetoric. There simply aren't enough jobs for graduates as it is now. Intelligent people with firsts in physics, maths and engineering are apply for the same shitty jobs as those that struggled to get 3 low grade GCSEs. The population is exploding, the older people are not retiring, so where are all these fucking jobs then Mr Dail Mail reader? Fucking twat.

      Don't bother. He's either living in a bubble and has no idea how the real world works (he'll get mugged by a few of those unemployed 15 million), or just ill-willed.

    9. Re:This is a good thing. by Ozoner · · Score: 3, Insightful

      > Here's the problem though; to pay for basic income, everyone has to earn less.

      Actually, no.

      Up to now the increase profits from automation have gone to the Super Rich. There has been massive transfer of wealth from the poor and middle class.

      To fund "basic income", taxation has to be made fairer so that more profits stay with the people.

      Probably won't happen in America though. Not till after the mass riots.

    10. Re:This is a good thing. by coastwalker · · Score: 3, Insightful

      If the US had the same income distribution it had in 1979, each family in the bottom 80% of the income distribution would have $11,000 more per year in income on average, or $916 per month. Half of the U.S. population lives in poverty or is low-income, according to U.S. Census data.

      Sadly the 0.1% have taken all the wealth generated by economic growth since 1970 and fooled the rest of the population into believing that this is what they deserve. Remember all that relentless Fox News propaganda is paid for by those who think that this is justified.

      If 80 million US jobs are destroyed by automation then they will all starve according to the current socioeconomic model of the U.S. You may want to remember that the next time you engage in a political debate.

      --
      Facts are history now plebs have politics for religion on social media.
    11. Re:This is a good thing. by orasio · · Score: 2

      3 is just an implementation of 2, maybe flawed.

      In any case, it's easy to understand that there _will_ come a time where money stops being the center of our lives, and we produce enough stuff for everyone without having everyone work 40+ hours a week.

      The question is _when_, and _how_ that change happens. Marx thought it would happen soon. The commies thought it was possible a century ago. Looks like they were wrong in that, also in their methods. They also thought they knew what people wanted, looks like they were mostly wrong. We still need to see what happens with China's version.

      The lukewarm socialist think that the welfare state is going to grow until everything is taken care of by the state. Has it problems, but might work. Basic income is one of the big steps in that direction, and one of the easiest measures to implement.

      Right wing people seem to just think that economy, both physical and virtual, is going to keep growing forever, and that scarcity will fuel its growth forever. If there comes a time that that no longer happens, there's no plan, and they probably hope to be already dead by then.

    12. Re:This is a good thing. by Fire_Wraith · · Score: 2

      On some level, basic income is an attempt to maintain the current market driven setup of the economy beyond the point where general human labor has any appreciable value. Right now, your income (ability to consume) is dependent on the value of the work you do (or the property/etc you own, if you are so privileged). As that breaks down, so do the markets that your demand drives. Could Walmart/etc survive losing 20% of its current customers? At best, it would be a massive economic contraction, of that sort that risks feeding on itself (businesses fail/stores close due to lack of demand, meaning more people out of work, meaning less people buying, meaning more businesses fail, etc). And that's ignoring the fact that starving people don't tend to go quietly.

  3. Re:In other news by 91degrees · · Score: 2

    Unless the change happens overnight, society will adapt to take advantage of the huge surplus workforce for jobs that machines can't do.

  4. Re:In other news by EmeraldBot · · Score: 4, Insightful

    15M UK people could do something else. The world fails to end.

    If this bank doesn't help them find some work, there's going to be hell to raise, especially when 15 million people is about a quarter of the entire UK's population. If a fourth of the US was layed off, do you think that would end peacefully?

    Automation makes sense when the job is dangerous or risky to humans, or requires extreme precision. Replacing everything with automated machines for profit gains makes it hard for low end jobs to exist, and thus for low end workers to be employed. We have here a very large mass of people who feel hopeless and have nothing to lose. We also have a very large resentment towards the upper class and a weak middle class. History has presented us this situation before, and I encourage you to research what happened then.

    --
    "Set a man a fire, he'll be warm for the rest of the night. Set a man afire, he'll be warm for the rest of his life."
  5. 15M jobs is 50% by darthsilun · · Score: 2

    UK population is 64M.
    The UK workforce is 30M[1]
    You're trying to tell us that half of all jobs in the UK can be replaced by "smart machines"?

    Somehow I don't believe that number.

    [1] http://www.dailymail.co.uk/new...

    1. Re:15M jobs is 50% by drinkypoo · · Score: 3, Interesting

      You're trying to tell us that half of all jobs in the UK can be replaced by "smart machines"?

      Just think about how many jobs you could automate away with a very simple shell script. Now think about how many jobs could be automated away with a very simple shell script and some basic robotics. The mind boggles. Also, a lot of jobs are just lost because the need for them goes away. For example, if we shift from internal combustion to electric motors, it's a fact that you won't need as many people to work on them because they are so much simpler to produce and so many of the steps can be completely automated, like motor winding — and they don't break down as much to begin with. It's simply a fact that you need less people to produce and maintain them. That's progress eliminating jobs, and not replacing them with anything.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
  6. Re:In other news by Dr_Barnowl · · Score: 5, Insightful

    The example I keep seeing used is self-driving vehicles, particularly trucks.

    They've already proved themselves in mining contexts - they use less fuel, wear their tyres less, less maintenance, downtime, and of course, no wages to be paid.

    People are falling over themselves to get them approved for road use. Truck driver is 3.5M jobs in the USA. There are about 285,000 HGV drivers in the UK.

    The trend is already that middle class jobs are being eroded and replaced with low waged work. Truck driver is unglamorous but they probably count as middle class guys with the wages they get.

    What jobs are we going to find for truck drivers? They're not all going to train up to be robot-truck mechanics (as above, robot trucks are pretty much existing trucks with a few extra sensors and something wired to the power steering etc - and require less maintenance). You'll have all those middle-class people with a lower disposable income, so the market for services and consumer goods will shrink, so what industry will expand or arise to employ them?

    Tech changes that increase production, expand wealth and (eventually) the job market. Spinning Jenny and her ilk turned cotton shirts from a luxury into a mass-market commodity.

    Tech changes that just do existing work with less human labour do not expand wealth. The automated trucks drivers, administrative assistants, warehouse pickers, burger flippers, etc, etc, that are coming down the pipe do not increase demand - if anything, they decrease it, by reducing the amount of wages entering the economy.

  7. Definitely correct on one point by digitig · · Score: 3, Interesting

    The article is definitely correct on one point. It says "The media will likely focus on the number of jobs that can be displaced and not necessarily Haldane's points on new jobs being created." And the /. headline? "Bank of England's Andy Haldane Warns Smart Machines Could Take 15M UK Jobs."

    --
    Quidnam Latine loqui modo coepi?
  8. Re:Still waiting for burger flipping robots by Dr_Barnowl · · Score: 2

    You won't have too long to wait.

    Momentum Machines burger maker.

    Want a patty custom ground out of 1/3 pork, 2/3 bison? No problems. The price of a burger is already set by the market. This thing eliminates the labour, the savings can be spent on high-end ingredients, gourmet burgers for McD's prices.

    The graph in this article is also a great illustration of why all the "oh, but tech makes new job opportunities" guys are wrong this time around ; the food-service industry already absorbed more than the unemployment from the manufacturing industry in the US, trading well-paid labour for subsistence on tips.

  9. Re:Communism = stagnation by Sique · · Score: 3, Insightful
    You mess two things up, which makes your logic flawed.

    In Bertrand Russell's example, no one of the needle workers actually strives to improve his skills. But instead, the companies replace the old needle manufacturing equipment with new ones which doubles the productivity of their workers, and all of the workers get retrained for the new process. So yes, the inventor of the Improved Needle And Pin Machine gets his share, as he has outfitted all needle manufactures with his new invention. But the global market for needles does not increase, as needles are totally cheap already. A lower price for needles does not increase demand. So what we have now is companies with 100 percent surplus manufacturing capacities competing in a tight market, and half of them will get bankrupt in the process (it may be purely random which one get hit), until the manufacturing capacity for needles fits the demand again. It means half of the workforce will be out of a job, even if they don't differ in any way from the part of the workforce, that is still employed.

    So contrary to your hypothesis, it's not the individual strive or laziness that made the difference between unemployed and employed needle workers. It's pure random chance. They all trained for the new manufacturing process, they are all equally skilled. But they were just to many, if they kept their working schedule.

    --
    .sig: Sique *sigh*
  10. Re:In other news by sjames · · Score: 2

    That's the elephant in the room. Economists (especially those who occupy armchairs or political office) have miossed that the industrialization that improved everyone's life in a free(-ish) market did so because there was a severe labor shortage and even then, it only worked out after a great deal of civil unrest including a number of fatal confrontations.

    The current industrial revolution is taking place during a labor surplus. Freeing humans from the need to labor is a laudible and achievable goal but the labor market and it's imaginary magical invisible hand isn't up to the task.

  11. Re:In other news by Bengie · · Score: 2, Insightful

    All labor can be automated given enough time. The solution is not to require labor to survive. Star Trek economy is the eventual end-state of where we're going.

  12. Re:In other news by PopeRatzo · · Score: 4, Interesting

    society will adapt to take advantage of the huge surplus workforce for jobs that machines can't do.

    And by "adapt", you mean "either learn to live with much higher poverty levels or come to terms with a much larger welfare state."

    Because there really aren't any other choices. The world has reached peak jobs.

    --
    You are welcome on my lawn.
  13. Re:In other news by Fire_Wraith · · Score: 4, Insightful

    The question isn't what we do when we get to the Star Trek post scarcity economy. The question is more what we do in the between period, because what we're approaching now isn't post scarcity, but rather, an economy where the marginal value of low skill human labor is so low that it's practically worthless for most purposes, and certainly is far below what it would take to maintain a single person at poverty level subsistence.

    What we'll need to do is move to a guaranteed basic income. If robots do most of the industrial labor, then we tax that productivity instead of human wages. Give money to people who will spend it on food/clothing/etc, thus maintaining a demand for the goods the robots make (since in a market, you need both supply and demand, otherwise things start going bad quickly on a macro level). Eliminate the minimum wage, since everyone earns enough to live on, and let market forces freely set the value of human labor. $2 an hour is pocket change, but that's really all I'd need it for at that point. You wouldn't need welfare or such, since the minimum income covers it - and it's fair, because everyone gets it. If you make more money, you just add it on top of that - so instead of making $100k, you might earn $80k salary, but get your $20k basic too.

  14. Re:In other news by PopeRatzo · · Score: 2

    Much more will be automated, so it will be cheaper.

    If you don't have any money, "cheaper" doesn't help.

    How many millions had their jobs replaced by mechanised production lines, and then by robots?

    As someone has already pointed out, the first industrial revolutions occurred during a labor shortage. Now that there is a labor surplus the end result will be more people with no jobs and no money.

    --
    You are welcome on my lawn.
  15. Re:In other news by khallow · · Score: 2

    The example I keep seeing used is self-driving vehicles, particularly trucks.

    And the example that keeps getting ignored is farming. If out of work farmers and their descendants couldn't get new work, then we'd be around 80-90% unemployment.

    Tech changes that just do existing work with less human labour do not expand wealth. The automated trucks drivers, administrative assistants, warehouse pickers, burger flippers, etc, etc, that are coming down the pipe do not increase demand - if anything, they decrease it, by reducing the amount of wages entering the economy.

    Nonsense. The ex-truck drivers just do something else. Now, you have the wealth generated by the automated truck drivers and by the labor of the ex truck drivers. This is not only an expansion of wealth, it is an expansion of the rate of increase of wealth.

  16. Re:Yawn by thinkwaitfast · · Score: 2

    but unlike the earlier times, this time is different