It will be interesting to see how effective President Trump can be in bringing jobs back to America through reducing regulation, renegotiating bad trade deals, lowering corporate taxes and creating a more business-friendly environment. The process will be a good measure of how much automation has undermined employment for American workers.Some reshoring has already occurred because US-based robots are often cheaper than inexpensive human workers in China or Mexico, particularly given transportation costs. For more troublesome details, see my 2014 blog ”Manufacturing Is Returning to US, but Automation Means Fewer Hires”.And as reported here earlier this month, recent research found that ”Automation Is a Worse Cause of Factory Job Loss Than Bad Trade Deals”. It is concerning that nobody in Washington of either party is discussing the long-term job threat that smart machines pose. Manufacturing is going gangbusters now in the United States, only more efficiently because of automation (U.S. factories still thriving, but robots mean fewer workers, San Jose Mercury, Nov 3, 2016):
America has lost more than 7 million factory jobs since manufacturing employment peaked in 1979. Yet American factory production, minus raw materials and some other costs, more than doubled over the same span to $1.91 trillion last year, according to the Commerce Department, which uses 2009 dollars to adjust for inflation. That’s a notch below the record set on the eve of the Great Recession in 2007. And it makes U.S. manufacturers No. 2 in the world behind China.
Rice University Professor Moshe Vardi, who is widely quoted in the article below, warns that automation will create a world “dystopia” of mass unemployment.Tech geeks chatter about the coming automation juggernaut frequently, but there is little discussion in the big media about it — strange, given the potential for the entire economic system being undermined.
Donald Trump’s victory brings the jobs vs. automation issue into the spotlight, Geekwire.com, November 23, 2016Six months ago, computer scientist Moshe Vardi felt as if he was a voice crying in the wilderness when it came to automation’s anticipated effect on the job market. No political candidate, it seemed, was talking about the potential impact of autonomous cars and automated manufacturing on future employment.Today, the topic still isn’t quite on President-elect Donald Trump’s radar screen. But his election has gotten a lot more experts talking about the issue.“It went from being somewhat esoteric to being practically mainstream,” Rice University’s Vardi told GeekWire.Since the election, Trump has put jobs front and center on his agenda.“Whether it’s producing steel, building cars or curing disease, I want the next generation of production and innovation to happen right here, in our great homeland, America, creating wealth and jobs for American workers,” he said this week in a YouTube video.
But Trump’s prescription focuses on renegotiating (or withdrawing from) trade deals, doubling down on fossil-fuel sources, cutting back on regulations and cracking down on work visas.Even if Trump and congressional leaders follow through on those initiatives, they won’t address what Vardi and other analysts say is a fundamental shift that will transform the very nature of work in the decades to come: the rise of robotics and artificial intelligence.“Winter is coming,” Vardi said. “I think stopping technology will be very difficult, but we need to deal with the implications for the labor force. One of the things that’s clear, which was not clear six months ago, is the political consequences of not doing anything.”The frustrations of dislocated manufacturing workers in America’s Rust Belt were seen as the key to Trump’s narrow victory in the presidential election. Many of those workers are now hoping that Trump’s policies will bring more of America’s manufacturing base back from foreign shores. That could happen, but Vardi said next-generation factories seem set to create far fewer jobs.U.S. manufacturing employment has been falling for several decades, even though U.S. manufacturing output is nearing an all-time high. And the robotic revolution is just about to disrupt another large employment sector, transportation, thanks to the development of self-driving cars and trucks.By 2050, Vardi projects that half of the world’s population will be out of the labor force.Others take a different perspective: In a collection of analyses published just as the presidential primary season was getting under way, a group known as Innovation for Jobs, or I4J, argues that the disruption in employment could force the development of a “people-centered, rather than a task-centered, economy.”The I4J group – which includes Google executive Vinton Cerf, widely known as one of the fathers of the Internet – foresees an age when smartphones and distributed work environments can knit together a flexible, versatile work force.“The problem is not too much automation or innovation; the problem is that we are trying to run the new economy in the old way,” Cerf and his colleagues write in their book, “Disrupting Unemployment.”
Oren Etzioni, CEO of the Seattle-based Allen Institute for Artificial Intelligence, said he distinguishes between automation and AI when it comes to the effect on employment.“More jobs have already been lost due to email (outsourcing, offshoring) than will be lost to AI – in the near future, certainly,” Etzioni told GeekWire in an email. “That said, we do need to think about AI’s impact on jobs and hope that the Trump administration balances the different considerations appropriately. The Obama White House report seems like a great start.”Many of the researchers who study the effects of technology on employment are coming around to the view that the transition from the old to the new economy will require strategies that aren’t yet in the traditional policy playbook.“Now, what is a job? A job is actually a bundle of tasks,” Vardi said. Current trends suggest that many of today’s traditional jobs will be unbundled, with some tasks given over to machines and other tasks turned into gigs for humans.Economic analysts are looking into several strategies in response:
Providing tax incentives for jobs: At least 40 states offer some form of tax credit for creating new jobs, and Vardi said the strategy could be applied to some of the emerging challenges facing the nation’s work force. Trump’s pledge to impose a 45 percent tariff on imports from China takes a different tack – basically threatening tax disincentives for offshoring jobs – but it doesn’t address the impact of automation on manufacturing and transportation.
Creating ‘flexicurity’ for workers: This European-style approach gives governments and their social partners more responsibility for retraining workers and providing an employment safety net.
Offering a universal basic income: Some conservatives as well as progressives favor the idea of folding unemployment payments, welfare, Social Security and other parts of the traditional safety net into one program that provides a baseline payment to all citizens, whether or not they work.
It’s not clear whether such ideas will gain traction during the next four years, but Vardi said there’ll eventually have to be a paradigm shift in employment policy.“To me, the biggest part is a moral imperative,” he said. “And also, the economic imperative will be unstoppable.”