Tuesday, November 19, 2013

The End of Jobs: What Happens Next?

Here's how the job diminution might play out. I call it the post-jobs economy.

1. Ever fewer jobs require people, least of all, expensive-to-hire Americans. On top of wages that are higher than in most countries, there's Obamacare, family leave (paid leave in CA and NJ,) worker's comp, Social Security, Medicare, disability, sick days, vacation days, and legal claims.

The jobs that remain in the U.S. will increasingly be low-pay crap jobs or high-pay intellectually difficult ones.

Technologies like supermarket and big-box-store self-checkout and robotelemarketers and collections agents have already put millions out of work. Next, self-driving vehicles will put more millions of truck, train, bus, and taxi drivers out of work. Fast-food workers who wrested higher salaries will find their victories to be Pyrrhic as companies find it cheaper and more reliable to use robotic servers and preparers as is already occurring in some fast-food restaurants in Japan and Europe. Now, IBM is developing a virtual clothing salesperson who will "listen" to you and your measurements and make recommendations, likely far more on-target than the $10-an-hour salesperson at the boutique or department store.The cover story of the current Economist predicts that biopsies will be done by computer rather than lab techs, wars fought by robots not soldiers, Big Data analyzed by computer not data miners, basic sports stories written by computer, title searches conducted by computer, insurance underwriting done by computer, and that mainly careers such as firefighter, clergy, and fitness trainer will be immune, although with the development of ever more potent fitness apps, I'm not so sure.

According to MIT jobs guru Andrew McAfee, even some work done by doctors, lawyers, and accountants will be done by computerized expert systems.

I predict that most teacher jobs will go away. The most transformational instructors will teach online, which will improve instruction nationwide, with paraprofessionals onsite to provide the human touch.

Ben Way, author of the new book, Jobocalypse, claims that 70 percent of all jobs will be gone within 30 years, including teachers, bartenders, nurses, even babysitters.

U.S. wages will thus, within 30 years, be near the world average of $18,000 a year.

2. The growing number of poor people will result in our electing politicians who will "soak the rich" more and use the money to transfer dollars to the poor and to pay for single-payer health care. That will forestall major increases in crime and rioting.

Despite the redistribution, people will learn to live on much less--like 100 square feet per person. Many people will be forced to give up their car in favor of mass transit. Recreation will descend from $100 football tickets and 8-day/7-night fly-away vacations to at-home TV watching and staycations. Wal-Mart and thrift stores will be go-to stores for all but the 1%ers.

Even though the last thing the U.S. needs is a workforce with less motivation and impaired memory, pot will be legalized nationwide. After all, a dispirited populus needs something to dull their pain and fears.

3. Already, the top 5 percent pay 59% of the income tax. "Soak the rich" yet more and many businesses will go out of business or move to a low-tax country. That would be the tipping point--- a big increase in crime, rioting, and substance abuse.

4. In desperation, the heretofore rather anti-business public schools and colleges will feel forced to train more entrepreneurs so more sustainable jobs can be created. But it won't be easy to turn people who aren't, by nature, entrepreneurial to become good enough business owners, especially in a world with more entrepreneurs and fewer people with discretionary income.

5. Because fewer people will be able to afford to buy non-essential items, an ever larger percentage of purchasing will be done by the government---It can raise taxes to pay for what it wants to buy. So   government will continue to grow in its share of GDP.  But at some point, the public will demand a much smaller government, which will put more money back in individuals' and businesses' pockets. That will start a new cycle of development of new products and services and of more hiring, albeit never as much as in the pre-information/pre-industrial age. 

At some point, I'm guessing within a decade, all but highly capable and driven Americans will have to live very simply, perhaps even akin to the way most people lived centuries ago. Who knows? Maybe they'll be happier for it.

A wild card is Armageddon. Technological advances make it ever more likely that even a sole actor could wreak Armageddon. For example, a crazed science professor could create a mutated smallpox virus and release it in a shuttle bus headed to an international airport. 

Perhaps this scenario is unduly negative. After all, for millennia, humankind has prevailed with quality of life generally improving. Let's hope it continues.

Dear reader: your thoughts?


Maria Lopez said...

While fast food may be robotized I think that jobs like doctor and lawyer involve a lot of hand holding and robots are unlikely to be quickly accepted in those positions. Besides the emotional component of those positions there is the fact that robots currently have trouble manipulating arbitrarily positioned soft materials such as flesh.

Number two is probably correct in so far is it pertains to taxes but I think legal pot will be a problem for few people. After all it was legal from the founding of our country until the 1930s without preventing economic growth. This doesn't mean it won't be life destroying for some.

Number three I don't have much to say about but people do often think that certain businesses are taxed too much or poorly regulated in a way that hurts them. They may also think that employees demand too much. Sympathy isn't always with the employee. My father was ashamed to find out that I was fired for nonperformance.

I don't think that anti-business sentiment is universal in colleges. I did get out of college with an anti-business attitude which was unhelpful to me, but I learned it from peers not sociology professors.

My college also was unusually leftist. Colleges with business and established engineering majors would tend to be less anti-business than mine.

Even though I have never been a great employee and tend to have a little bit of a chip on my shoulder, I quickly learned at least some respect for business people once I got out of school.

I don't understand why entrepreneurship would need a lot of training. To some extent it seems to me like you just come up with an idea and start executing it.
There are obstacles in the form of regulations and in the fact that you and your family might get sick and be unable to pay for care, but easing local regulations plus single payer healthcare can help with this.

I also think your last paragraph is somewhat vague. I'm not sure the quality of life for average people changed much until the mid nineteenth century wen artificial sources of power began to be used on a mass scale and the necessity of sanitation began to be understood.

As for prevailing, what does that mean? We have avoided extinction despite major disasters but there doesn't seem to be universal scale that we can measure ourselves against. There are ideas about what should be doing but none are universally accepted and many produce reactions ranging from eye-rolling to revulsion among those who don't adhere to them.

I guess I'm satisfied with any future where infant mortality declines in other cultures and remains low in this one and where ordinary people continue to have the ability to produce of art of some sort if they wish.

Marty Nemko said...

Thanks as usual for your good comments, Maria. Some disagreement:

All doctors wouldn't be replaced but many doctors would--computerized diagnosis would be more accurate and up to date and after the public knew that, most would prefer it.

For born entrepreneurs, the art of identifying viable ideas, cost-effectively and persuasively finding funding for it, and leading its implementation comes naturally. For most people though, it requires lots of training.

Humankind has inexorably improved: life expectancy, standard of living, less (although still wildly unacceptable) gratuitous violence.

Maria Lopez said...

Actually life expectancy has suffered a few ups and downs. In particular, in the early modern period it was quite bad in urban settings.

As for computerized diagnostics, I know someone working on a system to use pattern recognition to diagnose the severity of a particular eye disease.

If this system is successful you would still need to have a healthcare worker flip up the patient's eyelid so that a camera could see it. This is not necessarily a doctor but the need for physically manipulating patients will preclude massive use of robots without human partners in healthcare for some time.

Finally, though I can't speak to violence, I'm not sure how important rising standard of living is. I resent the fact that I can't impulsively purchase books or art supplies as I could when I did not have a family but if I had never been able to do that, I might be resentful.

John Sensenbaguh said...

I take issue with your supposed "soak the rich" income transfer plot being foisted upon us by politicians. I think we're a long ways from a system where people (and corporations who, I guess, are also people) in the upper income stratosphere are paying their fair share. We all have heard about the Lear jet write offs and income sheltering schemes in off shore islands.
Unfortunately Obama ceded going for a single payer system from the beginning. Belatedly he may be learning the art of hardball negotiating. I hope that you're future gazing does prove prophetic in this regard.
And for people put out of jobs as truck drivers or fast food servers due to robotics or automation, won't that require new jobs in making robots and automated machines? When people stopped making carriages they moved on to the auto assembly plant. I think there will be similar opportunities as we phase out old jobs in favor of new fields of endeavor.

Marty Nemko said...

John, the top 5% already pay 60% of the income tax.

The number of jobs created by adding a computer-controlled module or three to cars and road sensors is trivial compared with the millions of people who make their living as a driver. And certainly, those people won't have the skills to do more than perhaps lay down those sensors, something that must be done once.

Dave said...

Dr. Nemko,

Thank you for posting an interesting (and frightening) article.

My Question -- Doesn't the financial elite need the masses to consume their goods and services in order to survive? I thought the Fordist model applied here.(?) Only a command economy could operate in a land of poor people with little or no discretionary income (eg. USSR). If your prediction of the future is an accurate one, entrepreneurship will become extinct.

Rex said...

I like your post, as usual. I recently watched an excellent documentary on Netflix, Death by China, which shares many of your predictions regarding jobs in the US.

I do not think doctors will ever be totally replaced by robots. Even robotic surgery is a long ways off. Plus, as you mentioned in the past, the prestige of doctors in general is waning, and the alternative medicine and organic/local food movement is gaining steam rapidly, possibly creating many new jobs in local agriculture. Personally, I think the entire philosophical paradigm we are in as a society regarding biomedical science is a terrible way of promoting health and preventing illness. The human body is far too complex for us to ever completely understand at a molecular level. Alternative medicine, although difficult to validate in double blind RCTs, seems to hold the greatest promise for making people healthier and happier.

Marty Nemko said...

Right, I think there will be some doctors. I mention them only because they are viewed as impossible to replace. Not quite.

Marty Nemko said...


I do think the financial elites and entrepreneurs will also take hits as fewer people can afford to buy non-essentials. But entrepreneurship will still be the only true source of increased jobs, although I do not believe it will result in sufficient employment for folks.

The cost of hiring an American is enormous: sufficient value to an employer to be worth paying them a living wage, Obamacare, paid family leave, worker's comp, social security, Medicare, disability, sick days taken, vacation days taken, and the grievances filed.

Too few Americans add enough value to an employer to justify that cost. So, as I wrote, ever more jobs will be automated and offshored, and ever fewer Americans will afford to buy non-essentials.

In the end, I believe most people will end up living as simply as they did in ancient times, expect with a few more tech and health advantages.

Maria Lopez said...

I see you have edited your post. I'm not sure what you mean by saying people will live like they did in ancient times. In ancient times several things were true.

1. Most people did agricultural work.
2. Most people were illiterate.
3. With no artificial power sources, people used animals to do work. This resulted in animal dung in the streets all the time.
4. Water was often dirty and waterborne diseases were prevalent, leading to a lot of child mortality.
5. There was little access to reliable contraception.
6. Religious institutions had great power.
7. It was hard to get news. People often had little idea of what was happening a hundred miles away.
8. All agriculture was organic. Lack of artificial fertilizer meant that yields were lower and some modern high yield crops, such as those bred by Norman Borlaug, could not be used.

While some of the things I mentioned could be true of the future, I will bet 1,2, and 6 will be less true of the future than the past. While I don't believe humanity is necessarily progressing, I do not think all the changes of the past fifteen hundred years will reverse themselves.

Also the US has 300 million people out of a world population of seven billion. Our mistakes will only doom the world if they result in such catastrophes as nuclear war.

I do think there be problems in the future from climate change, more expensive fossil fuels, antibiotic resistance, bad political movements, and robotization but what's coming will be, as always new. I do think bioterrorist attacks are possible and could be horrible but we are more likely to be able to contain them than we are able to contain the problems above.

Marty Nemko said...

Another great post, Maria. Yes, there will, thankfully, be many improvements over life in ancient times.

Dave said...

So, we'll owe our souls to the company store -- Wal-Mart.

Chris G said...

Marty, not only all accurate...but I'm surprised you aren't getting backlash for these predictions. After all, who cares if they are well considered, match current trends, and make inherent sense? All that is outweighed by the fact that people don't want to hear them...they are non-PC and might even be deemed "offensive"- like Copernicus, Gallileo, Lavoisier, Malthus, et al. I ask religious people who will take care of all these billions of people, and they answer, "God will".

Well, maybe they got that part right.