An Unemployed World (Part 4)

A Society of Unemployed People

(This post is part of a series. Please read Part 1, Part 2, Part 3)

In the previous parts, I have hypothesized that, for various reasons, the economy is moving along a trend that will use more automatic and robotic labor and less human workers, thus leading to an increasing portion of the population being unemployed. This trend has been discussed by researchers around the world and is definitely not my own idea. In this part, I would like to ask the question: how will the economy and the society look when this happens?

Let us start with an assumption (which will be revisited later). Suppose 80% of the population is either chronically unemployed or chronically underemployed, namely working in part-time and temporary jobs with long spells of unemployment in between. How will society react to this case? How will the economy look? Will we see significant changes in the political map? Will we see new political movements rising?

In the previous part, I claimed that one's perception of self is founded, in part, on their work. Our jobs give us a sense of pride, fulfillment, even purpose, and we often describe ourselves through them. For example, in a small talk with an unknown person one may introduce himself as "I am a salesperson in this tech company" much sooner than "I am a married 40 years old man with 3 kids and a house in the suburbs".

So, if 80% of the population find themselves without a satisfying, long-term, well-paid, stable, job, how will we introduce ourselves? Perhaps we will use George Costanza's opening: "My name is George, I am unemployed and I live with my parents"?



More seriously, how will the lives of the 80% of unemployed be spent? Nowadays, we spend between a quarter and a third of the hours in a year working, and even more if you take into account hours spent commuting to and from work and hours spent at home replying to emails or business phone calls. Without this amount of time, we will need to find a way to fill in large gaps of our lives, something to do.

One such option is a kind of Huxley's "Brave New World":  a world where everyone is engaged in an ever lasting cycle of recreational activities, consumes drugs, and is constantly bombarded by mass media outlets that produce an endless stream of entertainment. However, robots are the parallel of the lower-level castes of Huxley's world, and do all the work. There is an everlasting abundance of products in the world, brought about by the cheap labor of the automatic machines. Perhaps people will escape to the comfort of the virtual world described in Stephenson's "Snowcrash" and live parts of their lives as avatars in a virtual world without the need to see the sordidness of their real lives. Will society be able to move in that direction without preconditioning of the human to a life of idling by?

Another option is a world of constant social tension between the 80%, who constantly live in unemployment, poverty, boredom, and barely scrape by and the other 20%, who live in a world of unimaginable riches. For the latter, there is little competition and they get to share the spoils of a highly productive economy that produces everything cheaply. They earn nice salaries based on their abilities, which cannot be replaced by robots, yet consume at prices driven by the technically unlimited supply and very limited demand. They enjoy lives of abundance, probably in gated communities patrolled by robots (see also "Snowcrash"), islands in an ocean of constant turmoil, insecurity, riots, and struggle.

Obviously, there are options in between these two extremes. I believe the answer to which of the extremes the world will to turn depends a lot on the choice of policies made early on in the process. On one hand, there is a policy of complete socialism, where every person is entitled to the minimum needs in life: shelter, food, education, health, etc. On the other hand, we can consider a policy of libertarianism: each for his/her own, no social safety net. One may be reminded of the clip showing former Governor and presidential candidate Mitt Romney's comments about the "47%":



It doesn't matter what we think about the governor's words, we must realize that this debate will increase in a world where 80% of the population is unemployed and constantly need help from the other 20%. Inevitably, the choice will be either to support the majority of the population that need help, at the cost of higher taxes, or abandon them to a life of struggle. It will be a choice between ruthless social Darwinism vs. a very demanding socialism that taxes heavily the rich in order to support the majority.

At this point, I would like to revisit the assumption of 80% unemployed. An economist (I am not one) might ask: how is it possible that there are so many unemployed? Doesn't it mean that there is, essentially, a large pool of potential-workers that will eventually put a pressure on lowering wages so that people will be able to compete with robots to win back some of the jobs? My guess is that the answer to that is negative. First of all, I want to recall the previous part, in which I claimed that if someone knows with a high level of certainty that they will never get a job, there is absolutely no reason for them to go to school in the first place. So, theoretically, people will be less trained than robots!

Even if this is not the case, and suppose all people are skilled at least to the point where they can compete with machines, this will still be an unfair competition between people, whose wages cannot be lowered below a certain level that will at least provide them the very basic life needs, and machines, whose only need is energy. Machines do not need to rest, they can work 24 hours a day, 7 days a week, at the minimum cost of power and maintenance. Recall the video showing a robotic assembly line in a Toyota car plant: there are plenty of valid reasons why robots are used there and not human workers.

Thus, we end up with a large portion of the population being excluded from the jobs market by means of their low skills and inability to compete at the minimum wage level. There will still be people that work, for various reasons mostly requiring levels of abstract thought and nonlinear imagination that it will be impossible and impractical to train machines to have. Of course, some of the employed 20% will also be the capital owners: those who own the means of production and reap the profits of the unlimited production levels.

Will society change? I am quite positive that it will.
Will the economy change? Again, quite positive that it will.
Will political structures change? I don't know.

Epilogue

I started thinking about this topic a few months ago, after reading some work about the subject by an MIT labor market professor. I was recently reminded by an NPR show called "Ted Radio Hour" with Guy Raz. The relevant episode is "Do We Need Humans?". I highly recommend listening to this show and following the Ted Talks mentioned in it.

I want to add that I don't know what will happen. Everything that I wrote in this four-parts blog post is my own thoughts based on a little reading and listening. I may be completely off or somewhat onto something (I am certain that I am not dead-on correct), but the main reasons why I wrote the whole thing were: (1) I wanted to organize my thoughts and (2) I wanted others to stumble upon it and think about this possible future of ours. Perhaps, if we dedicate enough thought to it, we will find a way to work some reasonable future for the whole of us. So, please share this around, comment about it, and engage your friends.

Thank you for reading all the way through. I hope it wasn't too boring.

And I will leave you with this clip from the movie Wall-E.

An Unemployed World (Part 3)

The Sense of Self

(Note: this is part three of the post. The first two parts are here and here).

In the previous part, the conclusion was that many jobs that are currently performed by a human being are likely to be performed by a robot in the future. Robots constantly become cheaper to develop, use, and program and are gradually becoming more adept at performing complex tasks in unstructured environments. This, with other trends, will tend to reduce the workforce participation rate and lead, over time, to situations in which a minority (perhaps even a small minority) of the population is employed whereas the majority in chronically unemployed.

How will this affect the perception of oneself? How will this affect one's choices in life?

There are definitely several ways to examine this. One way to consider this is as an opportunity for a positive development: more free time to spend with our family and friends, doing things we love to do, perhaps taking a better care of ourselves and our health, doing some sport, etc. People will have more time to think, analyze, read, engage in philosophical questions (maybe even harass other people with blog posts like this one!), and, generally in self-development. This is definitely the way Wired Magazine preferred to end their piece (http://www.wired.com/gadgetlab/2012/12/ff-robots-will-take-our-jobs/all/):

This is not a race against the machines. If we race against them, we lose. This is a race with the machines. You’ll be paid in the future based on how well you work with robots. Ninety percent of your coworkers will be unseen machines. Most of what you do will not be possible without them. And there will be a blurry line between what you do and what they do. You might no longer think of it as a job, at least at first, because anything that seems like drudgery will be done by robots.
We need to let robots take over. They will do jobs we have been doing, and do them much better than we can. They will do jobs we can’t do at all. They will do jobs we never imagined even needed to be done. And they will help us discover new jobs for ourselves, new tasks that expand who we are. They will let us focus on becoming more human than we were.

I would really like to subscribe to this notion of a better world, more free time for each person, and general improvement of our lives, but I am not convinced that this will be the case. Call me a pessimistic (which I am!), but I tend to see the empty half of this glass, and there are several reasons to be concerned about having too much free time and no job to fill our lives.

The behavioral-economist Dan Arieli writes in his book "The Upside of Irrationality" that whenever he is on a plane and starts chatting with the people sitting next to him, they often ask or tell him about what they do for a living long before they exchange names and business cards. Long before people talk about their lives, kids, hobbies, or political beliefs, they feel free to talk about their jobs. In a sense, one's occupation is something that he or she feels define them as a human being. It might be so, because it is a more "remote" thing than talking about your personal beliefs or current difficulties with your spouse and kids, but the fact that it comes up so quickly in the course of a talk means that this is an important aspect of one's life.

And why wouldn't it be? Out of 8760 hours in a (non-leap) year, an average OECD employee spends between 1600 and 2200 hours at work (http://stats.oecd.org/Index.aspx?DatasetCode=ANHRS). These are just "official" work hours, not including the ones we spend at home answering emails on our smartphones or on the road commuting to and from work. That's between 20% and 25% of our total annual hours. If you add sleep into the equation, we spend the majority of our time either sleeping or at work, or commuting between home and work. So, certainly, work has an important role in our lives.

Moreover, work also gives us a sense of self-definition. Most occupations require some sort or another of mental and physical stimulation. It also involves interactions with other people, bosses, colleagues, customers, supervisors, etc. We form bonds with these people, and these bonds become another social network in which we are involved. We also talk about work with our other social networks, our family and our friends, and exchange anything from funny stories to discussing serious problems at work, concerns, etc.

Even before we lend a job, in many cases we are required to undergo training and schooling. Many occupations require skills that are acquired in a college or university, and even those that don't still require some high school education. Most of us end up spending between 12 and 16 years of our lives just to get the minimum requirements to even get a job. And while doing so, we weave our most important social networks and learn the most fundamental social skills. It is often said that friends that you make in high school and in college are the ones that will be with you for the rest of your life, and, personally, I find it to be correct. Sure, you go on to make more friends (and lose some) as you move on with your life, but still many of my best friends are the ones I made at an early age.

Now, ask yourself "what would happen if I didn't have any prospect of getting a job ever?". In a world where only a small minority of people are employed, this is a reasonable question to ask. After all, why do you think you should be one of the lucky 30%, or 20%, or even 1% of employed people? Will you try? Will you compete to be one of the lucky few? Or, will you give up? And if you do give up, when will it be? Will it be after college or before starting elementary school?

From the economical point of view, if one knows (with a high level of certainty) that they will not get a job, it makes sense not to invest in trying to get it in the first place. These investments require time, effort, and most importantly cost money, which, if you don't get a job will not pay off in the end. This is an alarming thought, because it means that when the balance between employment and unemployment is tilted, more and more people will be likely to give up, and give up early. Sure, there will always be the competitive ones, the ones that will strive to be the small minority that wins the few jobs left to go around, but more and more people will not, or will give up while trying. What will happen to them? How will they feel?

At this point, one might think that I am delusional and that this will never happen. I am willing to accept that, but I have some evidence in my favor. We already see a growing population of young, unemployed, skilled workers in many developed countries. In the US, unemployment rate among 16-24 years old people is 16.2% and it is an even greater problem in countries like Greece (60%) Spain (above 50%), Portugal and Italy (above 40%) (http://www.foxbusiness.com/markets/2013/04/26/europe-more-divided-than-ever-over-austerity/). According to an AP report, about 53.6% of college graduates in the US, in 2012, were unemployed or working in jobs that do not require a college degree (http://www.cleveland.com/business/index.ssf/2012/04/half_of_recent_college_grads_u.html). As this graph shows, this is not a new problem, but the situation has been exacerbated in the last decade (even before the 2008 financial meltdown).

Unemployment Rates by Age Groups in the US, 1948-2012. Source: http://www.foxbusiness.com/economy/2013/05/09/youth-unemployment-grows-worse-by-month/

 In this sense, unemployment rate is more important than measuring the workforce participation, because unemployment rate takes into account just those that are actively seeking a job, not the ones that went back to school or gave up on trying. The next figure shows the total workforce participation rate by age groups in the US:

Labor Force Participation by Age Groups in the US, 1948-2012. Source: http://www.foxbusiness.com/economy/2013/05/09/youth-unemployment-grows-worse-by-month/

Despite the noise and natural fluctuations of the markets, both graphs show the same general trend: less young people are employed today than they were in the past. Some because they are in college, some just cannot get a job. In the future, these people will lack the experience and skills that are required for getting jobs, even if ones do open, and thus the trend will continue. After all, given a choice between a robot that is cheaper to buy and use and will never tire but lacks skills and experience, and a human that lacks skills and experience, costs more to employ and requires 8 hours shifts and 16 hours of rest, what is the obvious choice?

In summary, I am afraid that we are heading in a direction in which the majority of people will never be employed. They might know it in advance and will never even try or they might not know it but still fail in their attempts. In both cases, these will lead to personal difficulties: poverty, boredom, a feeling of being disenfranchised, a sense of failure, a lack of satisfaction one gets from work, a loss of social interaction, withdrawal from society, etc. I am afraid that if unemployment continues to grow, due to technological advancement, we will have to somehow find a way to help the individuals who will be left behind.

I will write about the possible effects on society in the next part.

An Unemployed World (part 2)

The Robots Are Coming

(If you haven't done so yet, please read the first part of this post)

We are at an age of incredible technological innovation, driven by the extraordinary increase in processing power predicted by Moore's Law. This not only allows more complicated software to run and process information, but also increases the capabilities of sensors and actuation devices. In simple words, this allows for automatic robots to sense their environment, process this information, make decisions, and act upon on those decisions.

Robots are not new, and their growing role in industry has started many decades ago. Car manufacturers use robotic assembly lines to reduce the cost of labor, increase throughput, and improve overall productivity.


So far, robots were expected to replace human workers in jobs that require simple skills, manual labor, and repetitive work performed in a structured environment. Such positions were deemed "easy to automate", and therefore easy to be replaced by robots. Obviously, there is the initial investment in development or acquisition of such robots, and the ongoing cost of using them, but that seemed to be cheaper than the wages of the Western worker (at first) and today even the lower wages in China (http://techcrunch.com/2012/11/13/foxconn-allegedly-replacing-human-workers-with-robots/).

And programming the robot is going to be fairly easy, if we take this Baxter robot as an example:
While it is not new that automation replaces manual labor, the array of positions, in which humans can be replaced by robots has been growing and will grow in the upcoming future. These will include positions that are less structured, less repetitive, and that require more skills and knowledge. Here are a few examples:

Unmanned aerial vehicles are not yet incorporated into the National Airspace, Google's has been developing autonomous cars that have already been proven to be safer than human-driven cars, and that have gained legal status in some states, including Nevada and California (http://www.cnn.com/2012/09/25/tech/innovation/self-driving-car-california). In the future, these vehicles may replace truck, taxi, or bus drivers.

Another less-skilled job that can be replaced by a robot is a restaurant waiter. One such example is from a restaurant in China, and although this robotic waiter is not performing every single task a waiter does, remember that it was developed more than two years ago!


What about jobs that require more of a human touch? Apparently, these can be done by specialized robots as well. For example, a humanoid robot that helps children with Autism Spectrum Disorders (ASD).

A similar project is a robot that teaches a second language to toddlers (http://mplab.ucsd.edu/wordpress/?page_id=277). 

Finally, the human worker's last resort is jobs that require the ability to analyze information in a context and make inferences regarding an uncertain situation. For example, the work that medical doctors do when they diagnose a patient, suggest treatment, and follow up on that treatment. There is a robotic medical doctor too, the famous Watson (http://www.theatlantic.com/sponsored/ibm-watson/archive/2013/04/how-memorial-sloan-kettering-is-training-watson-to-personalize-cancer-care/274556/).

In a recent article, Wired magazine categorizes all jobs into four classes:

Four Types of Jobs (from http://www.wired.com/gadgetlab/2012/12/ff-robots-will-take-our-jobs/all/)

So, what happens next? What will become of us, humans, once robots will be able to perform all the jobs in the world better and more efficiently than us? I will dedicate the next part of this to answering some of these questions.

An Unemployed World (Part 1)

Introduction

In 1900, 41% of the workforce in the US was employed in agriculture. This number has decreased to less than 2% in the beginning of the 21st century (http://www.ers.usda.gov/media/259572/eib3_1_.pdf). Yet, the productivity of the American farmer has increased so that there is no shortage of food, and, in fact, the USA is still a large supplier of agricultural products to the world. The main force behind these rapid changes and that allowed such an incredible growth in productivity is technology and automation.

Following the recent economic crises, a similar trend can be seen in other fields of the economy. For example, the share of the manufacturing sector in the overall employment has decreased since the 1970s, and while during each economic crisis in the US people were laid off, these jobs never came back to the US.

Manufacturing Jobs in the US, 1980-2013. The image was taken from http://media.npr.org/assets/img/2012/10/17/manufacturingshare_custom-abc7c2f2e24638873a2a2e18877ee41fc5aac45a-s40.png

Recent data has shown that overall in the US, workforce participation has decreased to its lowest level since 1979, which is particularly alarming since women participation in the workforce is higher than it used to be 50 or 100 years ago.

Workforce Participation in the US, 1970-2013. The image was taken from http://www.npr.org/news/graphics/2013/04/pm-gr-participation-rate-624.gif

There are several reasons for this trend. First, some sectors, manufacturing in particular, are sensitive to low wages in other countries, hence these jobs are lost in the US, but are generated somewhere else. For example, Foxconn produces a large share of all the electronic gadgets in the world, with a workforce of more than a million assembly workers (http://www.economist.com/news/business/21568384-can-foxconn-worlds-largest-contract-manufacturer-keep-growing-and-improve-its-margins-now).

A second reason is the aging population. Not only has the Baby-Boom generation reached its retirement age, but the number of children per mother has also decreased over the decades since World War II. In the 1960s, an average woman in the West had about 3-4 children, but nowadays this number is 2 in the US and France, and less than that in the rest of the Western countries. And with longer life expectancy, this means more elderly (65 years or more) people per working age (20-65) people. This reduces workforce participation numbers, and exerts a strain on social safety nets. (http://www.npr.org/blogs/money/2012/11/29/166181293/the-birth-rate-just-hit-a-record-low-thats-bad-news-for-medicare)

There is, however, a third reason, which brings us back to the agriculture data from the opening paragraph: automation, technology, and robotics. Throughout history, jobs had been replaced by technology, and humans reacted by moving to different professions, usually ones that required more skills and less manual labor. Yet, it seems that recent technological innovations will drive human beings even from these skilled positions and out from the market altogether. While the other two trends (globalization and aging) may not affect the global unemployment rate (as a whole), this trend does have the potential of making, essentially, every human being unemployed (http://www.npr.org/2013/02/25/172900833/do-we-need-humans).

This leads to several social and economical questions:

1. How will human beings live in an unemployed world?
2. Can society evolve in such a way that unemployment is the norm?
3. What will the future of the economy be if everyone is unemployed and unemployment is the norm?
4. How will these changes affect politics and policies?
5. How will these changes affect education?

In the next part I will look at several technological innovations that drive this trend. Then, I will try to provide some possible answers to the questions listed above. I definitely don't have all the answers, and I hope that this can be a platform to start discussions, so I will love to get some comments about these thoughts.