by Tony Wyman
Editor’s Note: This review of productivity maximized robot workforces, is the second part in a series examining the challenge of the rapid incorporation of automation and mechanization displacing American workers. In part One, the author examined the plans for automated transportation (the trucking industry) and increased mechanization of coal mining.
What entices managers to increase their reliance on robots is obvious: greater productivity at lower costs. Robots are increasing American manufacturing productivity dramatically, up 32% from 1998 to 2012.
Today, thanks to automation, there are only 12.1 million factory workers employed doing work that, without the levels of modern automation we see today, would have been done by 20.9 million men and women.
So, as President Trump follows the history of American politicians deliberately misrepresenting the problem to the American people, finding scapegoats to blame in far off countries instead of addressing the real issue, what is the White House’s plan to “bring jobs back” to America from Robotistan?
McKinsey & Company, a leading global business consultancy operating in more than 70 countries, suggests workers could spend less time in monotonous tasks and spend more time doing things that are very difficult to automate, intrinsically human things like creating new ideas and products or evaluating and responding to the emotions of clients and coworkers.
“Financial advisors, for example, might spend less time analyzing clients’ financial situations, and more time understanding their needs and explaining creative options. Interior designers could spend less time taking measurements, developing illustrations, and ordering materials, and more time developing innovative design concepts based on clients’ desires.”
But, for occupations where monotony and repetition are part of the job and where creativity has little or no value, McKinsey’s answer falls flat.
Tax Robots – Pay Humans
Bill Gates has a solution that won’t sit well with conservatives, free market libertarians or union leaders.
Instead of renegotiating trade policies, Gates believes we should tax robots and use the proceeds to help displaced workers.
The reality is this plan will dramatically increase the costs of manufacturing in the US and make us less competitive against countries that allow the free market to solve the problem, without solving the employment problem for displaced workers.
It will slow growth in our economy, without addressing the growing income inequity between highly-paid managers who tell machines what to do and workers displaced by those machines. Noah Smith of Bloomberg View. critiques Gates’ thesis:
“The problem with Gates’ basic proposal is that it’s very hard to tell the difference between new technology that complements humans and new technology that replace’s them. This is especially true over the long term. Power looms replaced human weavers back in the Industrial Revolution, but people eventually became more productive, by learning to operate those looms. If taxes had slowed the development of power looms, the eventual improvements would have come later.”
“This is a powerful argument against the taxation of automation. Gates is right to say that we should start thinking ahead of time about how to use policy to mitigate the disruptions of automation. But given the importance of sustaining innovation, we should look at alternative policies,” said Bloomberg in a February 2017 story.
Gates disagrees and even says we should slow the growth of technology to give government, businesses and workers a chance to adjust to the new realities of the future. He said:
“You cross the threshold of job-replacement of certain activities all sort of at once. So, you know, warehouse work, driving, room cleanup, there’s quite a few things that are meaningful job categories that, certainly in the next 20 years, being thoughtful about that extra supply is a net benefit. It’s important to have the policies to go with that.”
Giving people the time they need to adjust to changes in the economy might forestall unrest and worry over the future that could lead to a backlash against technology, Gates suggested. He urged leaders to plan for the changes and to communicate that plan to the people to keep them from seeing innovations as a threat to their future.
Gates added to his argument, saying:
“People should be figuring it out. It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm. That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it.”
While Gates’ plan might fall short of satisfying everyone, it, at least, addresses the real issue. Whether workers are directly subsidized by a tax on robots, as Gates suggests; or whether the government subsidizes low-skill human labor to make it cheaper compared to the capital costs associated with automation, as Bloomberg proposes – something has to be done for the nation’s workforce threatened by automation.
Retraining these workers might be part of the solution. Providing funding to retrain workers displaced by robots to fill other, higher skilled positions, makes sense. Instead of driving trucks, can the men and women behind today’s wheels become the engineers of tomorrow who make more and more jobs obsolete?