Donald Trump is wrong. These four words can generally apply to anything the angry orange man in the White House opines on but he is especially, egregiously and dangerously wrong on jobs, writes Brian Lucey.
Neither China, nor Mexico, are the cause of the decline in the job prospects of the middle-American white man. Automation is the real job killer. Rather like the Luddites, Donald is raging against forces that have been unstoppable for all of human history. But at least he is, in his own inchoate way, generating a debate on the future of work. In Ireland we see precious little.
Automation, combined with artificial intelligence, is causing a massive upheaval in the labour market. This upheaval will not be confined simply to the middle-class Western world however. The World Bank has estimated that massive numbers of jobs in developing countries, 70% to 80%, may also be in the firing line of our new robot overlords. If this is the case, then we will find that the traditional path to development of countries such as Ethiopia and Myanmar may well cut off.
In the US, recent estimates suggest that up to 85% of jobs lost over the last decade can be attributed to technological change, to automation. On the potential for job losses from automation, research from McKinsey suggests that upwards of 40% of US-based workers should fear for their positions. And with each advance in robotics the robots advance to jobs and employment previously unthought of.
Throughout history, as technology advanced, persons whose employment was predicated on previous levels of technology have found themselves having to adapt or, in employment terms, die. Thus we have fewer people working in agriculture than ever before, and yet agriculture is, through technology, massively productive. The advent of automated streetlighting abolished the role of the lamplighter; there are few if any commercially employed telegraph key operators; who now can make a living as a wheelwright?
A key point is often overlooked. Hysteria around automation has it that historically, the advance of automation has created massive wealth and has resulted in the creation of more jobs than were lost in the process of disruption. This is of scant comfort to those whose jobs were lost.
But historically, these were jobs lost by people who did not matter, politically. For the first time in human history we are seeing a massive dislocation in employment along with the mass engagement of the population.
As automation and artificial intelligence grows so too will the range of jobs which are more profitably employed using human operators. Over the last couple of decades we have become used to more computerisation and automation in service industries, with self-service check-outs, self-service banking, and a whole range of automated processes related to the purchase and renewal of everyday services. What is now happening is areas heretofore seen as being human bastions such as journalism, the arts, teaching, even some personal services, are being disrupted by automation and artificial intelligence.
While globalisation may have shifted some lower paid jobs from the West to the East, at the same time automation is rendering these very jobs, and those which remain in the west, obsolete.
Aided by technology, workers are producing much more but are receiving much less. It is impossible to turn back the clock, and equally impossible to recover those jobs which are, and which will be, lost to automation. The challenge for the political economy will be to create political and economic structures which share the vastly increasing wealth, and which creates educational and social structures that free that most remarkable of things — the human brain — to achieve its individual and collective destiny.
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