Rise of the Robots: Technology and the Threat of a Jobless Future

by Martin Ford

As of 2013, a typical production or nonsupervisory worker earned about 13 percent less than in 1973 (after adjusting for inflation), even as productivity rose by 107 percent and the costs of big-ticket items like housing, education, and health care have soared.

That shift will ultimately challenge one of our most basic assumptions about technology: that machines are tools that increase the productivity of workers. Instead, machines themselves are turning into workers, and the line between the capability of labor and capital is blurring as never before.

While lower-skill occupations will no doubt continue to be affected, a great many college-educated, white-collar workers are going to discover that their jobs, too, are squarely in the sights as software automation and predictive algorithms advance rapidly in capability.

Information technology is a truly general-purpose technology, and its impact will occur across the board. Virtually every industry in existence is likely to become less labor-intensive as new technology is assimilated into business models—and that transition could happen quite rapidly. At the same time, the new industries that emerge will nearly always incorporate powerful labor-saving technology right from their inception.

Can accelerating technology disrupt our entire system to the point where a fundamental restructuring may be required if prosperity is to continue?

A variety of educational robots focused on everything from encouraging technical creativity to assisting children with autism or learning disabilities.

I don’t think these have panned out.

While a robot like Baxter can certainly eliminate the jobs of some workers who perform routine tasks, it also helps make US manufacturing more competitive with low-wage countries.

Future shoppers will rely more and more on their phones as a way to shop, pay, and get help and information about products while in traditional retail settings.

Definitely prescient

The Ad Hoc Committee went on to propose a radical solution: the eventual implementation of a guaranteed minimum income made possible by the “economy of abundance” such widespread automation could create, and which would “take the place of the patchwork of welfare measures” that were then in place to address poverty.*

Measured in 2013 dollars, a typical worker—that is, production and nonsupervisory workers in the private sector, representing well over half the American workforce—earned about $767 per week in 1973. The following year, real average wages began a precipitous decline from which they would never fully recover. A full four decades later, a similar worker earns just $664, a decline of about 13 percent.

Karabarbounis and Neiman concluded that these global declines in labor’s share resulted from “efficiency gains in capital producing sectors, often attributed to advances in information technology and the computer age.”

the percentage of men in the labor force has been in consistent decline since 1950, falling from a high of about 86 percent to 70 percent as of 2013.

both the overall labor force participation rate and the participation rate for prime working-age adults have fallen by about three percentage points since 2000—

95 percent of total income gains during the years 2009 to 2012 were hoovered up by the wealthiest 1 percent.37

The propensity for the economy to wipe out solid middle-skill, middle-class jobs, and then to replace them with a combination of low-wage service jobs and high-skill, professional jobs that are generally unattainable for most of the workforce, has been dubbed “job market polarization.” Occupational polarization has resulted in an hourglass-shaped job market where workers who are unable to land one of the desirable jobs at the top end up at the bottom.

polarization is not necessarily something that happens according to a grand plan, nor is it a gradual and continuous evolution. Rather, it is an organic process that is deeply intertwined with the business cycle; routine jobs are eliminated for economic reasons during a recession, but organizations then discover that ever-advancing information technology allows them to operate successfully without rehiring the workers once a recovery gets under way.

financialization is not so much a competing explanation for our seven economic trends; it is rather—at least to some extent—one of the ramifications of accelerating information technology.

a 2013 study by Carl Benedikt Frey and Michael A. Osborne at the University of Oxford concluded that occupations amounting to nearly half of US total employment may be vulnerable to automation within roughly the next two decades.

In one study conducted by Dan Ariely of Duke University, over 90 percent of Republicans and 93 percent of Democrats preferred an income distribution similar to that of Sweden over that of the United States.

Many people might be surprised to learn that one of the most important ramifications of Moore’s Law has been the fact that, at least so far, world energy supplies have kept pace with surging demand.

When the intelligence encapsulated in information technology is replicated and scaled across organizations, it has the potential to fundamentally redefine the relationship between people and machines. From the perspective of a great many workers, computers will cease to be tools that enhance their productivity and instead become viable substitutes.

The evidence shows pretty clearly that the income realized from online activities nearly always tends to follow a winner-take-all distribution. While the Internet may, in theory, equalize opportunity and demolish entry barriers, the actual outcomes it produces are almost invariably highly unequal.

As more people lose the dependable income stream that anchors them into the middle class, they are likely to increasingly turn to these long-tail opportunities in the digital economy. A lucky few will provide the anecdotal success stories we will hear about, but the vast majority will struggle to maintain anything approaching a middle-class lifestyle.

IT’s unique ability to scale machine intelligence across organizations in ways that will substitute for workers and its propensity to everywhere create winner-take-all scenarios will have dramatic implications for both the economy and society.

As top managers increasingly employ data-driven decision making powered by automated tools, there will be an ever-shrinking need for an extensive human analytic and management infrastructure. Whereas today there is a team of knowledge workers who collect information and present analysis to multiple levels of management, eventually there may be a single manager and a powerful algorithm. Organizations are likely to flatten. Layers of middle management will evaporate, and many of the jobs now performed by both clerical workers and skilled analysts will simply disappear.

By some estimates, automated trading algorithms are now responsible for at least half, and perhaps as much as 70 percent, of stock market transactions.

As technology advances, we can expect that more and more of the routine tasks now performed by offshore workers will eventually be handled entirely by machines.

In June 2013, Hugo Barra, Google’s top Android executive, indicated that he expects a workable “universal translator” that could be used either in person or over the phone to be available within several years.

Not yet

In addition to his work in genetic programming, Koza is the inventor of the scratch-off lottery ticket and the originator of the “constitutional workaround” idea to elect US presidents by popular vote by having the states agree to award electoral-college votes based on the country’s overall popular-vote outcome.

Now that’s a footnote!

In a 2013 interview, Christensen said that “15 years from now, half of US universities may be in bankruptcy.”22

Eh, not so much

Sankai’s company, Cyberdyne, has also designed a more robust version of the exoskeleton

Wait, what?!?

One of the most promising areas of research is the design of sensors capable of monitoring glucose in people with diabetes. The sensors could communicate with a smart phone or other external device, instantly alerting patients if their glucose level falls outside the safe range and avoiding the need for uncomfortable blood tests.

Yes!

In January 2014, Google announced that it is working on a contact lens that would contain a tiny glucose detector and wireless chip.

Haha, no

Brill’s article notes that as hospitals increasingly snap up “doctor’s practices and competing hospitals, their leverage over insurance companies is increasing.”

Clearly written before United/Optum became the largest employer of physicians in the country. https://www.beckerspayer.com/payer/meet-americas-largest-employer-of-physicians-unitedhealth-group.html

Nurse practitioners with advanced degrees have been able to overcome such political opposition in seventeen US states and are likely to be an important component of primary care in the future.

Correct

The bottom line is that personal 3D printing would come to look much like the Internet: lots of free or inexpensive stuff for consumers, but far fewer opportunities for the vast majority of people to generate a significant income.

The most optimistic boosters of self-driving car technology expect a major impact within five to ten years. I suspect that technical challenges, social acceptance, and obstacles related to liability and regulation may make such projections seem overly optimistic.

He’s been proven mostly right

Kevin Drum of Mother Jones, who thinks that “genuine self-driving cars will be available within a decade and that they’ll be big game changers,”17 has suggested that it might be possible to purchase a share in a car service, with guaranteed availability, for a fraction of what it would cost to buy a vehicle. In other words, you would share the car only with fellow subscribers to a service, rather than with the public at large.*

He was right about shared car services but wrong about them being autonomous

Cynamon and Fazzari see few prospects for a meaningful recovery among the majority of consumers and “fear that the demand drag from rising inequality that was postponed for decades by bottom 95 percent borrowing is now slowing consumption growth and will continue to do so in coming years.”7

Whelp, it recovered somehow

“Too large a proportion of recent ‘mathematical’ economics are merely concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.”

The theme was fleshed out in 1993 by San Diego State University mathematician Vernor Vinge, who wrote a paper entitled “The Coming Technological Singularity.” Vinge, who is not given to understatement, began his paper by writing that “[w]ithin thirty years, we will have the technological means to create superhuman intelligence. Shortly after, the human era will be ended.”

The progression toward ever more automation is not an artifact of “design philosophy” or the personal preferences of engineers: it is fundamentally driven by capitalism.

or there would be a labor shortage and a burst of inflation.

Yep

any inflation would probably be short-lived,

Hmm

If Piketty’s theory is correct—and it has been subject to a great deal of debate—then I think advancing technology is likely to greatly amplify his conclusions, quite possibly producing even higher levels of future inequality than his model predicts.

We eventually will have to move away from the idea that workers support retirees and pay for social programs, and instead adopt the premise that our overall economy supports these things. Economic growth, after all, has significantly outpaced the rate at which new jobs have been created and wages have been rising.

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 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.