Modern Labor Shifts Due To Technology
Over the last post, I looked at some historical examples of technological advancements, and their effects on the labor market and society in general. We looked at the first and second industrial revolutions, and in this post, I aim to discuss more recent industries and how they have fared, as well as some potential policies that address the issue.
In terms of looking at the effects of technological innovation, I look mostly to America. Given that it is one of the most developed countries in the world, with one of the largest populations, it provides a decent representation for the rest of the developed, mainly tertiary economies of the rest of the world.
One previously prominent American industry that has now been somewhat eroded away, is that of manufacturing. One only has to look to places like Michigan and Ohio, where you can truly appreciate the consequences of millions of jobs automated away. Detroit for example, conjures up horrid notions of droves of roaming gangs, run down schools, pitiful housing market, and so on. It is clear to see that automation, especially within the car manufacturing industry, has absolutely decimated these regions. But however, for the average consumer, for the economy, firms are able to churn out goods and services at cheaper prices. One must carefully tread the fine line between a more efficient economy and widespread structural unemployment.
Manufacturing has been hit particularly hard by technology. Widespread adoption of things like automation and robots have resulted in massive job losses across the United States. While manufacturing being relatively stable during the late twentieth century, since 2000, the US has lost 6 million manufacturing jobs. This was not helped by the 2008 crisis, 2.3 million manufacturing jobs were lost between the Decembers of 2007 and 2009. Of course, outsourcing to other, cheaper countries, like China has a role to play, but technology and automation is a major factor. Economic theory would dictate that these workers would simply move to different places, switch job, learn new skills, and keep going. But that is not what happened in manufacturing. 40–50% of these workers ended up not being able to find a job or change skills, sometimes leaving the workforce entirely. So clearly, the idea that “the workforce will fix itself”, is demonstrably false, at least with respect to manufacturing.
One specific AI technology I have heard particularly intense debates about is that of self-driving cars. More specifically, self driving trucks. Trucking is an immensely important job in America, one of the most popular; it would be quite interesting to look at this industry in a sort of theoretical Petri dish. There are currently over 3.5 million truckers in America, and the development of self driving vehicles could potentially wipe those jobs off the face of the earth. Some even advocate the government stepping in with legislation to prevent the development of such technology. Tucker Carlson for example, while on the Ben Shapiro Show was asked if he would be: “ in favor of restrictions on the ability of trucking companies to use this sort of technology to artificially maintain the number of the jobs that are available in the trucking industry ”, and proceeded to respond with almost overwhelming affirmative enthusiasm.
Others however, do not share Tucker’s enthusiasm for getting in the way of making progress. For example, Ben Shapiro posed the same question to Andrew Yang as he did to Tucker Carlson, and his response was, in essence, that though there may be isolated instances in which progress might have to be slowed down for the greater good, but in the long term, progress should not be slowed down. This idea of ‘ for the greater good’ in this scenario would be something along the lines of, slowing down development of self driving vehicles to give truckers and drivers the chance to change professions, find some other jobs, create new ones, and drive as many people off driving as possible, until making those jobs redundant becomes economically feasible.
It of course important to note that the level of job replacements is hitherto unseen, the first industrial revolution paling in comparison to what could potentially unfold over the next few years. There are those who believe that those jobs and the people holding them must be sacrificed at the altar or progress. And then there are those at the other end, who like the luddites before them, wish for society and industry to handicap itself to secure these endangered jobs. Obviously, the distribution of opinions, in general, have the vast majority of people somewhere in the middle, and I think it is important not to get bogged down in the views of the extreme poles, but rather approach the solutions from a central point of view.
There is no doubt that the present revolution will rile up many people. The industrial revolution the turn of the century caused mass riots and vast sums in property damage. Estimates put the approaching changes at 3–4 times faster and larger than earlier revolutions. The scale is massive, and clearly some big government policies are going to have to be made to stave off a nationwide, or indeed global recession that may result from a large number of people suddenly becoming redundant. I truly do believe that we as a human can and will achieve this goal.
Nikhil is a Student Ambassador in the Inspirit AI Student Ambassadors program. Inspirit AI is a pre-collegiate enrichment program that exposes curious high school students globally to AI through live online classes. Learn more here