Robots Are Coming For Your Job

Americans worry that robots could make their jobs irrelevant. A new study shows that they may be correct. The report, Technology at Work v 2.0: The Future Is Not What It Used to Be, was conducted at University of Oxford in association with Citibank. Researchers Carl Frey and Mike Osborne, co-directors of the Oxford Martin Programme on Technology and Employment, found that 47% of US jobs are at risk of automation in the next two decades.

They also found that the city where you live may influence the risk of your work being automated. Among metro areas, Boston faces the lowest percentage of jobs likely to be automated, while Fresno, Calif., faces the highest. The cities that fared best in the survey have a cluster of skilled jobs, typically because they have developed a strong tech sector. Boston, for instance, which is home to a number of top universities and has many well educated residents, has become a global technology hub, transitioning successfully from its roots as a shipping center and manufacturing economy to a tech/finance center.

Here are the best/worst rankings:

FireShot Screen Capture #079 - Cities at risk of automation-page-001

Even in cities with the lowest percentage of jobs at risk of automation, nearly 40% of jobs could disappear because of technological innovation, the report finds. So how many workers are we talking about? The BLS reports that in December, 2015 our working population was 149.9 million; 40% of that number would be 60 million people unemployed in the next 20 years. Perhaps it won’t be that bad, maybe 20-30 million jobs will replace the approximately 60 million we stand to lose.

No politician will be able to paint a happy face on THAT.

Skeptics will say not to worry, that the economy has always adapted over time, and created new kinds of jobs. The classic example they use is agriculture. In the 1800s, 80% of the US labor force worked on farms. Today it’s 2%. Obviously, mechanization didn’t destroy the economy; it made it better. Food is now really cheap compared to what it used to cost, and as a result, people have money to spend on other things and they’ve transitioned to jobs in other areas.

But, the agricultural revolution was about specialized equipment that couldn’t be transferred to other industries. You couldn’t take farm machinery and have it flip hamburgers. Information technology is totally different. It’s a broad-based general purpose technology.

There just won’t be new jobs available for all these displaced workers.

There will certainly be many new industries, (think nanotechnology and synthetic biology), and those jobs will be highly paid. But they won’t employ many people. They’ll use lots of technology, rely on big computing centers, and be heavily automated.

Think about what Facebook and Twitter have added to the jobs economy: They are two of our very “best” success stories, and they only employ 8,100 workers. They have had a huge impact on society, and have created significant value for their owners, but the total jobs they have created are only a rounding error in the US economy.

Much of what we buy is produced in factories increasingly run with robots, and maintained and operated by small cadres of engineers. Also, keep in mind that globally, some 3 billion people are already looking for work and the vast majority are willing to work for less than the average American.

So, we can expect an ever-greater number of unemployed chasing an ever-shrinking number of jobs that can’t be eliminated or simplified by technology. Thus, the prognosis for many of our medium and some higher-skilled workers appears grim.

Incomes will continue to stagnate, because automation does not threaten unskilled jobs. This is sometimes called “Moravec’s Paradox”, which says that, contrary to traditional assumptions, high-level reasoning requires relatively little computation, but low-level sensorimotor skills require enormous computational resources. The “Roomba” robotic vacuum cleaner remains just an expensive toy. It has had zero impact on the market for janitors and maids like a rechargeable cordless sweeper has done, yet, wages for American janitors and maids have fallen because of competition from the currently unemployed and newly arrived immigrants.

If we forecast continuing technology breakthroughs (and we should), and combine that with the 3 billion people currently looking for work globally, we have to conclude that the planet is overpopulated if the goal is a growing global middle class.

This is why the quest for better technology has become the enemy of sustaining middle class job growth in the developed world.

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Corporations Want Europe to Add Refugees

According to The Guardian, the European Union ministers forced through a plan to relocate Middle Eastern asylum-seekers throughout the EU. The plan would distribute 120,000 souls across all EU countries.

The headline yesterday was that Romania, Hungary, Slovakia and the Czech Republic voted against the proposal, but could be forced to take immigrants anyway. These Eastern European governments have been among the most vocal opponents of plans to relocate refugees across the EU. But, according to The Economist, this position ignores economic logic:

A survey by Manpower Group, a consultancy, found that two out of five firms in Poland struggle to fill vacancies. In Hungary, almost half could not get the staff they need. In the Czech Republic and Slovakia fewer employers report difficulties (18% and 28%) but the share has been climbing steadily over the past few years.

Here is their chart showing the difficulty in filling jobs in the EU:

Where immigrants are needed

The argument in the countries that need to fill jobs but do not want migrants is that they can fill skill gaps by drawing in labor from neighboring countries with more similar cultures. This may fill some positions, but wages are much lower in the countries needing labor. The Economist reports that wages in Germany are 150% higher than in Hungary. And Germany’s social safety net is superior.

These statistics point to serious problems in the EU’s local economies. But the real issue isn’t under population in the EU. We have been told for years that the unemployment rate among young Europeans is very high. Trading Economics reports that the overall jobless rate in the Eurozone fell to 10.9% in July, from 11.1% in the previous three months. That means 17.4 million EU citizens are unemployed. But, youth unemployment averages 21.9%. Here are some depressing Youth Unemployment statistics from summer, 2015: (Source: Statista.com)

  • Greece:     53.7%
  • Spain:       49.2%
  • Italy:          44.2%
  • France:     23.6%
  • Germany:   7.1%

So, even if people in certain EU countries understand that there might be an economic upside to allowing immigrants into their country, their opening position is: “why aren’t we hiring our own kids?”

Then there is the anti-immigrant issue that transcends economic concerns, the ethnic makeup of one’s own country, and what migrants may do to impact these old European cultures. No argument about the economic merits of increased immigration will likely sway voters if they believe their way of life will be compromised. The fear of a “mob at the gates” drives anti-immigrant feeling throughout the world.

So, who says Europe needs all of this migrant labor? Much like in the US, it is the corporations who say they can’t fill jobs with the requisite talent. What they really mean is, talent at a price.

Why can’t German firms import Italian or Spanish kids to do the work?

This sounds remarkably similar to tech firms in the US saying that they cannot find STEM workers, and so ask the government to add more H-1B visas so that migrants from India can fill jobs in Silicon Valley.

The global picture is clear: Many jobs now done by humans are being taken over by machines. Computers will ease our transition to declining populations. Even many low-skilled jobs in manufacturing and agriculture can be handled by robots, requiring a large jump in the skills humans need to learn in order to get the fewer, better paying jobs that remain.

A partial solution may be to import some migrants to fill a few low skilled jobs, but adoption of new technologies rather than population growth, is a better way to go about raising the living standards in Europe.

And we must shut off global population growth sometime soon. The Wrongologist has reported before on “The Coming Jobs War” by Jim Clifton, in which Clifton says that globally, some 3 billion people are looking for work right now, and nearly all of them are willing to work for less than the average American or European.

Every society will be more secure economically if they can promote a high resource-to-population ratio. Those countries who can become close to self-sufficient in food, water, energy, and renewable resources will be the only ones with middle-class living conditions.

Middle Eastern migrants understand this. Some may be fleeing for their lives, but the vast majority are simply economic migrants. The EU is being led by the nose to focus on asylum-seekers, when even they are economic migrants.

Although the poorer parts of the world experience very high population growth, and the developed world does not, it is a safe guess that not a single country today has a population that is low enough to guarantee success in the future world economic order.

Think about what Agent Smith said in The Matrix:

Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment but you humans do not. You move to an area and you multiply and multiply until every natural resource is consumed and the only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. Do you know what it is? A virus. Human beings are a disease, a cancer of this planet. You’re a plague and we are the cure.

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