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Thursday, April 27, 2017

Why No Job Is Safe

Pretty much all commentators are agreed: automation is going to eat a lot of jobs in the coming two decades. Between 38% and 50% of all jobs in the US will be automated by 2050. Mark Cuban  insists that social and creative jobs are safe. He's wrong.

By the very definition of IQ, the average is 100. 68% of the population fall within the gray area above. The simplest jobs are the easiest to automate. The simplest jobs are also held by the people with the lowest IQ.

If 38% of the jobs get automated, most of the automated jobs will be stripped from the population to the left of the center line. The jobs to the right of the center line are held by more intelligent people, those jobs are more complicated. Finding people to do complicated jobs is hard, which is why jobs to the right of the center line generally pay more. But some of the jobs to the right of the line will also be automated. For instance, anesthesiology is generally considered a pretty hard job, rather complicated, definitely a high-IQ position, but it also turns out that we have computers which are able to do that job very, very well.

So, the people to the left of the center line will lose their jobs first. The ones to the extreme left will be rendered unemployable. Even if we can train them for a job that is a little more complicated than the one they currently hold, nearly all the jobs on the left will be taken by robots. That is, we would only be able to retrain them for a slightly more complicated job that has ALSO been automated. They can't be moved far enough up the curve to get any of the non-automated jobs.

But, as we move to the right on the curve, the job situation changes. The closer we get to the center-line, the less likely it is that the next higher job will be automated. Worse, the closer we get to the center-line, the larger is the population that could, theoretically, be retrained for the slightly more complicated jobs that remain non-automated. And, keep in mind that many of the jobs on the right, even jobs on the extreme right, can be automated.

You can immediately see the problem. Everyone who has even a small shot at getting a non-automated job will be forced up the conga line to that next available job. Positions that the marginally qualified would, in the past, have ignored as not worth the extra effort will now become the only game they have left in town.

Every remaining job position will be sought after. This will drive wages down across the board. The wages associated with even non-automated positions will be driven into the dirt as everyone re-trains to try to snag one of the remaining places left in the job market.

This has already begun. I have already heard anecdotal stories of 2016 companies re-posting job descriptions that were originally written in 1996, complete with the original 1996 salary. And they fill those positions with that 20-year old salary cap because there is nothing else for job-seekers to do.

People, like Mark Cuban, assert that some industries will weather the automation storm better than others. That is literally impossible. Automation will batter and destroy EVERY nook and cranny of the job market. It will drive EVERYONE'S wages into the dirt. Even if the job is impossible to automate, the wage will drop to pennies on the current dollar, if only because everyone will be retraining and competing to get it.

On the bright side, automation will make superior products, and it will make them much more cheaply. On the down side, fewer and fewer people will have work wages to buy the products. They will have to get their incomes from something else.

Arguing that people will be able to pursue their dreams doesn't help. They may be able to do so, but it won't pay them when they do. Art, creativity, it won't matter what it is, nothing a human being can produce will be worth as much, if only because EVERY human being will be forced to at least attempt to engage in the non-automated activities that remain. The "nearly-good-enough" will drive down the value of the awe-inspiring perfect work of art, if only because there will be so many more "nearly-good-enough" pieces to choose from, and so much less money flowing in from wages, making the "perfect" unaffordable for nearly everyone at current prices.

Human beings have dealt with the problem of scarcity for our entire history. We are good at it, we have a system (capitalism) that is about to whip the scarcity problem permanently.

We have virtually no experience with the problem of perpetual surplus. That is where we are headed, and we have no system for dealing with it. Like the dog that chases the car, we have been chasing perpetual surplus for our entire existence. What happens when the dog catches the car? We don't know.

1 comment:

Olivier Glowacz said...

Interesting post.

I think the most important observation here is that the mankind has had plenty of experience with scarcity, but very little with surplus. I would take this a step further: traditional morality (including Catholic morality) presumes scarcity, which is why in such a moral system discipline, respect for authority, and hard work are seen as virtues, whilst lasciviousness, gluttony, and laziness are seen as vices. Suffering is accepted as inevitable, delayed gratification is promoted, and instant gratification is shunned. Contemporary morality (which presupposes a surplus) flips that around on its head: suffering is something that can and should be eliminated, instant gratification is promoted, delayed gratification is shunned. People must have all their needs fulfilled as a moral imperative otherwise they are being oppressed or repressed. Unsurprisingly the Catholic Church's traditional teachings are rendered completely irrelevant under such a state of affairs.

As to the problem of loosing jobs to machines: the rate at which this will happen is unclear at the moment. Whether or not we will ever reach a "singularity" of the Kurzwelian variety in which computers will match and then surpass the cognitive abilities of humans remains very much an open question (especially since Moore's Law is quickly loosing steam at this point). However, what is clear is that many jobs (particularly blue-collar jobs) will almost certainly be lost to robots in the near future (5-20 years), and so in the short term unemployment will rise and wages will be depressed. But is a mistake to think that in the long run automation will make production cheaper, faster, and more efficient, while at the same time leaving people worse off. Rather, what will probably happen will be a transition away from Capitalism and towards Communism in the original Marxian sense: an automated society that runs on government handouts and in which people can do whatever suits their fancy. If you do some research on UBI (Universal Basic Income) you will see that this concept is gaining popularity very rapidly, and it foreshadows the kind of future we are heading toward.

This is not going to be a bright future. It sounds utopian, but it will be a dystopia. A society of adult children running to and from without so much as an inkling of what their purpose in life is, satisfying their every urge and fancy, without any higher obligations or strivings cannot last for long (cf. Prof. John B. Calhoun's mouse utopia:, and if it does then it will be (ironically enough) a world beneath the "dignity of man" to live in.