© J. Dirk Nies, Ph.D.
“The revolution that began with machines and chemicals proposes now to continue with automation, computers, and biotechnology. That this has been and is a revolution is undeniable. It has not been merely a “scientific revolution,” as its proponents sometimes like to call it, but also an economic one, involving great and profound changes in property ownership and the distribution of real wealth. It has done by insidious tendency what the communist revolutions have done by fiat: it has dispossessed the people and usurped the power and integrity of community life.”
– Wendell Berry, What Are People For? 1990
Worker productivity is at a record high, corporate profits are strong, innovation is brisk and our economy has been growing for sixstraight years. But who is benefiting?
Historically these conditions lead to full employment, growth in personal income, and expanding opportunities for upward mobility. Yet, for the past 15 years, the percentage of Americans participating in the workforce has been declining. And for those who are gainfully employed, many find their incomes stagnant and their purchasing power diminishing. Downward pressures on employment and personal income are becoming engrained forces throughout the economy. Unless deliberately counteracted, present trends suggest these pressures are only going to get worse.
What is promoting these transformations? What is decoupling strong corporate profits and steady economic growth from increasing wages and abundant jobs?
First, here are some economic statistics that highlight and quantify this pernicious phenomenon.
Purchasing power is declining. The United States Census Bureau reported in September: “Real median household income over the past seven years shows that income is 6.5 percent lower than in 2007.”
Income inequality is getting worse. The Gini index, which measures income inequality, (0 represents complete equality and 1 represents total inequality) now stands at 0.480 nationwide. As more and more wealth is held by fewer and fewer people, our society is degenerating slowly toward total income inequality. “Since 1993, the earliest year available for comparable measures of income inequality, the Gini index has increased 5.9 percent” says the Census Bureau. This is not a problem facing America only. Worldwide, the wealthiest 1 percent own 50 percent of the world’s riches.
Poverty remains intransigent. The Census Bureau also noted: “The nation’s official poverty rate in 2014 was 14.8 percent, which means there were 46.7 million people in poverty. … This marks the fourth consecutive year in which the number of people in poverty was not statistically different from the previous year’s estimate.”
Housing is less affordable. More and more people are living in households that include at least one ‘additional’ adult; a person 18 or older who is not the householder, spouse or cohabiting partner of the householder, and who is not enrolled in school. The Bureau reports: “In spring 2007, prior to the recession, there were 19.7 million shared households, representing 17.0 percent of all households. By spring 2015, the number had increased to 23.9 million and represented 19.2 percent of all households.” This trend of shared households masks the level of poverty of young adults ages 25 to 34 who are living with their parents. If they were out on their own, the poverty rate of these young adults would jump from the current 7 percent to nearly 40 percent.
Workforce participation is declining. With each passing year, relatively fewer and fewer Americans have a job (or are actively seeking one). Workforce participation has not been this low since 1977. The number of working-age Americans who are not earning an income, including those who have simply given up looking for work, has risen to 37.4 percent, according to the U.S. Bureau of Labor Statistics. As shown in the graph, the share of working-age people who are employed (or who are seeking gainful employment) dropped to 62.6 percent in June, where it has remained all summer. This is happening in spite of the fact that the ‘Great Recession’ officially ended in June 2009, as determined by the National Bureau of Economic Research.
Finally, with each passing year, robots and automated machines comprise an ever bigger slice of the economic pie. And they are doing so without having to be paid a wage. The U.S. Bureau of Economic Analysis data reflect this reality. Wages as a percent of Gross Domestic Product (GDP) are lower now than at any time since the 1940s. People and their wages are becoming proportionally less important each year for the running of the economy.
The causes reducing the labor force, hollowing out the middle class and thwarting many in poverty from finding a pathway toward prosperity are multi-faceted and complex. They include the impact of globalization on the U.S. economy and the aging of the baby boom generation.
I wish to highlight another, less discussed aspect: the exponential growth in the power, capability and deployment of robots and devices that possess artificial intelligence (A.I.) that are replacing human labor.
We are in the throes of great and accelerating change. An astonishingly rapid revolution is underway. Potent technological tools—which are devoid of truth, authority, identity, spirit and virtue—are being unleashed throughout the economy. Capital investment in automation technologies is usurping the need for and decreasing the value of human labor and knowledge. People are being displaced and dispossessed. To rephrase Wendell Berry’s question, what do we need people for if machines can do the same work faster, cheaper, better, anywhere in the world?
Since the inauguration of the Industrial Age in England in the eighteenth century, technical innovation and entrepreneurship has generated great wealth and improved the standard of living of millions of people. What is different now is the augmented power of machines to perform cognitive, diagnostic and managerial functions. Machines can now understand spoken language and respond appropriately to voice commands. They can recognize faces. They can navigate unfamiliar terrain. They can learn and then apply their new knowledge to novel situations.
Previously, only physical labor could be outsourced to machines. Now much of the work done by sales staff, customer service representatives, warehouse workers, bank tellers, accountants, tax advisors, truck drivers, pilots, engineers, lawyers and doctors is in play and fair game to automation. Over the next few decades, robots, androids, drones and machines possessing artificial intelligence and extraordinary dexterity likely will replace roughly half of all jobs currently held by humans.
Obviously, these shifts in employment will be felt globally. In England, the BBC has developed a webpage, “Will a robot take your job?” to answer the question of how likely you will be replaced by automation: www.bbc.com/news/technology-34066941. Simply type your job title into the search box and the likelihood that your job will be automated within the next two decades appears.
For example, there is a 95 percent probability that sales and retail assistants will be replaced by robots in the next 20 years. Farm workers face an 87 percent risk of being displaced. Overall, about one-third of current jobs in the UK are at high risk of computerization by 2035, according to a study by researchers at Oxford University and Deloitte.
How should we prepare bravely for this new world of machines? What can we do to adjust to this rapidly expanding digital reality that is profoundly changing the nature of work and the structure of society?
Reconfiguring our educational systems, tax code and social safety net are necessary adaptations. But something much deeper is needed to preserve our humanity. The pragmatism of blind market forces is insufficient to the task. We need a broader vision to chart a way forward that is economically viable, resilient, just and humane. I challenge those who are designing and those who are purchasing robots, androids and drones to consider above all else the needs of people and the integrity of the community; to recognize the purpose and meaning of work in our lives. If we don’t aim to make these artificially intelligent machines serve us in ways that utilize our talents and creativity, that reflect our wisdom, our moral authority, our truth about what is important and what is valuable, we will end up drearily serving them as they fill the pockets of the uber-wealthy.