Economic automation – What is it and is your job safe?

What is economic automation?

Economic automation is the endeavour to reduce human intervention within economic process to a minimum using technology and robotics. For thousands of years our economy has sought to innovate and automate. From simple farming tools hundreds of years ago to conveyor-belt robots today.

However, the drive towards ‘hyper automation’ and robotisation has never been as intense or deliberate as it is today. While futuristic predictions of robotic revolution have not yet come to fruition, billions of dollars are being pumped into the development of new economic technology.

Today, corporations are working to design robots that can function in a whole range of careers – from classroom teachers to chefs. Last year, Uber successfully tested their first in a new line of self-driving trucks. The Truck drove 200 kilometres to make a successful delivery.

Why are people worried?

While all this sounds somewhat exciting, huge concerns are emerging regarding the threat automation poses to jobs. It is the working and middle classes who have the most to fear. Research carried out in the United States found that it was jobs considered to be ‘low’ in skill level and those that required manual skills that were at greatest risk of elimination. 83% of those who earn under 20 dollars an hour and 31% of those who earn between 20-40 dollars an hour were in danger of losing their job to automation.

Already, many workers now earn less, in real terms, than their parents did. In the US, Median earnings for a man without a high school diploma fell 20 percent from 1990 to 2013. Over the same period, earnings for women without a high school diploma dropped 12 percent.

Indeed, some politicians are beginning to take the threat of corporate automation seriously. Barack Obama used his farewell speech to warn his audience that: “The next wave of economic dislocations won’t come from overseas. It will come from the relentless pace of automation that makes a lot of good middle-class jobs obsolete.”

Could it be a good thing?

Contrastingly, radical free-traders maintain that automation is a universally positive phenomenon. While automation has certainly destroyed some jobs it has usually replaced them in a new and different form. Consider the invention of ATM’s. While they immediately rendered the role of bank tellers immaterial, they allowed banks to cut costs and reinvest in other areas of their business. The jobs of the tellers morphed into that of salespeople, promoting the new products the enlarged corporations could now afford to offer. Sandy Ikeda, professor of economics, insists that: ‘In a system where people are free to innovate and to adjust to innovation, there will always be enough jobs for whoever wants one; we just won’t need to work as hard in them’.

Further, could automation mean we all have to work less as machinery does most of our heavy lifting? If so, that would leave us with more time to invest in our friends, families and wider-society. Hans Rosling uses the example of his family washing machine. Without it, he insists, his mother would never have had the time to read to him and he would not have developed the knowledge he needed to be the scientist he is today.

One idea that has returned to fashion is that of the ‘Universal Basic Income’. Under such a scheme, each citizen would be paid a base income by the state irrespective of any work they carried out.  That way, even if they were unable to find work in an automated economy they would have their basic needs met. This would be financed through the increased profits derived through automation.

What does the evidence tell us?

Nevertheless, there is increasing evidence that hyper-automation will reduce the total number of jobs – threatening people’s livelihood. Instead of automation simply reforming labour practices it will eventually make labour redundant in the creation of wealth.

Professor Lipson, one of the World leaders in technological development, acknowledges that automation will lead to a reduction in the net number of jobs. Even self-declared ‘techno-optimist’ Bill Gates has stated that he believes governments need to increase taxes on companies using robots to: slow down the spread of automation.

Oxfam recently revealed that the 8 richest men in the World own as much wealth as half of humanity. Automation will drastically exacerbate already out of control Western wealth disparity.  As initial wealth and capital is required to design and create economic technology, this means it will be owned by a select, wealthy few. As the owners of this expensive technology no-longer need human labour, this will concentrate and monopolise wealth creation.

We only need to have a glance at our past to see that the spread of automation has not led to stronger family outcomes, but weaker ones. Moreover, can we be sure that automation will be confined to the economic sphere? Is the idea that a robot might read a child their bedtime story instead of their parents really a positive one? As for the idea we might have to do less work, the opposite is true. As technology is operational 24/7, we will be forced to increase hours and input to compete with it.

Universal Basic Income sounds rather fantastic. A set income guaranteed by the state, whether we choose to work or not. In reality, it is nothing more than a cash bribe offered by an economic elite to placate those no-longer considered to be productive or meaningful members of society. There is more to work than contributing to economist’s spreadsheets and the profit-margin of business owners. We’ll be far wiser and happier as a society if we strive for meaningful jobs for the many as opposed to increased profits for the few.

Typically, ‘productivity’ is measured by economists as the amount of output created by a certain amount of labour. This means the less human labour used, the more productive something is. Instead, we should measure productivity based on how beneficial the economic task is to the individual completing it, and to his or her family and society in general.

How will you be affected?

Most people reading this will be well-educating and ‘soft-skilled’, and it’s true that in the short-term your job is safe. Nonetheless, the rate of technological advancement is remarkable, and technology can now be trained to do increasingly complicated and ‘human-like’ roles.

Granted, if we don’t stand up to automation, your job might not be the first to go. But, it probably won’t be the last.