Employment and Robots

By on August 22nd, 2013 in Ethics, Societal Impact, Topics

A delightful quote in the Aug. 19 Wall St Journal letters responding to the increased versitility and use of robots, the author (Channing Wagg) quotes Walter Reuther, then Head of the United Autoworkers union in as follows:  “One of the management people {during a 1950’s tour of a Ford Plant} with a slightly gleeful tone in his voice said to me ‘how are you going to collect union dues from all these machines?’  And I replied, ‘You know, that is now what’s bothering me. I’m troubled by the problem of how to sell automobiles to these machines.'”  

Also today we have an NPR OnPoint discussion on the ‘Changing American Dream‘. The issue here is the lack of jobs for our recent graduates — of college or high school, and how it is affecting the expectations of todays young folks.   In many ways this is a response to the question I raised in an April posting here, “do you expect to be satisfied with our future?”  As pointed out there, Al Gore in his recent book “The Future” suggests that there may not be enough jobs to provide “full employment” for the work force world wide.  Also this week was a posting by Robert Reich, on “Why the Anger?” Where he asserts “The last time America was this bitterly divided was in the 1920s, which was the last time income, wealth, and power were this concentrated.

Let me state that a different way.   Over the last few years, the US Stock Market has been a bull on steroids. Driven by growing corporate revenues and profits.  The one percent has been getting richer, and even us retired folks with 401k accounts have been benefiting.  However job recovery has been weak.  Why?  Productivity.  Specifically increased productivity that allows for growing production with fewer employees.  Salaries have not gone up to match that, which means greater corporate pay, bonuses, stock dividends, etc.

A thought experiment:

What if we double productivity next week — world wide?  This means twice as much of everything at no increase in cost.  Here are a bunch of possible outcomes:

  1. We double the pay for everyone, but risk having over supply of many items
  2. We cut work hours by 1/2 and double the pay for workers – now folks earn the same amount (for the same level of output), and we do not have oversupply
  3. We lay off 1/2 our workers, and double the dividends, bonuses and higher level salaries — now we do not have over supply, and the disparity that Reich observes increases significantly.
  4. Other suggestions are welcome …

This is effectively what we have done over  the last few decade or two.  Expanding markets in China, India, et al have absorbed much of the potential surplus, and will continue to do so for a while (other resources such as power and natural materials assumed). So far we seem to have followed along the line of option 3 when a sufficient market was not available.

If we continue to increase productivity, decrease employment we eventually hit Gore’s ‘Future’ boundary, where our available “person-hours”  significantly exceeds paid employment hours needed.  Which aggravates Reich’s situation of increased angry populations. (Wars have proven to be an effective way to reduce the number of unemployed young persons. Revolutions are another option. Democracy may yield other forms of significant transformation — consider 30 hour work weeks, mandatory age 50 retirement along with the social safety nets to make these viable — i.e. taxes.)

We are the technologists.  Productivity is our mantra.  Quality of life is our purpose. But there is a tipping point here.  We may have passed it in some areas already — and that may be why our new graduates are having a problem finding work.   I’m not an advocate for trying to stop the technology momentum. But, we better start taking a realistic look at where this future is going in social terms.  I do not think the current U.S. model of 4% unemployment, 40 Hour work weeks, and increasing salary/income disparity is viable for the long term.  It is also the case that for-profit corporations cannot address this — oddly it violates their responsibility of acting in the interests of their shareholders.  The “market” cannot address this either since the direction we are going cannot be used to grow jobs or or decrease prices.  (Those with market models to suggest are encouraged to provide visions of how the market might work here.)