The future of work

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Many from working class areas of Britain voted for Brexit because they fear their jobs are under threat from migrants. Similarly support for Trump has been growing in parts of the US rust belt. And there’s a major divide, both sides of the Atlantic, when it comes to education. If you have a college degree, you are very unlikely to be a Trump supporter and less likely to have voted leave.

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Now it has to be said that the argument that migrants are taking jobs isn’t backed up by the facts. A strong leave vote was seen in the parts of the UK with the lowest number of migrants, while places like London with very high rates of migrant tended to vote for remain. Similarly, major US cities, where migrants tend to concentrated tend not to be the places where there is strong support for Trump. So either these migrants are holding down three of four jobs (and presumably being rapist, drug dealers and claiming benefits in whatever limited free time this busy schedule allows them), or the risk they pose is being vastly overestimated.

When I hear the story about how, oh I can’t get a job because the company down the road just hired a load of Poles/Mexicans who will work 60 hours a week for 3 bucks an hour, my response is A) don’t you think you should report that to the proper authorities? because its kind of illegal! B) leaving the EU ain’t going to help, you do realise Switzerland and Norway have more migrants per capita than the UK? C) In a globalised world, restricting the movement of labour will result in jobs moving overseas, so its foreigners staying at home and taking your job we need to worry about (far more jobs have moved overseas than have been taken by foreigners moving here) and D) do you have these guys number? cos I’ve got this bit of decking…..

But there’s an elephant in the room here that I think both sides of the debate are missing – automation and technology. In short, even if it were true that you’re in competition with Poles or Mexicans working for £3 a hour (which you aren’t, its just a neo-fascist myth), how do you expect to keep your job when you are competing against a machine that will do the job 24/7 for nothing?

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Like the frog in the saucepan, technology has crept up on us and we’ve not noticed. And yes it is changing the workplace as we know it . Think about it, when was the last time you rented a video? I’m guessing you get your video fixes from youtube or netflix these days? In fact when was the last time you saw a video store? Are there any young people reading this who need me to explain what a video store is? How about booking a holiday or flight in a travel agent? And I mean in an actual office, not online? Same with car insurance or other financial products. What about paying your taxes online? don’t tell me you actually take a day off work so you can go down the tax office and do in manually (obviously you’ve way too much free time!).

Online shopping is now much more common. And in shops these days various tasks are becoming more and more automated. We have those self service checkouts. Its conceivable in the not too distant future that shelves could be stacked by machine (we have machines that can do that already) or even provide customer service (yep, they’ve prototype machines that can do that).

Automated cars are now being developed and while I reckon it will be some time before they become a day to day reality (not because the machine’s aren’t smart enough, but because they have to share the road with dumb humans). But they are probably going to happen eventually, which will have numerous implications…. and meaning a whole host of jobs disappearing or changing radically. And there are similar plans to automate entire ships, cargo planes or trains.

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Could the Johnny cabs of Total Recall become a thing of the future?

In short technology has changed the world of work and it will continue to do so. There will still be jobs available, but many traditional jobs will disappear, and the skill set you need to get those jobs still available (or the new jobs created by technology) will continue to rise. This is the problem facing certain segments of society. As they see it, the bar keeps going up, they can’t get over it anymore, so they have it in their heads that we can somehow lower the bar again and keep everything the same, but we can’t, not without reversing many recent technological trends and isolating ourselves from the globalised world.

In manufacturing engineering for example, we are well ahead of the curve. There’s still plenty of people working in UK factories and the UK still makes lots of stuff. Prior to the Brexit vote the UK was on course exceed its 1970’s peak in car production by the 2020’s, even though the work force is a fraction of what it used to be (i.e. automation has made a smaller workforce more productive). However, nobody gets a job these days in a factory without some sort of qualification. The days when, like in Bruce Springsteen’s “the river”  (or Jimmy Nail’s “big river) , your dad could have a word with the guys down at the plant and you could walk straight into a unionised job for life are long gone.

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Many traditional jobs will increasingly disappear in future

And my prediction is that this will now roll out across the entire economy. The blunt message I’d give to people is that if you don’t have some sort of third level qualification (a degree or professional qualification of some kind) you will probably struggle to remain employed in future. So for those who voted Brexit, or are thinking of voting Trump, I’d say leave migrants alone, they are not the main threat to your employment, you need to get educated.

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And to be honest, you won’t want to be employed in future if you don’t have a qualification. What few unskilled jobs that remain will be increasingly the really crappy jobs that nobody wants, with the highest levels of job insecurity and the worst pay. The sort of jobs which will only be taken by students (who will take anything while they pay their way through college), recently arrive migrants (who just want some cash while they settle in), or those suitably desperate who can’t find anything else. Indeed, the employees of Sports Direct will argue this is already reality for them. You could argue that quite a number of those who voted Brexit (or Trump) are the canaries in the coal mine, as they are already seeing these effects.

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Feel worthless at work sometimes? Others have it worse

However, their actions are likely to prove counter productive. Restricting migration does not mean locals will find it easier to get work. What’s likely to happen is employers will just move jobs overseas, or you’ve just given them a very strong financial incentive to find a way of developing a machine to do those jobs instead.

So clearly such a future of work means some profound changes for society. Obviously the costs of third level education means its beyond the reach of many. Hence why I think of all the proposals from Bernie Sanders that Hillary needs to endorse, its reducing college tuition costs. Yes, I realise that won’t be cheap (i.e. can she afford it and still reduce the deficit?), but I suspect it will be a necessity in future, if a massive level of social stratification is to be avoided.

And in the UK far from putting up fees, we need to start cutting them. Is it any coincidence that in countries like Germany where higher education is free, there is less unemployment and less people whinging about migrants?

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And this is not just for the benefit of those who don’t have a degree yet. Even those of us who have one will likely need to return to university to learn new skills from time to time. A recent trend in academia has been a move towards what are called massive online learning courses. And these are mostly aimed at post-grads (rather than undergrads) looking to learn a new skill. I won’t be surprised if a few years from now, the main job of universities is supporting courses like this, rather than teaching degrees to undergrads in RL.

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The future of work will likely be a future where we need to accept the fact that change is good, its normal. We need to be intellectually curious and willing to learn new things and try out new ideas. Of course if you’re a conservative voter, changes are you’re not intellectually curious and you don’t want things to change. You are also more likely to reject ideas like global warming and evolution. The roller coaster of technology is going too fast, they want it to stop so they can get off.

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In the future all of us will need to re-train and change careers from time to time

But getting off the roller coaster would mean giving up what we have. Given that I can’t see us banning the use of the internet for commercial purposes (I mean how would you even police that!) or introducing soviet style jobs for the boys policies (you join one queue and then another), I don’t see how these future trends can be halted. Technology has created many problems for our society (e.g. global warming) and often as not, the solution to these problems is more technology (e.g. renewables, electric cars). So the “getting off the roller coaster” option that conservatives are aiming for would come with a price and I don’t think they understand that this price is probably more than they are willing to accept (you’d have to live sustainably without fossil fuels or renewables…. so basically become Amish!).

Another question we have to ask is whether full employment is a realistic goal for future society. Our entire economic system assumes that anyone who can work will work, but that may not be true in future, there might not be enough jobs to go around in the future.

Now in theory this shouldn’t be an issue. Technology merely means making a smaller pool of workers more productive. In Germany and Scandinavia, yes the manufacturing sectors are smaller than they were a few decades ago. But they avoided the wholesale decimation of working class areas seen in the US or UK, with some districts being reduced to little more than welfare colonies. This I would argue is because the bulk of these job losses were due to miss guided neo-liberal economic policies in the US and the UK. Reversing these policies would seem a sensible solution, although voting for Trump or Brexit amounts to asking for a double helping of more of the same.

So in theory, full employment is still a possibility. But we need to remember that more productivity often means more energy and resource consumption. Now with good recycling policies and a 100% renewable energy grid this shouldn’t be a problem, but we don’t have that yet. So its possible that full employment will not be possible in future (at least for some period of time). Which means some profound changes to society. Given that already the number of workers is falling in Western states thanks to an ageing population, this means even less and less people having to pay more and more of a nation’s taxes to fund the welfare for those who aren’t working.

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Migrants are increasingly needed to help fund retirement for an ageing population

And incidentally curbing migration, which means less young people coming into the workforce and paying taxes to fund the pensions and healthcare of retirees, is likely to prove entirely counter-productive. It could well be a recipe for national bankruptcy.

My view is that we may need to change how the entire tax system works. This is one of the reasons I’ve long favoured a system of carbon taxes, or taxes on things that are generally bad for society (e.g. high VAT on alcohol or fatty foods), a Tobin tax (i.e. a tax on financial transactions) and of course higher rates of corporation tax. In all cases, the goal here is to spread the tax net away from simply funding everything off of income taxes and pushing those rates up every time the state coffers run bare. Which of course tends to provoke much whinging from the fewer and fewer workers stuck paying incoming tax.

And as for distributing welfare, well one alternative to the current system is that of a basic national income paid out to everyone. This would be enough to fund housing and keep people out of poverty. You want more money, you want the luxuries, get a job and work for it. No more whining about lazy people on benefits, everyone is on benefits, indeed presumably this system would come with the clause that such payment would be withdrawn if anyone commits anti-social behaviour (e.g. petty crime, dodging taxes via your offshore account, the usual!). Just this year the Swiss at a referendum on implementing this. Now while it was rejected, I think this was because many didn’t understand the underlying issues. So I won’t be surprised if such ideas don’t catch on in future.

So in essence our society is at a crossroads. I’d argue that we are at the end of a 2nd gilded age. Like the first gilded age, this was a time when neo-liberal capitalists ran wild, we all had a big party and nobody complained a lot because everyone was doing rather well out of it (as this moment of Zen from the film Margin Call summarises). But now, like in the 1920’s we’re stuck with the hangover. And like society in the 1920’s we face a choice.

On the one hand we can opt for a new deal of continuing down the path of social and technology progress. And let’s face it, progress is good. The factories of past era’s, yes there was full employment, but they were awful places to work. Repetitive backbreaking labour while being exposed to extremes of heat, noise, toxic chemicals and rotating machinery. Many had to retire from such jobs in their 50’s because their job ruined their health. Technology means that cars and other products these days are safer, more reliable (used to be the best way to make money from TV’s was selling warranties to fix them), more energy efficient and more user friendly. I mean is anyone reading this seriously suggesting that they hate Microsoft/Apple/Google so much that you want your old Commodore 64 back?

Or, as some societies did in the 1920’s and 30’s, we may end up taking the regressive path of fascism, blaming foreigners and other convenient scapegoats for all of our ills, restricting trade, reversing past policies, going backwards and focusing inward….until said leaders realise they need a war to prevent national bankruptcy and likely end up starting world war 3 in the process!

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8 thoughts on “The future of work

  1. Low-paid jobs at McDonald’s are under fire in Waterloo, Ontario, Canada where automated attendants, like the kind you’ve seen in big-box cinemas for the past few years, are being trialed in every location. I was in a McDonald’s yesterday and counted three automated attendants and one human operated cash register.

    Human drivers have been the last job opportunity for most unskilled or unemployed males (think taxis, limos, and trucks). With self-driving cars just around the corner, I believe this will trigger the next big wave of unemployment. Insurance companies will welcome this with open arms because for all their current faults, self driving cars “do not become distracted by texting” or “are unable to engage in drunk driving”. I can see a day soon where your insurance premium will be based upon telemetry from your own vehicle where someone who uses self-driving mode 100% the time will enjoy the lowest price.

    Now we won’t get their immediately. Many manufacturers like Toyota are preparing to sell “guardian angel” systems in 2017 where it will be virtually impossible to hit another vehicle (like power assisted steering or brakes, this will augment human skills). But “guardian angel” systems will morph into fully autonomous vehicles which will have driving skills not unlike current chess playing machines. Who among us can drive cars as well as Garry Kasparov plays chess?

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    • To be honest anytime I go to the cinema, I’ll have either booked them online or I’ll go to the automatic kiosk, shorter queue!

      Automated cars, I think the problem is going to be people rather than the tech. An automated car crashes (some recent Tesla crashes being a good example), everyone blames the computer, rather than asking what was the driver doing (e.g. going too fast for example). Hence I suspect there will be a long transition, much like you describe, first hazard avoidance, followed by ever more increasingly automated driving until finally human drivers are legislated out of existance (or driven off the roads by insurance costs as you speculate).

      One story I forgot to mention, there’s strikes on in England right now, train guards are striking because the company wants the driver to close the train doors. THey fear this means their jobs will go in future. Then again, I recall being on a driverless train in Canada once, so how long before not only do the guards go, but the drivers go too!

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  2. Excellent post. I wonder what your thoughts are on the political aspect of this e.g. how to keep the wealthy from simply taking all the increased productivity, and how to keep the people from voting against their own interests by allowing the wealthy to continue doing that.

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    • Hmmmm, that its already happening! Like I said productivity per employee in many companies is higher, so they are making more money per employee, particularly if they do manufacturing overseas. Certainly CAPEX costs and other overheads are higher too than they used to be, but inevitably the profit margins are higher than back in the old days.

      As for voting against their own interests, just look at Brexit. Some of the very regions such as parts of Wales and Cornwall that are in receipt of much EU funds voted to leave. The very people who are going to get shafted by Brexit, pensioners and the low paid, also tended to vote leave. A Trump victory would likely impact on poor Americans and retiree’s the worst. So its already happening!

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