Lately the news is flooded with a few consistent overarching issues when it comes to the labor market. An often cited issue is the higher than desired unemployment numbers, high labor participation dropout rates, and the push to increase the minimum wage across the US. The recent recession played a heavy role in the loss of jobs, but what is keeping them from coming back?
Ever since the dawn of the Industrial Revolution there has been a question of how well humans can compete against machines. The mechanization of the early days often made people fear that they would no longer be able to keep up. On the surface this fear is well placed. After all, something that previously may have taken a group of workers weeks or months to complete was now doable in a few days by a single worker. Although the fear was well placed this doomsday view never came to fruition. There never was a tempering in the demand for human labor, even as human population grew exponentially. The biggest shift became an overarching demand for skilled human labor. The machine could do a lot to empower the worker, but it couldn’t replace him.
I have felt for years that the modern revolution is vastly different from the dawn of the Industrial Revolution. Not only are the machines finally capable of replacing a large share of workers, but that the workers will find it impossible to keep pace. The machine no longer needs to be driven by an operator at all times and increasingly can drive itself. This creates a fundamental problem for capitalistic societies where workers are another raw material like any other.
The big challenge as automation comes to dominate the workforce is how do we adjust our definition of work and where people fit. In an increasingly automated world we no longer have a need for an increasing share of the population in an economically productive manner. As the cost of labor increases, via methods like increased minimum wages and other means, the push to automate will continue to increase. How do we approach a future where the worker not only has to compete with labor in various places around the world, but also with automation.
I feel the most important push against the machines is to ensure that future labor force participants are equipped to offer value where machines currently can’t (information transformation aka decisions). Our current method of education focuses heavily on memorization and repetition as it has for the last few hundred years. Humans have already lost the battle of calculation speed and information retrieval to machines. There is little value in being able to recite the encyclopedia when it can be queried by the average person in seconds.
Students will need to be trained how to transform information into something of value. How to derive meaning from the information presented to them while leveraging the power of computing to work on ever larger data sets in ever more creative ways. We need to end the teaching of rote memorization and teach critical thinking on a deep and expansive level to give future workers a fair chance.
Automation is so attractive because of the structure of our economic and tax systems. Our current system is structured with the understanding that lower taxes on businesses and the wealthy leads to increased job creation and a larger pool of employed persons. Without automation some of this may prove to be factual (although I’m not convinced it is factual). With extremely low taxes business is given a strong incentive to automate and to employ as few people as possible. Business can afford the enormous cost of automation while reaping the benefits of lower expenses (both in saved labor costs and a lower tax burden).
We need to reevaluate the basic structure of our tax system. A solidifying of safety nets for workers would be a basic start. Corporations should be taxed at a higher rate and workers should be given certain protections. It should be very cheap, or free, for workers to retrain to keep their skills in demand. The burden of education should also be lowered. A worker education insurance program similar to unemployment insurance should exist to assist workers with education and living cost to enable transition.
We need to reassess our understanding of work in a future where people are becoming increasingly obsolete. Certain lines of work will be primarily human for the foreseeable future, such as Barbers and Lawyers, but many lines are increasingly being replaced by better and better machines. Automation eats at the workforce from the bottom up putting most workers at risk eventually.
The most straightforward solution is to address education to refocus it toward the demands of the present. We can’t afford to focus education of our youth on the expectation that they will spend their lives working in the same profession. We have to ensure that workers can adjust from one field that is no longer needed to new fields that are in demand with the lowest burden possible. This should be paid for by the business community as a trade-off for increased automation. Ultimately, we have to ensure that business can’t externalize the cost of human labor back onto society.