Saturday, August 31, 2013

Reconciling Robots and Technology vs Jobs

Robots and technology have allowed us to hugely increase productivity in this country since our founding. Humans digging ditches with pickaxes and shovels have given way- for the most part, with really cool ditch diggers and mechanized shovels... you have seen these cool tools in every corner of America.

Now nobody misses not getting to dig ditches. It is hard on human backs, feet... all I can say is... ouch! We are all better off.

Throughout the 20th and 21st century technology has built on itself to develop ever more labor saving devices. Labor saving devices make us much richer as a country- we can produce so many more goods and services- but conversely labor saving devices save labor which puts people out of work.

This tradeoff was epitomized in a conversation between Walter Reuther the leader of the UAW in the 70's going through a Ford plant with a company manager. The manager teased Mr. Reuther about how was he going to collect union dues from all these robots... Mr. Reuther replied, " aren't you worried about how you are going to sell cars to these machines?

Great question and one I am willing to wrestle with.

How do we reconcile the huge increase in wealth in this country due to the ability of robots to do perfect work, 24 hours a day, never sick, never cranky, and the huge number of people put out of work.

Now robots cannot be blamed for the most recent financial disaster that shook the economy to its foundations in 2008, but it has very much to do with long term issues with people out of work and a huge portion of America not fully engaged in producing value and not doing the amount of consumption they would do if they were gainfully employed.

And we are seeing just the beginning of robots taking jobs from humans. Google is creating self driving cars. This means that soon there will be driver free delivery services where a person's app tells them their products are arriving at the front door and they go out to pick up what they are expecting. Now I look forward to this, but how many million delivery drivers are going to be looking for new work?

There is a big battle between minimum wage fast food workers in this country and the big chains. It should not shock you that McDs and other right now are picking up the pace on automated burger flipping. special sauce dispensing, and wrapping and... well you are going to see even fewer people in the local fast food outlet in the future.

Here is an interesting data point. I  got this from the Associated Press special report that I read in the Fresno Bee

Consider the great business successes of the Internet age: Apple employs 80,000 people worldwide; Google, 54,000; Facebook, 4,300. Combined, those three superstar companies employ less than a quarter of the 600,000 people General Motors had in the 1970s. And today, GM employs just 202,000 people, while making more cars than ever.

So we have this huge leakage of employed people from the economy. What are we going to do? Well, Americans like me and you are going to have to reconcile ourselves to a battle for the hearts and minds of people that the way things are going now is not working- and we need new thinking. We have the tools to deal with these issues. The problem exists in our mind and our fascination with the status quo and with the thinking that got us to this point.

Are we going to raise taxes on the companies that use robots? Taxes are overrated as a solution to better distribute wealth. We have other solutions to discuss and taxes are in the mix but not the main driver.

We have to create space for people to excel and develop their talents. We have to create opportunity. How do we do it? We spend the money of the Federal government. It is essential right now that you understand deficit spending. Our present attitudes about deficit spending are dangerous and debilitating- especially in light of the challenges before us. LINK

We need to support creativity and talent. We need to invest in infrastructure and deal with the great constraints we face- climate change, carbon free energy and a sustainable world.  We need to provide youth with opportunity to go to school, and opportunities to reinvent the world and how it works. We need a lot of investment. And we need to do some serious thinking. We can consider a long list of smart investments here. We have issues to deal with as serious as any national security issue we face. LINK

I leave you with a thought to consider. We have all seen the old Popular Science magazines talking about how computers are going to put us all on easy street... Well, easy street means not having a regular job. How do you get to easy street from here using technology? You go through a rocky stretch where some of the biggest problems are the inflexible minds of the people in charge to anticipate a new world and start working on the solutions to making it work for people.

Feel free to add your 2 cents below.



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