It seems to me….
“I see robotic technology getting rid of the dangerous, the dirty, and the just plain boring jobs. Some people say, ‘You can’t. People won’t have anything to do.’ But we found things that were a lot easier than backbreaking labor in the sun and the fields. Let people rise to better things.” ~ Rodney Brooks.
The U.S., with the rest of the advanced nations closely following, is on the verge of an unparalleled social evolution which many conservatives prefer to deny. The current extent of economic transformation, primarily due to technology change, exceeds that of all previous cultural advances and is potentially the greatest economic and social threat we face. Our economic model is in a rapid transition but most conservatives just don’t get it. It is unfortunate that real change normally only occurs as a result of some crisis but now is the time to begin to adjust our national economic model for a post-manufacturing world.
An important lesson from the industrial revolution is that as traditional jobs disappear, it is necessary to ensure that people of all ages are sufficiently educated to prepare and take advantage of the new emerging roles in their immediate future. Ignoring these trends and continuing to prepare children with skills for roles that will no longer exist is definitely not the answer. Clinging to business models of the past or attempting to recreate the good-old days is equally disadvantageous. These changes demand new skills, new mindsets, new competencies, and new institutions.
Human labor is currently indispensable in manufacturing but similar to equine labor a century ago, as robots grow increasingly nimble, humans are appearing more vulnerable. Humans still remain far more cognitively adaptable than industrial robots but a parallel to the fate of the horse must be considered as a possibility.
Increased robot density has not correspondingly resulted in increased employment among any group of workers, even those with university educations, though automation should yield savings to both manufacturers and consumers which could then be spent on other goods or services; labor liberated by technology should gravitate toward tasks and jobs in which humans retain an advantage.
Instead, automation has resulted in a reduction of human wages necessitating some reallocation of workers. Each additional industrial robot per thousand workers has reduced wages across the economy by 0.5 percent. Real wage growth in many rich economies has been disappointing for much of the past two decades. An overwhelming share of the growth in employment in rich economies over the past few decades has been in services, nearly half in low-paying fields like retail and hospitality. Employment in such areas has been able to grow, in part, because of an abundance of cheap labor.
Low pay leads to policies that complicate labor-market adjustment. Instead of eliminating excess labor, wealthy economies provide some social support: unemployment benefits, social security or disability payments, and assistance with housing and food.
The growing demise of middle-skill jobs could cause employment polarization where lower paid workers serve the more affluent without any opportunity for upward mobility. As technology continues to pervade every aspect of human life, change, both within us and around us, will remain the only constant.
Two-thirds of Americans believe it likely that in 50 years robots and computers will do much of the work currently done by humans. Despite their expectations that technology will encroach on human employment in general, most workers believe their own jobs or professions will still exist throughout that 50-year period. Only 10 percent of workers fear the possibility of losing their current jobs due to workforce automation; competition from lower-paid human workers and broader industry trends pose a more immediate concern.
Education, training, and research will be key to future economic well-being. For those unable to complete the increasingly difficult academic challenges, alternatives such as infrastructure maintenance and improvement provide potential employment alternatives. It is highly doubtful that a permanently unemployed social class would ever be tolerated by the U.S. electorate so suitable available alternatives will be increasingly necessary as automation and computerization progressively eliminate many current employment opportunities.
Though an increase in immigration is usually not considered beneficial to employment opportunities, immigrants historically have created a disproportionate percentage of new companies and corresponding employment with either no effect or an increase in native-born wages or opportunities. U.S. immigration is slow, complex, inefficient, and highly bureaucratic but relatively simple steps still could be taken including elimination of the annual cap on H1-B visas, automatically providing H1-B visas to all foreign students receiving an advanced degree, and offering a special “startup visa” category for any potential immigrant entrepreneurs who provide verification of venture capital funding.
There isn’t any mystery to the recommended course of action to respond to increasing computerization and automation. The correct response is stated in almost all ECON-101 textbooks – politicians just need to go back to school rather than blindly attempting to enact measures based on political ideology rather than well-proven facts. If they would like some recommendations for basic economics texts:
Mankiw, Greg. Principles of Economics (conservative)
Samuelson, Paul. Economics: An Introduction to Analysis (liberal)
Commonly advocated recommendations for responding to these threats do not change regardless of whether the economist is a conservative or a liberal. Problematically, regardless of party affiliation, politicians typically reject proven advice preferring either the simplest solution or to ignore it and hope it goes away. But that no longer is sufficient.
There is much that can be done. The best response is to provide free higher educational access, at least through the Bachelor’s degree level or alternatively at community colleges to obtain program certification or vocational training for those not otherwise admitted to college programs.
Infrastructure upgrades to our nation’s roads, bridges, tunnels, electrical grid (renewable energy), water and sewer, railways, air transport, waterways… would provide significant positive long-term fiscal benefits to both federal or state governments. Improved infrastructures result in rapid overall productivity growth and a stabilization (or even reversal) of the recent large rise in income inequality. Establishment of a National Infrastructure Bank would enable greater private sector co-investment in infrastructure projects and also allow for the rigorous analysis required to direct support to projects with both the greatest returns to society and the long-run economic benefits that can justify up-front investments. Additionally, infrastructure projects provide employment opportunities for those not able to qualify for higher education or vocational training.
Basic research is the seed corn of future innovation. Support for science and engineering research needs to be increased as this will be the primary source of tomorrow’s jobs. Economists have agreed for decades that spending on science is one of the best ways to generate jobs and is a major component of modern economic growth. Basic and applied R&D that the private sector is unlikely to sufficiently support requires sustained direct funding by the Federal Government to create a knowledge base of potentially transformative ideas that are the critical building blocks of innovation. Federally funded academic R&D is instrumental in creating and sustaining a world-class higher education system that prepares the next generation of U.S. scientists and engineers. It also is a primary means of attracting and training high-ability international students, researchers, and faculty.
Business startup assistance is necessary as new and small businesses employ a disproportionate number of employees compared to large established corporations but they require regulatory simplification and deregulation. The main goal of commercial development is improving the economic wellbeing of communities through efforts that entail job creation, job retention, tax base enhancements, and quality of life. Business incubators help new and startup companies to develop by providing services such as management training or office space.
Low-interest loans are necessary to help businesses purchase land, refurbish buildings, and obtain new equipment. Bond programs help lower the cost of borrowing for a business; interest on a bond is much lower than on traditional bank loans. Tax credits and increased use of preferential zoning is essential to encourage/discourage desirable and undesirable business expansion and retention. Low-cost workforce training provided for businesses and industries enabling them to remain competitive can be provided through a variety of county or state programs. Business cluster group strategies are increasingly also used to assist business retention and expansion by sharing concerns such as infrastructure, zoning, and quality of life enabling a more powerful voice to be heard influencing business climate improvement. One-stop permitting centers enable businesses to quickly begin or expand operations.
A formal means of facilitating prospective employee/job position matching should be created. Currently many seeking employment rely on word-of-mouth referrals but a local, national, and even global job opportunity database would be beneficial along with local job fairs and counselors providing search assistance.
Whether fully accepted or not, the U.S. is transitioning to a post-industrial economy. Without proper planning and foresight, the process could be unnecessarily traumatic. The opportunities it presents are extensive but will require social change and investment if its potential is to be fully realized.
That’s what I think, what about you?
 Rodney Allen Brooks is an Australian roboticist, Fellow of the Australian Academy of Science, author, and robotics entrepreneur most known for popularizing the actionist approach to robotics.
 Will Robots Displace Humans As Motorised Vehicles Ousted Horses?, The Economist, http://www.economist.com/news/business-and-finance/21719761-probably-not-humans-have-lot-learn-equine-experience-will-robots?cid1=cust/ednew/n/bl/n/20170330n/owned/n/n/nwl/n/n/na/19950/n, 1 April 2017.
 Smith, Aaron. Public Predictions for the Future of Workforce Automation, Pew Research Center, http://www.pewinternet.org/2016/03/10/public-predictions-for-the-future-of-workforce-automation/, 10 March 2016.