Monday, March 10, 2014

Automation, with charts!

Step back a minute. Way back. What precisely is the purpose of technological innovation? Why do we want to make things faster, smarter, better, healthier, new? To get rich? OK: to generate wealth, and ultimately, eliminate scarcity. The endgame, where we’re going as a species if we don’t screw up badly and destroy ourselves or burn out all our resources before we get there, is some kind of post-scarcity society.

Will people have jobs in a post-scarcity society? No. That’s what post-scarcity means. They’ll have things to do, authorities, responsibilities, ambitions, callings, etc., but not jobs as we understand them. So if the endgame is a world without jobs, how will we get there? All at once? No: by a slow and inexorable decline of the total number of jobs. Today’s America is just at the edge, the very beginning, of that decline.

Trouble is, America, more than any other nation, is built around the notion that all able-bodied adults should have jobs. That’s going to be a big problem.

Paul Kedrosky recently wrote a terrific essay about what I call cultural technical debt, i.e. “organizations or technologies that persist, largely for historical reasons, not because they remain the best solution to the problem for which they were created. They are often obstacles to much better solutions.” Well, the notion that ‘jobs are how the rewards of our society are distributed, and every decent human being should have a job’ is becoming cultural technical debt.

If it’s not solved, then in the coming decades you can expect a self-perpetuating privileged elite to accrue more and more of the wealth generated by software and robots, telling themselves that they’re carrying the entire world on their backs, Ayn Rand heroes come to life, while all the lazy jobless “takers” live off the fruits of their labor. Meanwhile, as the unemployed masses grow ever more frustrated and resentful, the Occupy protests will be a mere candle flame next to the conflagrations to come. It’s hard to see how that turns into a post-scarcity society. Something big will need to change.
America Has Hit “Peak Jobs” (TechCrunch)
–There’s newer research suggesting that the demand for skilled workers has actually decelerated in recent years. Beaudry, Green, and Sand present an exhaustive and rigorous statistical analysis of skill demands over the last three decades. They look at tasks, jobs, and earnings, and find that the demand for skilled workers “underwent a reversal” around 2000. The growth in the share of high-skill, high “cognition” (using Autor’s tasks framework), and high-wage occupations stagnated in the 2000s, where the share of college grads kept growing. “That means,” as Green told me, “that the probability that a newly graduating BA will get one of these jobs is declining sharply.” And as more highly skilled workers are displaced, they moved down the job scale, hurting the job prospects of less-skilled workers who now have to compete with those “…displaced from cognitive occupations.”
A Bit More on Technology, Jobs, and Wages (Jared Bernstein) Related: College Grads Taking Low-Wage Jobs Displace Less Educated (Bloomberg) Downward mobility.

But there are two catches. Here's the first. Healthcare spending is growing slower than the economy for the first time since 1997, and "nobody knows why," as Matt O'Brien reported for The Atlantic. And the slowdown in growth is affecting workers, too. Healthcare jobs apparently fell in December for the first time in at least 27 years. Fresh out of the oven, BLS's healthcare employment projections might already be deflating.

Here's the second catch. A new paper by Carl Benedikt Frey and Michael A. Osborne calculated the odds of "computerization" for the 600+ jobs that the BLS tracks. They range from 96% automatable (office secretaries) to 0.9% (registered nurses). Here are the ten fastest-growing jobs and the odds that robots and software eat them:

1) Personal care aides: 74%
2) Registered nurses: 0.9%
3) Retail salespersons: 92%
4) Combined food prep & serving workers: 92%
5) Home health aides: 39%
6) Physician assistant: 9%
7) Secretaries and admin assistants: 96%
8) Customer service representatives: 55%
9) Janitors and cleaners: 66%
10) Construction workers: 71%

These ten occupations account for 3.85 million projected jobs in the next ten years, or 25 percent of the decade's projected job haul. And six of them are at least two-thirds automatable, based on researchers' projections of current computing power. For example, secretaries and administrative assistants are already being complemented or replaced by simple office organization software, and Walmart and Amazon pose a mortal threat to many classic retail jobs, even before you account for Kiva robots patrolling warehouse floors around the country.
The Fastest-Growing Jobs of This Decade (and the Robots That Will Steal Them) (The Atlantic)
There will be work. But who will do it? Note that most of those jobs are terrible. Construction worker would be my choice; I wouldn't last a day as a nurse, home health aide, or physician's assistant.
    The information age has coincided with – and must, to some extent, have caused – adverse economic trends: stagnation of median real incomes; rising inequality of labour income and of the distribution of income between labour and capital; and growing long-term unemployment.

    Among the explanations are: fast-rising productivity in manufacturing; skills-biased technical change; the rise of global winners-take-all markets; and the role of rental income, particularly from intellectual property. Think of the difference between the cost of developing Google’s search algorithm and its value. Globalisation and financial liberalisation are also at work, both also boosted by new technologies.

    Above all, insists the book, this is just the beginning. Much routine brain-work will be computerised, as happened to clerical skills. Middle-income jobs could hollow out far further. The outcome could be still more polarised incomes, with a tiny group of winners at the top and a vastly larger group struggling below. In 2012, for example, the top 1 per cent of Americans earned 22 per cent of all incomes, more than double their share in the 1980s.

    There are good reasons why people should be disturbed by this. First, the lives of those at the bottom might get worse: the authors note that the life expectancy of an American white woman without a high school diploma fell five years between 1990 and 2008. Second, if income becomes too unequal, opportunities for young people dwindle. Third, the wealthy become indifferent to the fate of the rest. Finally, a vast inequality of power emerges, making a mockery of the ideal of democratic citizenship.
Martin Wolf Sounds Cautionary Note on Rise of Robots (Naked Capitalism)

What Jobs Will Robots Take? (Naked Capitalism)

Will the 2nd Great Machine Age be a frightening jobless dystopia? (Telegraph) For a rather weak tea optimistic counter, see Will robots steal our jobs? The humble loom suggests not. (Washington Post) If you need to go back to a time when the steam engine was a novelty to make your case, I don't think you have much of one.

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