Blog: Job Automation and Unemployment
I often read articles or hear people talk about artificial intelligence and how robots are going to take over our jobs. However, I find these notions quite odd and humorous. Some of the best robots out there include voice assistants such as Siri and Alexa. And, to be honest, I can’t remember the last time Siri even heard me correctly. Is that what we’re afraid of? Additionally, few companies are concerned with general artificial intelligence (a machine that could perform any human task). Tech companies are more concerned with building specific tools that improve the lives and productivity of workers. And yes, these innovations can bring about short term effects including unemployment, but the long term effects are absolutely warranted.
For example, spreadsheet software revolutionized bookkeeping and accounting. Prior to such software, accountants had giant pieces of grid paper that covered their desks, where they would manually perform thousands of calculations. But, once VisiCalc (the original and first spreadsheet offering) was introduced to the market, accountants could do the same amount of work in a matter of seconds, that previously used to take days. This new software did lead to 400,000 accounting and bookkeeping jobs to be displaced, but 600,000 jobs were also created. The cost of accounting was now much cheaper, which means companies were demanding more of it and asking accountants more complicated and interesting questions.
For people who are educated and have high-skilled jobs, the spreadsheet is a great example of the consequences this portion of the population will face. They will simply have to adapt to technologies that create more intellectually stimulating and creative work. For those who are so lucky, job automation should not be feared, but welcomed. However, for those who do not have the same opportunities, the situation is more grim. 44% of American workers with less than a high school degree hold jobs made up of highly automatable tasks while 1% of people with a bachelor’s degree or higher hold such a job.
Tech companies are investing in creating tools that automate routinized tasks. The most targeted industries that will be affected by job automation is transportation, manufacturing, and retail, which means drivers, warehouse workers and cashiers are at the highest risk of having their jobs automated. Self-driving vehicles are predicted to threaten 2.1–3.7 million jobs. The people holding these jobs already have very low income and often live paycheck to paycheck. The people displaced from these jobs often do not have the access to opportunities to develop new skills to take on this technological force. These changes in the economy will exacerbate the issues for those who are already on the bottom rung of the ladder.
So, how can we reap the benefits of innovation without sacrificing the livelihood of millions?
Here are a few solutions to consider:
Universal Basic Income
One popular and controversial idea to tackle the effects of job automation is Universal Basic Income (endorsed by many Silicon Valley bigwigs). Universal Basic Income (UBI) entails everyone in the nation receiving about $1000/month from the government to get everyone above the poverty line. Experiments have been conducted in places such as the US, Canada, East Africa and more. Many of these experiments have shown drops in poverty, crime, and hospitalizations, but the experiments often have many limitations and there are not conclusive results. It’s also important to consider the many risks associated with UBI such as an added $1–2 trillion to the national budget, detracting from the structural social issues such as unequal education, nor does it address the toll that losing a job takes on an individual’s mental health. An alternative idea is universal basic adjustment benefit, which would consist of benefits for those seeking jobs such as wage insurance, job counseling, relocation subsidies, etc.
Investing into Education
Another idea: investing more in the education system. In the early 1900s, large investments in secondary education helped the nation make a shift from an agriculture based economy to an industrial one. Billions of dollars are poured into job support programs every year, but a successful model has not been found. However, some community colleges across the United States might have found a method that works. They train their students to meet the needs of local businesses and directly connect them to these jobs. The federal government has done little to take initiatives in this area. The current focus of federal dollars is on retraining, but do little to provide actual opportunities. Investing into the creation of building bridges between local colleges and companies could be a great start to tackling the issues that come with job automation.
Re-training in the Private Sector
Lastly, I want to address the role that companies can play in this space. The most successful training programs have always been run by companies themselves, and we have seen large companies take some initiative thus far. Google has started an online course IT Support Professional Certificate which not only trains users but connects them with job opportunities in corporations such as Walmart and Bank of America. Facebook has launched training programs in Michigan and St. Louis. And, Amazon has a program that covers 95% of the cost of training programs for its warehouse employees to search for jobs outside of Amazon. While this is a start, I believe companies should begin to retrain their existing workers to take on new roles within the organization. Rather than firing and hiring new people, they should utilize the existing human capital and give them the opportunity to engage in more intellectually stimulating work. Acquiring new hires is one of the largest costs to companies, so re-allocating these funds could also be a cost effective method for companies to adapt to technological shifts, while being conscious of their current workers.
The three solutions outlined above are by no means an exhaustive list of methods, but a start in thinking how different organizations can play a role in alleviating the issues that come with job automation. Neither of these solutions are perfect, nor are they very effective if they stand alone. Individuals, companies, universities, and governments should each be working towards solutions because with a holistic approach, progress will not be for those at the top, but for all.