Tag: automation costs jobs

Saturday Soother – Final Four Edition

The Daily Escape:

Aiguille du Midi – 2019 photo by Berenicids. The Aiguille du Midi (12,605 ft.) is part of the Mont Blanc massif in the French Alps. It can be directly accessed by cable car from Chamonix. If you enlarge the picture, the cable car building is visible at the very top of the mountain.

The end of Wrongo’s favorite sport, the college basketball season, happens on Monday. Tonight is the Final Four, the Wrong family’s equivalent of the Super Bowl, with family gathering for food and drink around the TV.

But, that doesn’t start until the early evening, so we’ve got time to talk about another scary piece of news this week: There will be severe human impacts caused by the next wave of automation. The bottom line is that plenty of jobs will be lost and we’ll see societal disruption as machines and robots take over American jobs. Axios takes it from there:

“In a new report, the Aspen Institute nudges policymakers away from any notion that the American economy will naturally adjust as robots are introduced at an accelerated pace over the coming two and three decades.”

Axios goes on to quote Aspen’s Alistair Fitzpayne who says that, workers displaced in prior technological cycles “have experienced profound downward mobility” in new jobs at much lower pay and benefits.

The report’s executive summary warns, “Artificial intelligence and other new technologies may lead to deeper, faster, broader, and more disruptive automation”, and retraining programs may be unable to mitigate the downward trend in earnings and social status. Aspen warns that fewer jobs may be created than are destroyed:

  • No one knows how many new jobs will be produced, where they will be created, or how much they will pay.
  • Most studies play down the real possibility that the automation age could go very wrong, for an extended period, for large swaths of workers and their communities.
  • Workers who lost their jobs in the wave of manufacturing layoffs in the early 1980s, for instance, were still earning 15%-20% less in their new work 20 years later, according to the Aspen report.

Axios reports that Aspen tries to pull the punch, saying that with the right policy choices, we can choose to create an economy that works for everybody. That we can encourage employers to adopt a more “human-centric approach” to delivering the bottom line. That we can support displaced workers through retraining, reemployment services, and unemployment insurance to help them transition to new jobs and careers.

Maybe, but it seems questionable that those things will spontaneously happen. Rep. Alexandria Ocasio-Cortez (D-NY) suggests all this new technology might be liberating, but she has reservations:

“The reason we’re not excited by it is because we live in a society where if you don’t have a job, you are left to die. And that is, at its core, our problem.”

The cultural stigma attached to job loss is profound, and that is unlikely to change by adding more retraining programs. Conservatives are not about to celebrate jobless people having more time to learn, to create art, or enjoy the world they live in, as long as they are unemployed.

The merciless mantra of shareholder value above all, and our corporate masters’ acceptance of the inevitability of technological change means that low and moderate-skill workers are expendable. Efficiency for more bottom line is more important than the lives of human workers.

This coming automation disruption is hard to see now. But estimates are that it will impact as many as 40% of American workers.

The 21st Century American corporation isn’t our friend, as currently constituted and rewarded. It is the enemy of our society, because they are quietly working to eliminate our jobs. We constantly reduce their taxes, vainly hoping for them to create more jobs. We look the other way when they pollute our environment. We allow them to disproportionately finance our elections.

It’s time for a new Capitalism.

But you’ve had enough for this week, so on to the Saturday Soother. Start slowly, particularly if you plan to stay up until the last Final Four game ends at around midnight. Let’s brew up a cup of New Hampshire’s Flight Coffee’s single origin Tanzania Tarime AB, ($17/12oz.), with its floral fragrance and intensely sweet flavor. Now settle into your favorite chair and listen to “Spring Morning” by Frederick Delius, played by the Royal Scottish National Orchestra and conducted by David Lloyd Jones. “Spring Morning” is the third of ‘Three Small Tone Poems’ by Delius:

Those who read the Wrongologist in email can view the video here.

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Monday Wake Up Call – January 28, 2019

The Daily Escape:

Bell Island, Franz Josef Land with Eira Lodge in foreground. The lodge is a remnant of Benjamin Leigh-Smith’s expedition in 1880 – 2017 photo by Ilya Timin, CC BY-SA 4.0.

The largest gathering of billionaires in the world took place last week at the World Economic Forum’s annual conference in Davos. Vanity Fair reports that they:

“…consume $55 Caesar salads and shark canapés, rub shoulders with Matt Damon, and attend parties that involve “endless streams of the finest champagne, vodka, and Russian caviar, dancing Cossacks, and beautiful Russian models…”

Bloomberg added: (emphasis by Wrongo)

“UBS and PwC Billionaires Insights reports show that global billionaire wealth has grown from $3.4 trillion in 2009 to $8.9 trillion in 2017…The fortunes of a dozen 2009 Davos attendees have soared by a combined $175 billion, even as median US household wealth has stagnated…”

And there was this report from Davos in the NYT by Kevin Roose: (emphasis by Wrongo)

“They’ll never admit it in public, but many of your bosses want machines to replace you as soon as possible. I know this because, for the past week, I’ve been mingling with corporate executives at the World Economic Forum’s annual meeting in Davos. And I’ve noticed that their answers to questions about automation depend very much on who is listening.”

Roose goes on to say: (emphasis by Wrongo)

“In public, many executives wring their hands over the negative consequences that artificial intelligence and automation could have for workers. They…talk about the need to provide a safety net for people who lose their jobs as a result of automation.

But in private settings, including meetings with the leaders of the many consulting and technology firms…these executives tell a different story: They are racing to automate their own work forces to stay ahead of the competition, with little regard for the impact on workers.”

Roose quotes Mohit Joshi, president of Infosys, an Indian technology and consulting firm: (emphasis and brackets by Wrongo)

“Earlier they [large businesses] had incremental, 5 to 10% goals in reducing their work force. Now they’re saying, ‘Why can’t we do it with 1% percent of the people we have?’”

And American executives have come up with new buzzwords and euphemisms to disguise their intent. Workers aren’t being replaced by machines, they’re being “released” from onerous, repetitive tasks.

Companies aren’t laying off workers, they’re “undergoing digital transformation.” They’re being “reskilled”.

A 2017 survey by Deloitte found that 53% of companies had already started to use machines to perform tasks previously done by humans. That figure is expected to climb to 72% by next year. As an example, Terry Gou, the chairman of Foxconn, the Taiwanese electronics manufacturer, who makes iPhones, has said his company plans to replace 80% of its workers with robots in the next five to 10 years.

And Wisconsin just gave Foxconn $4.5 Billion to build a plant and employ 13, 000 workers. Can Wisconsin’s soon-to-be laid-off workers be “re-skilled”, and find employment?

A January 2019 report by the very same World Economic Forum estimates that the 1.37 million workers who are projected to be displaced fully out of their roles in the next decade according to the US BLS, may be reskilled to new viable (similar skill set) and desirable (higher wages) jobs:

“The report shows that, in the US alone, with an overall investment of US$4.7 billion, the private sector could reskill 25% of all workers in disrupted jobs with a positive cost-benefit balance. This means that, even without taking into account any further qualitative factors or the significant indirect societal benefits of reskilling, for 25% of at-risk employees, it would be in the financial interest of a company to take on their reskilling.”

The rest presumably will need to fend for themselves. They will likely rely on your taxpayer dollars to be “reskilled”, or go on government assistance.

The real question isn’t how to stem the tide of automation, it’s inevitable. The question for capitalists and our government is how the financial gains from automation and AI will be distributed, and whether the excess profits corporations reap as a result of layoffs will go in part, to workers, or solely to bigwigs and their shareholders.

Will we create a shared prosperity, or just a greater concentration of wealth?

Time to wake up America! This Fourth Industrial Revolution is underway, and estimates are that it will impact as many as 40% of American workers.

It’s time to understand that the 21st Century American corporation isn’t our friend, as constituted and rewarded. It is the enemy of our society, as they quietly work to eliminate your jobs.

We constantly reduce their taxes. We look the other way when they pollute our environment. We allow them to disproportionately finance our elections.

It’s time for a new Capitalism.

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Saturday Soother – December 16, 2017

The Daily Escape:

Central Park NYC, December 12th – 2017 photo by Rommel Tan

Long-time readers know that Wrongo has a very low opinion of Speaker of the House Paul Ryan (R-WI), who he considers an intellectual joker. He is often given a pass by the main stream media, who suggest that he is a thoughtful and principled Republican. But once again, he looked like a partially-informed hack on Thursday when he said that Americans need to have more babies or risk a collapse of Medicare and Social Security.

His concern is about the declining US birth rate. The Boston Globe reports that:

Ten years ago, the typical American woman had about 2.1 children. Today, it is about 1.77, representing a collapse in fertility on par with the declines in other countries that yielded Japan’s rapidly graying population in the 1990s, or Canada’s massive present-day demand for immigrants.

From Ryan’s news conference: (parenthesis by Wrongo)

People — this is going to be the new economic challenge for America. People…I did my part, (Ryan has three kids) but we need to have higher birth rates in this country. Meaning, baby boomers are retiring, and we have fewer people following them in the work force…We have something like a 90% increase in the retirement population in America, but only a 19% increase in the working population in America…

It is true that birth rates in the US have declined, but that’s not necessarily bad news. For example, birth rates for teenagers hit a record low last year. Also, Wrongo recently described McKinsey’s report on jobs lost to automation that showed 75 million jobs are at risk in the US by 2030.

Perhaps we already have too many workers for the jobs revolution that is occurring all around us.

And there’s an obvious solution to the problem that Ryan ignores: Allowing more immigrants into the country, either to fill the jobs being vacated by retiring baby boomers, or as necessary to meet tomorrow’s job requirements. But Ryan shows that he’s all in with Trump’s hard line anti-immigration positions.

Should American women become brood mares? This isn’t a new concept. The fear of being outnumbered by racial and ethnic minorities is the driving force behind today’s alt-right, and the view was around in earlier white nationalist movements. HuffPo interviewed Kelly J. Baker, author of “Gospel According to the Klan”. Baker says that the need to ensure that white women were having more white babies was a key part of the Ku Klux Klan’s platform during its resurgence in the 1920s: (emphasis by Wrongo)

Baker said that the 1920s Klan was “nervous” about the possibility of widespread birth control for white women…To push back against the rising availability of effective birth control, the Klan told white women that having as many white children as possible is your job and it matters for your family and your race and for America.

And now, Ryan makes this a mainstream GOP idea. For all of the political empowerment of women in today’s headlines, the Ryan argument lands in the same place as today’s alt-right, and yesterday’s KKK.

Ryan and the GOP want to see more babies, but they won’t support young kids with health insurance through the Children’s Health Insurance Program (CHIP). Quartz reports that next month, 600,000 American children will lose their CHIP coverage. CHIP has been instrumental in ensuring health care coverage of children in US families that aren’t poor enough to qualify for Medicaid, but cannot afford any other form of insurance.

Republicans talk a lot about the cost of healthcare. The cost of not providing healthcare to children in an America with failing schools is impossible to calculate. It is very high, it lasts lifetimes and possibly, generations.

Yet, Ryan is saying that American women need to have more babies to Make America Great Again.

And we know that he’s asking for more white babies.

OK, it’s Saturday, and we need a break from toxic politics, and maybe from obsessing about shopping for gifts. Hanukkah began this week, so Wrongo looked for a soothing piece of music that was inspired by the celebration of the Festival of Lights. Here is “Hanukkah Overture for String Orchestra and Clarinet” by Adam Shugar.

If you look at the YouTube video, you will see that it has just 5,000 views. It should have many more. You should watch it because the music is good, and unlike most orchestral pieces, this string orchestra performs while standing. The video is shot from a high angle, and looking down allows you to see them all as they play together, almost like a choreographed dance. Here is “Hanukkah Overture for String Orchestra and Clarinet” played by the Orchestre Nouvelle Génération under the direction of Airat Ichmouratov, with Mark Simons on clarinet:

Those who read the Wrongologist in email can view the video here.

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Automation Will Cost 75 Million US Jobs By 2030

The Daily Escape:

Torres Del Paine National Park, Patagonia, Chile. Torres Del Paine is known for its mountains, glaciers and grasslands that shelter rare wildlife like Guanacos.

Wrongo has written many times about automation taking jobs that will not be replaced onshore. McKinsey & Co. has a new study that finds that job losses due to automation will take out anywhere from ten to twenty percent of the current global workforce by 2030:

As many as 800 million workers worldwide may lose their jobs to robots and automation by 2030, equivalent to more than a fifth of today’s global labor force.

The report covers 46 countries and more than 800 occupations. The McKinsey Global Institute study found that even if the rise of robots is less rapid than they expect, 400 million workers could still find themselves displaced by automation and would need to find new jobs over the next 13 years. McKinsey said that both developed and emerging countries will be impacted. Machine operators, fast-food workers and back-office employees are among those who will be most affected if automation spreads quickly through the workplace. Bloomberg made a chart summarizing the jobs lost by country:

Source: Bloomberg

This implies that some 75 million jobs are at risk in the US by 2030, to be replaced by…something.

The bottom line is that many of the unemployed will need considerable help to shift to new work, and as a result, starting salaries will continue to flat line. McKinsey paints a rosy picture about the future jobs market post-automation. They say that the economies of most countries will eventually replace the lost jobs, but are a little unclear on what the new jobs will be. They mention health care, infrastructure, construction, renewable energy and IT as likely job areas.

But the challenge is how the displaced workers learn the new skills necessary by 2030. Axios quotes Michael Chui, lead author of the report on the needs for retraining:

We’re all going to have to change and learn how to do new things over time…It’s a Marshall Plan size of a task…

How will America fund a Marshall Plan for retraining 75 million of us, particularly when we’ve just given the very corporations who are automating our jobs even more of a break on their tax bills? It’s unlikely that the Republican-controlled Congress will have any desire to fund the necessary comprehensive re-training effort. If Congress had any foresight, they could have made their new corporate tax cuts conditional on these same firms paying for the job retraining that their automation will cause for American workers.

But, it will be our job to figure out where these new training funds will come from, right along with the funds we have already given to the job creators Republican donors.

And what if you don’t have the money or learning aptitude to acquire these new skills? Well, you are likely to be both unemployed and poor. And that mean tens of millions more Americans will not have the resources to stay out of poverty.

Perhaps CEOs and Congresscritters ought to remember that there are enough guns for every man, woman and child in this country, and many are in the hands of the very people who would be hurt most by automation.

We can’t hold back the tide of automation, but we can be smart about how we, as a country make the transition to fewer very highly-skilled workers and many narrowly-skilled workers. There are questions to ask, and solutions to craft for the post-2030 world.

How will America’s forgotten workers survive in a society that is led by people who don’t care if they have a job?

How will America’s forgotten workers survive if the political establishment tries to unwind the social safety net while celebrating the progress of technologies that cost jobs?

That could lead to torches and pitchforks.

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