Rise of the Robots: Technology and the Threat of a Jobless Future (42 page)

This is dangerous because we are now so far along on the arc of information technology’s progress. We are getting onto the steep part
of the exponential curve. Things will move faster, and the future may arrive long before we are ready.

The decades-long struggle to adopt universal health coverage in the United States probably offers a pretty good preview of the staggering challenge we will face in attempting to bring about any kind of whole-scale economic reform. Nearly eighty years passed from the time Franklin Roosevelt first proposed a national health care system until the passage of the Affordable Care Act. In the case of health care, of course, America had as working examples the long-established systems of every other advanced nation in the world. But there are no examples of a working guaranteed income—or, for that matter, any other policy designed to adapt to the implications of future technology. We will have to make it up as we go along. Given this, it is surely not too soon to begin a meaningful discussion.

That discussion will have to delve into our fundamental assumptions about the role of labor in our economy and the way people respond to incentives. Everyone agrees that incentives are important, but there are good reasons to believe that our economic incentives could safely be moderated somewhat. This is true at both ends of the income spectrum. The premise that even modestly higher marginal tax rates on top incomes will somehow destroy the impetus for entrepreneurship and investment is simply unsupportable. The fact that both Apple and Microsoft were founded in the mid-1970s—a period when the top tax bracket stood at 70 percent—offers pretty good evidence that entrepreneurs don’t spend a lot of time worrying about top tax rates. Likewise, at the bottom, the motivation to work certainly matters, but in a country as wealthy as the United States, perhaps that incentive does not need to be so extreme as to elicit the specters of homelessness and destitution. Our fear that we will end up with too many people riding in the economic wagon, and too few pulling it, ought to be reassessed as machines prove increasingly capable of doing the pulling.

In May 2014, payroll employment in the United States finally returned to its pre-recession peak, bringing to an end an epic jobless recovery that spanned more than six years. Even as total employment recovered, however, there was general agreement that the quality of those jobs was significantly diminished. The crisis had wiped out millions of middle-class jobs, while the positions created over the course of the recovery were disproportionately in low-wage service industries. A great many were in fast food and retail occupations—areas that, as we have seen, seem very likely to eventually be impacted by advances in robotics and self-service automation. Both long-term unemployment and the number of people unable to find full-time work remain at elevated levels.

Lurking behind the headline employment figure was another number that carried with it an ominous warning for the future. In the years since the onset of the financial crisis, the population of working-age adults in the United States had increased by about 15 million people.
¹⁹
For all those millions of entrants into the workforce, the economy had created no new opportunities at all. As John Kennedy said, “To even stand still we have to move very fast.” That was possible in 1963. In our time, it may ultimately prove unachievable.

*
Keep in mind that many of those higher-skill jobs may also be threatened by offshoring.

*
The idea that both government and society must evolve with the times is echoed by another conservative icon. Here’s a quote from Thomas Jefferson, which is engraved into panel #4 of the Jefferson Memorial: “I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times. We might as well require a man to wear still the coat which fitted him when a boy as civilized society to remain ever under the regimen of their barbarous ancestors.”

*
What we call “the economy” is really the total value of all the goods and services produced and sold to someone. The economy can either produce enormous numbers of low and moderately priced goods and services, or a much smaller number of very high-value goods and services. The first scenario requires broad distribution of purchasing power; this is currently made possible by jobs. In the second scenario it is unclear what products and services the economy could produce that would be valued so highly by the wealthy elite. Whatever these high-priced goods were, they would need to be consumed voraciously by the lucky few—otherwise the economy would not grow at all: it would contract.

*
Obviously, I’m leaving aside those people who might choose to drop out of the workforce (at least temporarily) for reasons we would likely consider more legitimate, such as caring for children or other family members. For some families, for example, a basic income might turn out to be a partial solution to the looming elder-care problem.

*
Some economists, most notably former US Treasury secretary Larry Summers, have suggested that the economy is currently trapped in “secular stagnation”—a situation where interest rates are near zero, the economy is operating below its potential, and there is too little investment in more productive opportunities. I think a future where everyone is dependent almost entirely on his or her mutual fund balance for economic survival might well result in a similar outcome.

CONCLUSION

In the same month that the total number of jobs in the United States finally returned to pre-crisis levels, the US government released two reports that offer some perspective on the magnitude and complexity of the challenges we are likely to face in the coming decades. The first, which went almost completely unnoticed, was a brief analysis published by the Bureau of Labor Statistics. The report looked at how the total amount of work performed in the US private sector had changed over the course of fifteen years. Rather than simply counting jobs, the BLS delved into the actual number of hours worked.

In 1998, workers in the US business sector put in a total of 194 billion hours of labor. A decade and a half later, in 2013, the value of the goods and services produced by American businesses had grown by about $3.5 trillion after adjusting for inflation—a 42 percent increase in output. The total amount of human labor required to accomplish that was . . . 194 billion hours. Shawn Sprague, the BLS economist who prepared the report, noted that “this means that there was ultimately
no growth at all
in the number of hours worked over this 15-year period, despite the fact that the US population gained over 40 million people during that time, and despite the fact that there were thousands of new businesses established during that time.”
¹

News of the second report, which was released on May 6, 2014, was splashed across the front page of the
New York Times.
“The
National Climate Assessment,” a major interagency project supervised by a sixty-member panel that included representatives from the oil industry, declared that “climate change, once considered an issue for a distant future, has moved firmly into the present.”
²
The report noted that “summers are longer and hotter, and extended periods of unusual heat last longer than any living American has ever experienced.” The United States has already seen a dramatic increase in the frequency of torrential rains, often leading to flooding and widespread damage. The report projected a sea-level rise of between one and four feet by 2100 and noted that already “residents of some coastal cities see their streets flood more regularly during storms and high tides.” The market economy has begun to adjust to the reality of climate change; flood insurance is increasing in cost, or even becoming completely unavailable, in vulnerable areas.

Among techno-optimists, there is a tendency to discount concerns about climate change and environmental impact. Technology is viewed along a single dimension: it is a universally positive force whose exponential progress will almost surely rescue us from any dangers that lie ahead. Abundant clean energy will power our economy long before we expect it, and innovations in areas like the desalination of ocean water and more efficient recycling will arrive in time to head off any dramatically negative consequences. Some level of optimism is certainly justified. Solar power, in particular, has recently been subject to a Moore’s Law–like trend that is rapidly bringing costs down. Global installed photo-voltaic capacity has been doubling roughly every two and a half years.
³
The most extreme optimists think we will be able to get
all
our power from solar by the early 2030s.
⁴
Still, significant challenges remain; one problem is that, while the cost of solar panels themselves has been declining rapidly, other important costs—such as those of peripheral equipment and installation—have not, so far, been subject to the same rate of progress.

A more realistic view suggests that we will need to rely on a combination of both innovation and regulation if we are going to successfully mitigate and adapt to climate change. The story of the
future is not going to be about a simple contest between technology and environmental impact. It will be far more complicated than that. As we have seen, advancing information technology has a dark side of its own, and if it results in widespread unemployment or threatens the economic security of a large fraction of our population, the dangers posed by climate change will become politically even more difficult to address.

A 2013 survey by researchers at Yale and George Mason Universities found that about 63 percent of Americans believe climate change is happening, and that just over half are at least somewhat worried about its future implications.
⁵
A more recent survey by Gallup probably puts things in better perspective, however.
⁶
On a list of fifteen major concerns, climate change came in at number fourteen. First on the list was the economy, and for the vast majority of average people “the economy,” of course, really amounts to jobs and the wages they pay.

History shows clearly that when jobs are scarce, the fear of even more unemployment becomes a powerful tool in the hands of politicians and special interests who oppose action on the environment. This has been the case, for example, in those states where coal mining has historically been an important source of jobs, despite the fact that employment in the mining industry has been decimated not by environmental regulation but by mechanization. Corporations with even small numbers of jobs to offer routinely play states and cities against each other, seeking lower taxes, government subsidies, and freedom from regulation.

Beyond the United States and other advanced countries, the situation may be far more dangerous. As we’ve seen, factory jobs are disappearing across the globe at a rapid clip. Labor-intensive manufacturing as a path to prosperity may begin to evaporate for many developing nations even as more efficient farming techniques inevitably push people away from agricultural lifestyles. Many of these countries will see far more severe impacts from climate change and are already subject to significant environmental degradation. In the
worst-case scenario, a combination of widespread economic insecurity, drought, and rising food prices could eventually lead to social and political instability.

The greatest risk is that we could face a “perfect storm”—a situation where technological unemployment and environmental impact unfold roughly in parallel, reinforcing and perhaps even amplifying each other. If, however, we can fully leverage advancing technology as a solution—while recognizing and adapting to its implications for employment and the distribution of income—then the outcome is likely to be far more optimistic. Negotiating a path through these entangled forces and crafting a future that offers broad-based security and prosperity may prove to be the greatest challenge for our time.

ACKNOWLEDGMENTS

First and foremost, I would like to thank the entire team at Basic Books—and especially my extraordinary editor, T. J. Kelleher—for working with me to make this book a reality. My agent, Don Fehr of Trident Media, was instrumental in helping this project find its proper home at Basic Books.

I am also extremely grateful to the many readers of my earlier book,
The Lights in the Tunnel,
who wrote to me with suggestions and criticisms, as well as examples demonstrating how the relentless trend toward automation is unfolding in the real world. Many of these ideas and discussions helped to refine my thinking as I approached this book. In particular, I thank Abhas Gupta of Mohr Davidow Ventures, who pointed me to some of the specific examples cited in these pages and also offered many valuable suggestions after reading an early draft of the book.