I’ve blogged before about the job destroying impact of automation and robotics. Once a machine can do a job, it’s gone. Peter Coy of Bloomberg has a different take. He believes humans and robots will work together in a future society. Robots will do work that is rote and mindless. Humans will perform tasks that require creativity and emotional response.
Hopefully Coy is right, but I’m more pessimistic. Coy talks about the improvements in voice recognition software. How many phone sales and customer service jobs have been lost because of this innovation? How many more will be lost in the future? Similarly cloud storage is enabling companies to cut staff that manages network and IT support functions. Driverless vehicles, when they are perfected (not if), will push many workers out of a job.
I hope the optimists like Coy and many smiling futurists are right in predicting work will become more creative in the age of robots. I’m less sanguine. As Coy states, too many jobs involve rote tasks that can be automated. I grew up near the steel mills in Cleveland. Within ten years, 4 steel mills were closed because European competitors sold cheaper, higher quality steel produced with automated functions. The city was devastated and has never fully recovered. That was industrial automation. Now the service industry and professional services are being automated. What sane employer will pay an employer if she can invest in and profit from a much cheaper, more efficient robot?
While this month’s employment report again showed more jobs being created and a falling unemployment rate, wages dropped. According to past trends, wages should go up as labor becomes scarcer and companies want to retain productive employees. Former Labor Secretary Robert Reich analyzes this situation in a recent blog post. Reich points to factors that can hold wages down even as unemployment shrinks. Two main culprits are the global economy and automation. Companies can offshore cheaper labor, and they can find new ways to let technology replace humans. Reich scoffs at those who call these factors “efficiency.” Reich concludes by blaming both large corporations and Wall Street for holding down wages. I’d agree with him and add one more culprit: spineless politicians who serve Wall Street and large corporations. Nothing will change until our politicians and laws provide some protection for American workers. Or, to put it another way, nothing will change until American voters elected politicians who represent the interests of working people.
Buzzfeed reports on an interview between Goldman Sachs CEO Lloyd Blankfein and Andrew Ross Sorkin of the New York Times. The good news is that Blankfein recognizes the problem of inequality. The bad news is that he implies that it will get worse. He talks about a new economy that will employ labor in “new ways.” From capital’s perspective, that means the best return for investors, which has traditionally result in process improvements, automation, and offshoring. I’m not condemning Blankfein. As a leading investment banker, he is saying what he should. Working people and unions need to walk up to this reality, or the current good news on the job market will be temporary. We need a real workers’ bill of rights that provides realistic security for labor as well as capital.
Huffingtion Post (via 24/7 Wall Street) examines a serious problem facing working people: occupations that will no longer exist. As technology and processes improve, companies have been able to do away with people who perform tasks that can be automated.
The article cites the U.S. Postal Service as one example of a company that has been impacted by new systems. As more people use email and online systems for paying bills, there is less and less need for postal carriers and workers to process the mail. While this example is good, it does not address even more frightening scenarios for the job market.
What if businesses no longer needed to hire people to drive or wait tables? In the past few months, I’ve read articles that suggest that both of these occupations could go the way of the unicorn. Rather than have a waiter present the daily special and take orders, diners would make their choices on a tablet, and expeditors would bring the food/clear the tables. I don’t know if this system is practical given the waiter’s role in sales and customer service, but the system is plausible, especially for restaurants where service is less of an issue than price. I’ve also read articles that claim driving jobs will be gone by 2050 due to computerized vehicles. Imagine if all the people who held jobs as drivers and waiters were suddenly unemployed. I frequently criticize companies for paying low wages, but that is preferable to having an economy where machines do all the work.
What can we do? I don’t know. We can fight moving jobs to other countries through legal actions like tariffs and by economic nationalism (Made in the U.S.A.). I don’t know how you fight technology and progress. If a company can improve its business through innovation, it will do so. If it doesn’t, a competitor will do so. The problem of lost jobs (occupation extinction) is serious, and – like climate change – too many people are ignoring it.
The media is often overly negative in talking about the job market. Sometimes I fall into the same trap. Yesterday I talked about jobs being lost to automation, which is a big problem. However, there is another side to the story. In just this week, I have worked with clients whose jobs were created by new technology. One person was a social media community manager. The other worked on Cloud technology and software that is not stored on our computers. While it is important to criticize problems caused by technology, we also need to recognize that some jobs will be created by advances in technical systems. One way to win the job game is to find a way to take advantage of those changes
I was shopping at a local grocery store (Jewel-Osco) today and noticed that the self-checkout aisle had been closed. The woman at the checkout counter told me that the corporation has scrapped the machines. This is good news because it means that new cashiers will have to be hired, and this chain hires union employees, so the jobs will be decently paid.
As I’ve written in the past, automation has destroyed more American jobs than offshoring. In this case, a company has decided to pay people rather than invest in self-serve machines operated by consumers. This is a small victory, but it is still a win.
I love baseball, and this weekend I attended minor league games in Indianapolis, Nashville, and Louisville. While in Louisville, I took a tour of the Louisville Slugger Museum, which features a working factory that makes bats for big leaguers and recreational players. During the tour, we learned that from the 1880s to the 1970s, bats were made by hand. They were the work of craftsmen who used their hands and eyes. A good bat maker could carve a bat in 20-30 minutes. By the late 1970s an automated process was devised with a new lathe that could carve a bat in 30 seconds. Great for the company, not so good for the men who worked the lathes.
This story underscores the impact of automation on work. One of the lathes at Louisville Slugger could cut more in an hour than a man could do in a day. No sane business would continue to work in an inefficient manner. Layoffs were necessary. Similar advances have led to millions of layoffs in manufacturing, assembly, and supply chain. Better technology means fewer jobs. No company can stick with people when machines can do as good or better a job at a much lower cost. We all love innovation, but we have to look realistically at its aftereffects. Faster, cheaper, and more efficient usually means people will lose their jobs. The challenge is to generate new jobs in a world where machines, software, and automation are improving all the time. What will we do if a time comes when we have more people than jobs?
[On Sundays, this blog explores diverse issues. Today we think about life when there is no work.]
The Real Job Killer
As humans, we want to be in control. When something goes wrong, we look for a cause, and – too often – we blame other people. One of the areas where this is most prevalent is job loss. In the current debate about immigration, opponents of reform claim that undocumented workers are taking jobs from Americans. To some degree that claim might be true. However, it’s equally true that immigrants have traditionally done the work that nationals don’t want to do, menial tasks with low pay. We also blame outsourcing to other countries. Again, this is a piece of a bigger problem, an important piece and one that should be addressed by politicians in Washington (Buy American!).
The real job killer is something we all love and can’t do without: technology. From the invention of the wheel to the iPod, humans have looked for a better way to work and more ways to live comfortably. In the age of the computer and advanced technology, those same innovations have led to work processes that need fewer and fewer people. Think about the self-service options we now have. Whether you’re pumping your own gas, ringing up your own groceries, or buying tickets for travel or a movie tickets online, you’re doing work that an employee once did. Similarly, automation has led to incredible efficiencies in manufacturing. In one of his State of the Union speeches, President Obama pointed out that steel mills that once needed 1,000 workers to operate now only need 100. Great for technology and profit, not so good for working people.
Technology moves forward like a steamroller. It doesn’t go backward. Jobs can be brought back to the U.S. from China or Mexico. We cannot undo automation or the ability to work remote via our computers and smart phones/tablets. Social scientists once predicted this trend and thought it would mean people would have more leisure time. They were wrong. Instead, too many people, especially those who are poorly educated, cannot work in the new system.
What can be done about this problem? I don’t see a simple or fast solution. Too many people are making money off the current system. Too often those most affected are poor and powerless. We blame them and label them as “takers.” I believe the first step to a solution will be to stop blaming people and really analyze the problem: How can we enjoy the benefits of our technology and still have work for people?
Writing in Huffington Post, Jeff Jarvis argues that the future will be “jobless.” Technology and efficiency will make traditional business models as extinct as dinosaurs. He cites several industries and demonstrates that fewer people are needed to do “job” work. Instead, Jarvis puts his faith in entrepreneurs in a way that is similar to Seth Godin’s arguments in Linchpin.
I’m a big fan of Godin, and I agree with most of what Jarvis says. However, my outlook is much darker when it comes to technology and employment. Even entrepreneurial models are employing fewer people. Compare Subway to McDonald’s. The sub shop runs with a much leaner crew and lower overhead than does the king of burgers. Better still, let me talk about two businesses where I live, Andersonville, one of Chicago’s great neighborhoods.
George’s Ice Cream will employ 4-6 employees at any time, and they are hustling to make cones, sundaes, and shakes. Yogurt Avenue opened a few months ago. It is located three blocks north of George’s, and its business model is self-serve. Customers pour their yogurt, top it as they wish, and put it on scale where the only employee in the store weighs it and rings up the sale. What could be more efficient? What could be more deadly for an economy in which people need to earn cash?
The story of John Henry is a great fantasy. When a human competes against the machine, put your money on the machine. Before they were laid off, several of my clients have been creators of automated systems and software that help companies be more efficient and profitable. These innovations do nothing to create work. In fact, their success can be measured in this happy image: “reduced head count.” Call it jobs or entrepreneurship, the opportunity to earn a living has become harder because of technology. In the future, it will be worse, much worse. “Soylent Green is people!”
I found a frightening article in the food section of today’s Chicago Sun-Times. David Hammond, the “Food Detective,” talks about the prospect of a world in which restaurants would not have waiters. Instead of placing an order with a person, we would place our orders via a hand-held device. Hammond says that this system would not work for high-end or low-end restaurants, but would be a good alternative for mid-level, casual restaurants (I’m guessing he means places like Fridays) where waiters often don’t care about their job.
From the perspective of the diner, Hammond’s outlook works, and I share his dislike of service that comes with a scowl or shrug. However, from a jobs point of view, this news could be catastrophic. We have adapted to do-it-yourself service at gas stations and at grocery/drug stores. How many jobs will be lost forever if restaurants find a way to go to do-it-yourself menus? If consumers accept this technology at mid-level restaurants, it will find its way up and down the food chain. It’s safe to assume that millions of jobs will be lost with people replaced by machines. Technology makes our life easier – except when it takes jobs away, and it’s doing that more and more in our self-service world.
- 1 of 2
- next ›