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.