My Thoughts on Automation and the Future of Employment

Automation is something I've thought of for years.  For simplistic purposes I'll just define automation as the replacement of human labor with machines.  This can take the form of a robot in a factory, a kiosk at the airport or a computer answering your call to customer support.  In many ways automation is a good thing, doing dangerous or monotonous jobs while simultaneously lowering price and increasing quality.  However, it can also be a bad thing from an employment perspective.

A lot of the talk this last election was about "bringing manufacturing back".  A lot of the blame of the loss of manufacturing jobs was put on trade agreements, and no doubt they play a part, but automation has been perhaps the more powerful force in eliminating jobs.  Here's the good news and bad news, manufacturing has come back to America, the jobs just haven't followed.

A new factory filled with robots run mostly by Ph.D's from MIT is not what these voters are after.  When people talk about bringing manufacturing back, I think they're really referring to having a pool of good middle class jobs with decent pay and benefits that someone could potentially stay at for their whole career, "the American dream".  Traditional manufacturing is great for workers, but from the employers point of view automation makes a world of sense in that robots work cheap, don't take vacation and don't need a 401K, allowing them to be more competitive and deliver better returns to their shareholders.

“Shouldn’t the ultimate goal of a society be 100% unemployment?” —Doug Stanhope

That's one of my favorite economic quotes and it comes from a comedian.  It's actually kind of deep when you think of it and then think of the worlds Star Trek or the Jetsons presented to us.  Not a lot of manual labor or dirty work going on there.  I also think we overplay the fact that technology will make x,y,z obsolete.  The invention of the computer and the loss of the typewriter didn't make secretaries or paper obsolete.  Similarly, the invention of the tractor and modern farming displaced a lot of jobs, but these jobs were eventually replaced with jobs in fields that didn't exist 20 years earlier.

I think there may be a difference this time around from past advances in automation in that it is happening on multiple fronts instead of just one industry.  It's also being seen worldwide in cheaper labor markets such as China where FoxConn (maker of many of your favorite electronics) has laid off 60,000 workers replaced by machines.  Sure you need people to build and maintain the robots, but a lot of this can be done by robots too!

Examples are all around us.  Self driving cars are just on the horizon and could displace millions of truckers, cab drivers and others.  You can get a virtual financial analyst or have IBM's Watson diagnose your medical condition more accurately than most doctors,  Even the service sector, a place displaced factory workers often landed, is even under pressure with kiosks taking the places of people.  Even when factory workers seem like they are winning the battle they may be losing the war, such as Carrier keeping jobs in Indiana "for now" while simultaneously investing in automation that will likely displace many of them down the road.

There are ways to "create" jobs by using people rather than automation, a sledgehammer to kill a fly approach.  I remember in China seeing a dozen people on a street corner sweeping snow by hand, doing over hours what a single person in a plow could do in seconds.  I could see government doing such things, but could you really legislate private industry to be inefficient?

So is massive automation a bad thing?  I guess time will tell.  It appears there will be a future with less jobs than there are people.  We may have to look at things like earlier retirement or a reduced work week down the road from a financial perspective, but one has to wonder the psychological impacts of not working as well.  I also know the whole world claims to be too busy and we're dying of stress, poor eating and not exercising which we'd theoretically all have more time for if we worked less.  There'd also be more time for family, the arts and creativity.  Lots to think about as we go forward, just wanted to throw it out there to get other peoples thoughts as well.