Donald Trump and Hillary Clinton both said a great deal about trade deals and the loss of middle class jobs in America during the last election. Ross Perot famously said this about NAFTA in 1992:
We have got to stop sending jobs overseas. It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,...have no health care—that's the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south.
Trade deals have sent jobs to Mexico and other places around the world—there is no argument about that. That’s the nature of business in today’s world. Profits are king, and the only way the MBAs running these corporations can see to increase profits is to lower labor costs. Trump, Clinton, Sanders, Perot, and others speaking out about trade deals are right to a degree; however, they are missing the most disruptive thing headed right toward the labor market.
The plot of the movie I, Robot revolves around the three laws of robotics. These laws were written in 1942 by Isaac Asimov in his short story Runaround.
First Law: A robot may not injure a human being, or, through inaction, allow a human being to come to harm.
Second Law: A robot must obey the orders given it by human beings except where such orders would conflict with the First Law.
Third Law: A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.
Will Smith's character, Detective Del Spooner, is pursuing a robot capable of violating the three laws of robotics. In the background early on in the movie you see robots delivering packages for FedEx, picking up trash, walking dogs, and doing other tasks. One assumes that robots have replaced humans in the majority of jobs that require manual labor. It is even hinted at in one scene featuring Detective Spooner's grandmother: even cooks have been replaced with robots.
Early in the movie, while interviewing the CEO of US Robotics (the firm that manufactures the robots in the movie), Detective Spooner says:
A really big week for you folks around here. You gotta put a robot in every home. Look, this is not what I do, but I got an idea for one of your commercials. You could see a carpenter making a beautiful chair. Then one of your robots comes in and makes a better chair twice as fast. Then you superimpose on the screen. USR: Shittin' on the little guy. That would be the fade-out.
To which Lawerence Robertson (CEO of US Robotics) replies:
Yeah. I see. I suppose your father lost his job to a robot. Maybe you'd have banned the lnternet to keep the libraries open.
Technological advancement is the next and greatest threat to middle-class America. Google, Apple, Lyft, and Uber are all researching self-driving cars. Tesla has them in production and on the road now. The occupation of cab driver/chauffeur is is about to become an endangered species: that is some 180,000 jobs potentially lost.
There is also testing going on right now for automated trucks. In the not too distant future that 18-wheeler next to you on the Interstate may not have a driver in the cab. That is 3.5 million jobs that could be lost to automation when this technology matures. Maritime shipping and railways could be automated as well, adding to the number of potential jobs lost.
In a recent opinion piece in the Guardian, Stephan Hawking states:
The automation of factories has already decimated jobs in traditional manufacturing, and the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.
This in turn will accelerate the already widening economic inequality around the world. The internet and the platforms that it makes possible allow very small groups of individuals to make enormous profits while employing very few people. This is inevitable, it is progress, but it is also socially destructive.
This is happening, and it will continue to happen in my lifetime (I am just a few months shy of 50). I have a son who will be 17 next month, and this will have a far greater impact on his generation than mine.
This will not cause an immediate financial crash. It will happen slowly, over a period of several years or decades. In essence it has been happening throughout human history; however, the number of service jobs alone that can and will be impacted by automation in the near future is almost unprecedented. For example, walk into any Panera Bread today and you will see automated ordering kiosks, or you can order from your table on your smart phone. How long will they continue to staff people as cashiers? Amazon is testing stores that have no cashiers or checkout lines at all.
This goes well beyond service jobs. In 2015 a study by McKinsey & Co. on automation had a startling finding:
[R]esearch suggests that as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies. In the United States, these activities represent about $2 trillion in annual wages. Although we often think of automation primarily affecting low-skill, low-wage roles, we discovered that even the highest-paid occupations in the economy, such as financial managers, physicians, and senior executives, including CEOs, have a significant amount of activity that can be automated.
Think of that: with existing technology, not things that are in the realm of science fiction, 45 percent of existing job functions could be automated. While this would be good in the short term for the businesses that do automate that much of their workforce, it is not so good for the people who lose their jobs to automation.
In 1914 Henry Ford doubled his workers’ pay. He did this for two reasons: one to retain workers, and two, so that his workers could afford to purchase the vehicles they were manufacturing. If jobs keep being automated, how is the guy who used to build 747s going to be able to afford a ticket to fly on one?
How will that truck driver find the money to purchase the food that used to come in on the truck he drove? This list could go on and on. In some ways, one would hope that all of this automation would make our world a utopia, one where we could focus on the things that feed our soul instead of working just to survive from one day to the next.
If we plan for this, if we come up with innovative ideas like universal basic income, we should be able to ride this wave out and humanity will be better for it. It should not be too hard—after all, we have kept the libraries open in the age of the Internet.
However if we don't—well, to paraphrase the words of Detective Spooner: the little guy, is about to be shit on.