Automation and the Future of Work: The Robots are Coming
US President Donald Trump wants to preserve 80,000 US coal mining jobs, and bring overseas jobs back to America. But are his concerns misplaced? As a New York Times editorial recently argued, in the long term, most jobs will be lost to automation, not lower priced foreign labour.
The Robots are Coming
Automation is coming, and in a big way. Driverless cars are coming first. And when they do, the job losses won’t be in the tens of thousands of jobs, but in the millions. In the United States alone, 2.9 million long-haul truckers and delivery drivers, 674,000 bus drivers, and 181,000 cab drivers could be lost to driverless vehicles.
If that sounds fart-fetched, know that In Canada, we’re already testing fully automated hauling systems in the oil sands . Thanks to these new vehicles, operations can continue 24 hours a day. These giant trucks don’t complain about excessive hours, don’t abuse drugs and alcohol, and don’t make mistakes due to fatigue. Mining company Rio Tinto has been using these driverless trucks for over two years, and reports that each truck saves at least 500 worker hours each year.
A recent article from the CBC projects 42% of Canadian jobs could be lost to robots in the next 10-20 years. The common response to this information is either denial or anger. People believe automation won’t happen in their lifetimes, and if they do, they think they can stop it.
But realistically, it can’t be stopped.
What can we do?
To be clear, I’m not denying that some technological changes are troubling. But worrying about it is unproductive, as these changes are inevitable.
However, while we cannot stop the march of technology, we can help shape it.
As a species, we have experienced more concrete improvements since the industrial revolution than we did in the first 200,000 years of our existence. It’s somewhat stunning how rapidly we have changed. It’s rather remarkable how little innovation happened during that first 200,000 years. As an historian, I’ve always marvelled at the speed with which we transitioned from horse and buggies to iphones.
How did that happen? For the majority of our existence, human beings have been engaged in attending to our most basic needs. Finding food and shelter has preoccupied humanity for eons. It wasn’t really until significant changes in productivity occurred that we had the free time to pursue additional progress. Innovation begets innovation, and at a compounding rate.
Ludditism doesn’t work
In the 19th century, the industrial revolution changed textile manufacture forever. Looms spelled the death of many craftspeople, and they could see the changes coming. Many did not choose to go quietly. They joined hands, smashing looms and burning factories. Unfortunately for them, their activism accomplished little (if anything). The weaving mills enjoyed such tremendous productivity gains that they just rebuilt. And even socialists like William Morris realized hiring small craftspeople was impractical and only affordable for the very wealthy.
And while modern Luddites continue to decry technological change, even most Luddites no longer subscribe to the Luddite fallacy (even if they think they do).
The Luddite Fallacy
Economists have traditionally scoffed at Luddites’ belief that technology can cause widespread unemployment. They argue that any technological progress will cause a drop in prices that will increase demand, ultimately increasing employment as a result.
For most of history, this has been largely true.
But it’s only fair to acknowledge that automation presents a unique challenge to classical economics.
Regardless of how much demand is eventually created by a drop in prices, the dramatic job loss cannot be absorbed quickly enough to stave off mass action. A sufficient quantity of underemployed people is never good for social stability, and unless we want a revolution on our hands, something must be done, and quickly.
Automation is a game-changer, but it doesn’t have to spell game over.
If all this sounds a little depressing, it doesn’t have to be. There is an answer to the predicament we find ourselves in: Universal Basic Income.
You can call it whatever you want – negative income tax (Milton Friedman’s favourite term for the concept, and yes, he supported the idea of an income “floor”), redistribution of wealth, basic income – but it has gone from being a Utopian ideal to a necessity.
Basic income (together with Universal, single payer healthcare) are the foundations of the new automated economy. There’s a reason why Canadians pay half as much for healthcare as Americans. Rather than a bloated private network of overpriced insurance companies colluding to raise prices, Canada actually relies on a much simpler system, where taxation directly supports a single healthcare system. This could be further simplified by nationalizing healthcare – Canada still allows each province to administer its own healthcare plan, which results in numerous inefficiencies.
Basic income eliminates even more useless bureaucracy. Welfare, the majority of tax deductions and unemployment programmes are suddenly obsolete. Ideally, a living basic income would be given to every man, woman and child, with any extra money coming from salaried work.
Of course, all additional income would need to be taxed heavily, but earnings from automated industries would be so great that there would still be a powerful profit motive. If anything, further automation would be encouraged as a way to earn even higher profits.