After the Robots Take Over, What’s Left for the Rest of Us?

Earlier this year, the World Economic Forum meeting in Davos, Switzerland, released a report titled “The Fourth Industrial Revolution,” in which it found that automation and robotics would cut 5.1 million jobs currently performed by humans by 2020. Last year, researchers at Oxford University painted an even more dire picture, predicting that nearly half of U.S. jobs would disappear by 2030.

As Billshark discussed in a blog post a few months ago, robots are coming for many jobs that, in the past, provided at least an entry-level living, if not a life-time way to support one’s family. Everything from typist to truck driver to pizza maker is under attack from the tech revolution.

And of course, it’s futile to try to stand athwart history and say, “Stop!” It would be as useful to try to stand on a beach and command a halt to a tidal wave. This realization, however, doesn’t help the millions displaced by the robots and computers who have taken their jobs, which never demand days off or sick leave or health care.

Some jobs, of course, will never be replaced by automation, because they require the human touch: doctors and nurses, caregivers, masseuses, barbers/hairdressers, painters, plumbers, electricians, car repair, and, of course, computer repair and maintenance. No robot will ever be able to perform these tasks with the precision of human hands.

What this means is the death of the middle class. In the future, there will be two classes of jobs: the super-educated workers and the low-paid laborers. Even so-called STEM jobs (science, technology, engineering and mathematics) aren’t immune, because computers can think billions of times faster than humans. STEM workers will still be required to coordinate and analyze the information received and feed data into the electronic brains, but again, these are highly specialized jobs, not necessarily available to the average American, especially given the soaring costs of a college education.

We’ve heard quite a bit recently about jobs going begging because employers supposedly can’t find workers with the skills required to perform the jobs they have available. In days past, many employers didn’t depend on schools or the government to train their workers for them, but actually provided on-the-job training (OJT). They hired employees with the right mindset and work ethic and taught them how to do the jobs at hand. Now they apparently expect that prospective employees will either enter job retraining programs funded by the government, or pay their own tuition to learn the required skills before applying for their jobs.

One other job that can’t be replicated by automation is entrepreneur, but that presupposes that every person has the skills and ability and sheer luck to make a living this way, given that statistics show that four out of five new businesses fail within the first five years.

All this has incredible implications for the future of the economy. If the average worker can’t make enough to buy a house, what happens to the housing economy, for example? Think realtors, loan originators, movers, etc. In turn, if these people can no longer make a living, they then put other people out of work from whom they would have made purchases. It becomes a death spiral that will make the Great Recession seem like a day at the beach. Along with globalization and the near-demise of labor unions, the average person is left scrabbling to cobble together enough income to survive, usually through short-term, low-paying gigs, which also lack any of the traditional benefits that come with steady employment.

One solution that has been floated in recent years is the concept of a universal basic income (UBI). The financing mechanism has been debated, with some calling on taxes on corporations and the wealthy to fund it, while others have called for replacing various safety net programs with a UBI, but more and more the concept seems inevitable.

An idea that goes back as far as Thomas Paine in 1792, recently such notable Silicon Valley moguls as Mark Zuckerberg and Elon Musk have said that a UBI will be necessary in the future, for all the reasons outlined here. “I don’t think we’re going to have a choice,” Musk told CNBC in November of last year.

A UBI would provide each citizen enough money each month to cover their basic needs: food, housing, clothes. As a recent editorial in the Los Angeles Times pointed out, once workers didn’t have to scramble to meet basic needs, they could pursue higher technical training, indulge in entrepreneurial ventures that they can’t afford to pursue now, and have more time for children and caregiving. “By putting more money into the pockets of workers,” the paper said, “a UBI could fuel aggregate demand and job growth in different sectors across the country.”

At this point, it appears there may not be much choice. As always, Billshark will continue to keep you abreast of developments in this area.

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