In light of the political situation in several developed democracies, many analysts have drawn renewed attention on the latest, largely worrying impacts of technology on the labour market.
Automation has been destroying low-skilled jobs for a long time, but now even high-skilled and professional jobs are being commodified by digital technologies. Accountants and lawyers are increasingly replaced by computer programs. In the future, experts systems will be able to make medical diagnoses and other very complex tasks, further substituting human jobs.
While destroying old jobs, the Knowledge Society is not creating many new ones for people with high education and skills. As a result, the income of the better educated has remained stagnant during the last years. In contrast, the income of top CEOs has skyrocketed.
Although automation and technology in general doesn’t seem to be the only drivers that have fostered the rising income inequality experienced by developed economies in the last decades (see T. Piketty, 2014), they are likely a major force. New technologies seem to have created a “winner-take-all economy”, which rewards the few high-tech entrepreneurs with the talent and luck necessary for success (Brynjolfsson & McAffee, 2014). These “superstars” would join the “supermanagers” and financers as the big winners of the nascent “Second Machine Age”. The high-tech entrepreneurs don’t need a large workforce or building, or too much capital in general, but innovative ideas for products and services and a good business model.
In the economy we have known, there have been one or two market leaders and a number of inferior sellers that also have a market for their products. But now technology –digitalization, telecommunication and networks- allows each seller “to cheaply replicate his or her services and deliver them globally at little or no cost”, so “the top-quality provider can capture the whole market” (ibid.) We are no longer surprised when we learn that the creator of a social network, web service or a new software has become immensely rich in record time.
All these processes seem to have decisively contributed to the increasing concentration of wealth in the very top of the income distribution –in some countries, in the top 1%.
The possible consequences are disturbing. As the political scientist R. Inglehart (2015) wrote, “as expert systems replace people, market forces alone could conceivably produce a situation in which a tiny but extremely well paid minority directs the economy, while the majority have precarious jobs, serving the minority as gardeners, waiters, nannies, and hairdressers—a future foreshadowed by the social structure of Silicon Valley today.”
--What is your opinion about these diagnoses and forecasts on the impact of technology on people’s jobs and incomes?
--What are your thoughts and ideas about possible solutions, including potential government policies that could be implemented?
Bibliography
Brynjolfsson, E. & McAfee, A. (2014): The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. Norton: New York.
Piketty, T. (2014): Capital in the Twenty- First Century. Cambridge: The Belknap Press of Harvard University Press.
Inglehart, R. (2015): “Inequality and Modernization. Why Equality Is Likely to Make a Comeback”, Foreign Affairs, December 14.
https://www.technologyreview.com/s/531726/technology-and-inequality/
Agreed of what you stated, sadly these new technologies will create a big impact for vulnerable communities i.e. Indigenous People around world. As their sacred land are taken over by big corporation and mining companies. Poverty, famine and war over water resources will be the biggest issues we will be facing and I am saddened for the future of our next generations.
Dear Mr. José Eduardo Jorge!
I also agree with your view and your concerns. Much depends on the political environment - whether populism will take over. I do not know any general solution but at least in the EU they might try to go on with deeper economic integration. Actually there are 5 different scenarios published as of 1 March 2017, author: Peter Foster - the Telegraph, available at :
http://www.telegraph.co.uk/news/2017/03/01/revealed-jean-claude-junckers-five-scenarios-future-europe/
Yours sincerely, Bulcsu Szekely
Increase in my technology use produced an incrrease in my working hours, check your concern experimentally
I think that the main impact does not come from the advance of technology that historically occurs, but from the logic that follows the production system has more impact on the generation of jobs and income, technology is like an extra tool.
Workers earn money with which to buy products and services. As technologies replace workers, we must remember that automation also drives out customers. This cannot continue indefinitely.
Note that workers pay taxes on their earnings. Automated equipment does not pay taxes. What if they did?
Let's tax the value added by automation. The value added by automation would be the total value added by the product or services minus the value added by workers. The value added by workers should be approximated by their wages.
As employers pay wages that are less then the value added by their employees, this would by this formula increase the tax on automated equipment.
The tax on value added by automation can be used to reduce the taxes on wages and provide government aid and assistance to those displaced by automation.
Congress needs to address this.
Dear colleagues:
Thanks for your interesting answers.
Dear @Donald:
I agree with your idea that taxation is a logical step towards a possible solution to the problem.
Dear @Bulcsu:
Very interesting link !! The European Union has been monitoring these trends. The research project Growing Inequalities’Impacts (GINI), which is financed by the EU, has produced comparative analysis and in-depth country studies on the evolution of inequality during the last 30 years, its drivers --including technological change- and impacts.The results were published in two books and a number of papers (see link below) .
http://www.gini-research.org/articles/home
"In the coming years, robots will replace millions of people in practically every area of work, and it will become increasingly harder for many people to find new jobs. The government will have no choice but to provide people with a basic income".
"It will likely take a 100 years to maybe 200 years to completely replace most jobs with technology. It may never fully complete perhaps leaving 1% or 10% of the population having to perform needed tasks (not work per se, not employment per se because these concepts may cease to exist in the post capitalist economic model)."
Aaron,
Providing people with a basic income and demaning nothing on return would demotivate most peoples to move from their bed in the morning. This would be total disaster. Providing people with free education and training them as innovator and providing them with all kind of incentive to motivate them is the way to go. Those that are not motivated should then do the boring jobs. Nobody should be paid to do nothing.
How about looking at the opportunities and not only the challenges?
While I agree that a number of professions will simply cease to exist why do we deem it impossible for those affected to seek a new orientation? Payment for nothing is as Louis points ot not a satisfactory arrangement. Surprisingly only an absolute minority is "lazy" and humans need a meaningful challenge in their lifes.
Free education and the challenge of innovation as well as new frontiers will, one way or another provide incentive for enough people. If incentives are directed towards such an end, I am confident that "free consumption" is not the end of times but the beginning of true self-fulfilment for all of us.
Kind Regards
Roland
Louis and Roland,
I agree with you that free subsidized living has also its bad side for society. Practically, in spite of your warning, the trend of laziness is here already and increasing as civilization progresses, e.g., see the homeless and poverty community increase in proximity of our human capitalistic culture. But those interested genuinely in positive fulfilling activities such as sport, research, arts etc. will carry on the human evolution even without wages.
My recent piece with Brookings on this subject:
https://www.brookings.edu/blog/techtank/2017/02/28/work-and-social-policy-in-the-age-of-artificial-intelligence/
What will happen with employment if technology keeps replacing human jobs? What should be done?
In the short term, technology / automation can disrupt employment causing loss of jobs etc. But in long run the workforce market will be self-corrected based on demand & supply principle. Meaning workers will opt for other jobs that need technology / automation management or exploring other new job opportunities as the old jobs are no longer in demand. This scenario happened before in our history e.g. in the 19th century's industrial revolution whereby manual labors were replaced by machines & workers during that time needed to up skilled or switched their jobs.
You can also refer to the following RG link on similar question asked.
https://www.researchgate.net/post/Can_we_consider_automation_as_the_enemy_of_employment/17
I am not sure that the replacement of jobs eliminated by machines with up-skilled jobs running those machines that we saw in the past is applicable to the current situation.
We tax the value added by employees when they pay taxes on their earnings. But we don't balance that with taxing the value added by automated equipment. So the automated equipment has an unfair advantage.
This will eventually drive out the money that workers need to buy the products and services.
The value added by automated equipment can be estimated by the total value of the product or service minus the value added by workers. A lower estimate of the value added by workers is the wages they are paid. Employers probably don't pay in wages the total value added by employees.
But this will be compensated for when we attribute the value of automated equipment to the total added value of the product or services minus the wages of employees. This will initially over tax the automated equipment. But eventually this might balance out.
Its the human who are developing that technology which enhances the operational capacity of machinery and it works more than human. It mean the human mind work more than that technology. hence i believe that technology cant replace the developed and skilled human. Butt the demand of unskilled will fall due to increased use of technology
Machines need to be design, built, install, and maintain by humans but it needs less human to do so than the jobs the machines are replacing. There would be no point building them if it was not the case. But the work that only human can do is and will always be illimited, i.e. more than we have people. There is always more to do than we can do and machine can do. Our needs are limitless. Our imagination has no limits. So our potential jobs are also limitless. Our problem is a social problem of re-organisation, of creation of new financial/economic models for these new human activities to enter the economy. It is a political problem and since politic is controled by the existing financial power of the old economy, then they resist these changes. Social crisis need to happen for forcing the changes.
Dear all:
I agree with @Louis that we face a political problem, since market forces alone may well lead to the dystopian scenario of an extremely polarized world of 1% against 99% (or so). I'd like to share @Hsn's optimistic view, but as @Donald argues, it seems that the emergent economic system won't create spontaneously the jobs to compensate those it destroys.
Brynjolfsson & McAfee are not overtly pessimistic and suggest that we humans should do what we do best: think, be creative, and "race with the machines".
A human chess player cannot beat a computer, but it seems that a human working with a computer usually beats another computer. The solution, however, could be just temporary.
http://blog.ted.com/race-with-the-machines-erik-brynjolfsson-at-ted2013/
http://www.newyorker.com/magazine/2016/12/19/our-automated-future
Hi everybody.
Create technical positions for research and development, also space for maintenance and especially for technological recycling.
On the other hand, it is still exceptional that everything in the future gets replaced by technology, the human being in his spirituality still needs values.
good considerations on this topic - cf. Klaus Schwab (2015) "Fourth Industrial revolution"
Artificial intelligence, if applied responsibly, could benefit society," the authors write. We must remember that AI is broadening and enhancing what it means to be human if it is applied ethically.
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