Robots & Job Terminations

terminatorJob Terminators?

There is a virtual barrage of reports warning that robots and automation could displace 40% to  50% of the workforce in the next few decades.

During the almost 300 years of the growth age, new jobs have emerged to take the place of those replaced by automation.  Will this continue, or as many suggest, will it be different this time?

This post Reviews:

  • How have new jobs emerged in the past and will this continue?
  • Is it really different this time?
  • Will new jobs automatically emerge to replace those ‘terminated’ by automation.
  • What other alternatives are there?

How have new jobs emerged in the past?

It is worth reviewing how new jobs society has coped in the with the automation and job displacement.  I have read through previous analysis such that presented here. Most reports cover thoroughly what new jobs have been created, but give real analysis on the mechanism that creates the new jobs.  As there are several factors, and testing theories is problematic, listing possible reasons is more appropriate than choosing which factor makes the difference.  Factors of note include:

  • most technology development happened during the growth age, a time when the societies making the technological advances were going through rapid population growth, and were forming empires and expanding into a whole new world.
  • the societies experiencing the change to new technology were also experiencing significant income growth for most of the population and experienced the emergence of the middle class
  • Technology has previously had no ‘intelligence’, and has therefore been limited to replacing mundane repetitive tasks, and still needed people to supervise and play a role

So far, the experience from the industrial or ‘growth age’ has been a link between increasing prosperity and the creating of new jobs providing a replacement of jobs replaced by technology.   Technology itself has provided some of the growth, but the expansion of Europe to the ‘new world’ with the associated population growth also may have played a significant role.

Is it Really Different this time?

Only time will tell if the result is different, but certainly the circumstances are different. Consider:

  • Population growth has slowed significantly
  • There is no simple repetition of the emergence of the middle class.
  • There are no ‘new lands’ creating expansion of ‘civilisation’ into new areas.  (There is no place to grow a new USA )
  • Developed countries already have an established ‘middle class’ and economic development is currently no longer providing a huge lift in living standards for the majority of the population
  • Technology now has intelligence and can now replace even doctors and lawyers and highly skilled professions.

Yes, it clearly is different!

Will new jobs Automatically emerge to replace those terminated by automation?

Opinions as to whether the above differences will mean that jobs are no longer created automatically vary.  The world economic forum has reports (summary here) suggests that job creation cannot keep pace.   I suggest the end of the expansion of the growth age does mean that new job creation will no longer be automatic.   The world economy has not recovered from the conditions that lead to the GFC, and I suggest will not recover without changes to the economic system.  This is the environment for this new wave of automation:  an economy already unable to deal with fundamental changes.   In these conditions, active steps will be needed to create the new jobs.

What Other alternatives are there.

Technology means the work will still be done and the wealth still created.  But we also rely on jobs for wealth distribution and personal fulfilment.   Suggestions such as a basic income help with wealth distribution but potentially create significant social problems from lack of self esteem.   The major problem to these schemes is the free trade pressures may simply make such measures impossible.

The only solutions involve more troubling isolationism and will be discussed in a future post.

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