Economists Worry We Aren't Prepared For the Fallout From Automation (theverge.com)

A new paper from the Center for Global Development says we are spending too much time discussing whether robots can take your job and not enough time discussing what happens next. The Verge reports: The paper's authors, Lukas Schlogl and Andy Sumner, say it's impossible to know exactly how many jobs will be destroyed or disrupted by new technology. But, they add, it's fairly certain there are going to be significant effects -- especially in developing economies, where the labor market is skewed toward work that requires the sort of routine, manual labor that's so susceptible to automation. Think unskilled jobs in factories or agriculture.

One class of solution they call "quasi-Luddite" -- measures that try to stall or reverse the trend of automation. These include taxes on goods made with robots (or taxes on the robots themselves) and regulations that make it difficult to automate existing jobs. They suggest that these measures are challenging to implement in "an open economy," because if automation makes for cheaper goods or services, then customers will naturally look for them elsewhere; i.e. outside the area covered by such regulations. [...] The other class of solution they call "coping strategies," which tend to focus on one of two things: re-skilling workers whose jobs are threatened by automation or providing economic safety nets to those affected (for example, a universal basic income or UBI). They conclude that there's simply not enough work being done researching the political and economic solutions to what could be a growing global crisis. "Questions like profitability, labor regulations, unionization, and corporate-social expectations will be at least as important as technical constraints in determining which jobs get automated," they write.

Comments

What about it?

[rsilvergun]

aside from climate change this is the biggest issue facing the human race this century. We've built a civilization around the notion that if you don't work you don't eat and we're about to run out of work. Productivity gains are already biting into wages. If minimum wage had kept pace with inflation it'd be > $20/hr. Instead it's about half what it was in the 70s inflation adjusted.

I keep hearing they'll be new jobs. But what I see is high paying factory jobs being replaced by low paying service sector jobs. We keep ignoring the fallout from the last few industrial revolutions. Luddite wasn't always a casual insult, it was a movement in response to job loses from new tech. It took 80 years for more new tech to catch up to the job losses from the last industrial revolution. This is fact, look it up.

Finally I get the people who kid themselves and say it's not a problem. What I don't understand is all these folks acknowledge the problem and shrug saying "laissez faire". Seriously, when in your life has the best answer to a complex problem been to ignore it and hope it all works out for the best?

Re:What about it?

[ShanghaiBill]

People at the top are making far more. People in the middle and below have been stagnant for nearly 40 years.

False. Most of the wealth increases over the last 40 years have gone to the extreme poor, the people at the very bottom, making less than $1 per day. Billions of people have moved out of that condition.

The people that have done the best are poor people in poor countries, who make up over 70% of the world's population. Rich people in both poor and rich countries have also done very well. Middle class people have done reasonably well, and the middle class in poor countries has greatly expanded.

The ONLY people that have not done well are poor people in rich countries, who are still mostly in the top 20% income quintile globally.

Re: What about it?

[Falconnan]

Well, when Obama took office, the economy was contracting at a record post-war pace. Since then, the rate of decline of wages had been reduced a bit. Further, the Democrats only controlled the legislature for two years during the Obama administration. Two years to reverse a 40-year trend seems a bit unreasonable.

Wealth concentration has become a serious concern not because of social justice concerns (though that could be debated as a consideration), but soon as a serious threat to the economic and political stability of the world generally. Since the baby boomer generation gained marginal control of the vote, investment in society has declined to almost nil, while the tools for concentrating wealth have become far more effective. Trading algorithms run faster than any human can process, and the truly powerful can afford to have servers as close as possible to the exchanges for maximum advantage.

The true reality is we are on the verge of a massive economic shift, and it is already in progress. The odds are against any kind of "better" jobs to replace those lost to automation. New career fields will close faster than they can be created and replaced. Given what I do for a living, I can confirm this is already happening, and rapidly. The old notions of capitalism as it exists currently cannot survive without starving out the population.

I may think Trump is the worst president in over 100 years... You may think Obama was horrible... It's irrelevant. Without leaders who can read the writing on the wall, we're all screwed. That shrinking middle class is going to rapidly disappear, and those who are at the fringes of the upper economic class will become destitute as well as their supposedly "skilled" jobs disappear.

You add the specter of looming arms races with the other global posers, and the military need for rapid response will drive AI development in ways that will accelerate this process out of control as it bleeds into the civilian economy.

Save the blame game and ideological spats for debate class. We don't have time for them anymore. We need to start serious discussions about what to do about what's here, and what's coming.

Re:What about it?

[PopeRatzo]

So what you're saying is the drop in the Obama Administration wasn't just 5-6%, but it was closer to 20%?

No, the average CPI increase under Obama was less than it has been under Trump. Wage growth was better under Obama. Employment gains, in both the regular unemployment and the U6 measurement which includes total workforce participation, all did better under Obama. There is not a single economic indicator under Trump that does anything but continue the trajectory established by the Obama administration.

Except one: The Dow is down for the year 2018 so far, and it's already July. It was highest before the Trump/GOP tax bill hit and it's now about 2500 points off it's high. There was never a 6 month period under Obama where the DOW decreased that much. Never.

Re:What about it?

[sg_oneill]

Socialism, the real thing, wont happen any time soon, it really need genuine economic distress, the sort you see south of the border before people decide keeping the rich rich and the poor poor is not working out so well for them. Marx pretty much said effective socialism arises out of peoples self interest (And specifically as a class of people poor folks basically deciding theyve had enough and banding together to solve it). As it stands Americans have too much invested in capitalism to want it to go away completely.

However hybridized social-welfare systems are both plausible but also effective. Europe, Australia, Candada, etc all have similar histories of strong investments in capitalism, but have also adopted degrees of welfare to ensure people dont fall completely out of the net with health and basic living standards.

At some point politicians will be forced to realise that either they get a decent welfare and healthcare system in, preferably a universal minimum wage or some income tested variant, or people will start lighting things on fire or pointing guns at politicians.

Not really

[Kohath]

Economists take the posture of pretending to worry about automation. They are playing to (and condescending to) an audience.

In truth, Economists know that automation and the associated productivity will make life much better, just like it always has. Automation is why you aren’t at the stream beating your dirty clothes against a rock to clean them. It’s why you aren’t manually grinding grain between 2 flat stones to make an edible paste right now.

Economists know that watching over a bunch of self-driving trucks on a computer screen is better than spending your life behind a steering wheel.

Economists should be able to see the 4% unemployment we have and the possible start of inflation due to wage pressure. And they should be able to see the productivity gains from automation, and see that automation solves the nascent labor shortage and productivity gains prevent wage inflation (because output rises faster than wages as labor becomes more productive).

But they will tell you they are worried. For some reason, that's what you want to hear. Why don't you want to hear the good news instead? The good news is actually true.

Re: Ask 3 economists

[nnull]

Nothing will be different other than more local manufacturing. Modern automation is bringing in a lot of local manufacturing already. I don't see this as a problem. Even Chinese companies can't compete against local companies doing stupid injection molds of iPhone cases. Costs will drop overall over time.

I find all this anti-automation talk politically motivated as it's a win for local industry. The Chinese buying up commercial and industrial property making it impossibly expensive to do business and not having a care in the world if it's vacant for decades as proof of this.

Re:Income per capita is meaningless

[Anonymous Coward]

As long as you work for someone else, you're a slave to their whims. I know plenty of guys here in Texas who make tons of coin doing their own thing. My lawn care/painting buddy from El Salvador makes over $100k a year painting two house a week in the Woodlands/Conroe/Spring area. He also employs three full time lawn care guys who cut lawns for the wealthier white guys at 75-100 a lawn, and they do 10-15 lawns a day. The lawn guys are making $60k a year, no nights, no weekends, no on-call BS. I'm half tempted to go into the trades myself because IT is a shell of its former self.

I started off as a Unix admin, moved to Linux, can program, admin about anything, but everything in Houston has been either outsourced or went to the "cloud". All of the wealthiest people I associate with are self-made: plumbers, electricians, and welders. All are $100k men and they all work for themselves. I've come to the conclusion this summer that I might make the break into the trades because they cannot be outsourced or automated. You cannot automate plumbing needs, welding in the specialty my buddy does, or running and installing electrical lines. Hell, my barber buddy made $80k last year in a two man shop. I'm fully convinced that a man is only his own man if he works and generates his own income and calls the shots.