US, the book for all of US, installment: Jobs Yes But The Robots Are Coming. What Then?
This is a section of the book:
US
Everything is Done By US
We Can Make it For US
by Tom Cantlon
The list of links to chapters can be found at:
http://tomcantlon.com/us_on_rsn
This time: Why automation makes it even more important we regain the leverage to make the country be for US, and why the reaction almost everyone has to hearing about automation in jobs shows how captured our minds are and how the first change needed is a change in our own thinking.
But the Robots are Coming. What then?
Is the advancement of automation really so important it needs its own chapter? Yes, for two reasons. One, because while the effects of automation are always important, they're going to have a much larger effect on US going forward. Two, our attitude toward it gets to the heart of the change that needs to happen. Change that needs to happen in our own heads.
That the country needs to be running for the benefit of US becomes even more important if we consider the effects that robots and automation are already having. Effects which will be booming in the coming years. It's important because automation is going to be either hurting US or helping US. There is no middle ground. Which comes to pass largely depends on whether we have the leverage to hold onto the full value of our work.
It's not as if, if we don't get more leverage, we'll be just the same as now, no better or worse off. No. If we don't gain more leverage, then robotics, automation, and artificial intelligence will hurt us. Standing still means we'll end up worse off. On the other hand, if we have the power to get our full value, then the benefits of automation will be helpful to working people, and we will be even better off.
Automation, and pretty much any advance in technology, does help the overall country in the long run, and eventually everyone ends up at least a little better off. But, of course, in the short run technology often affects jobs. As the cell phone replaced the land line it displaced people who ran phone lines. Automation in factories eliminates jobs directly.
Economists say that even when technology eliminates jobs in the short run, it eventually enriches us all. For instance, cars eliminated the jobs that had to do with horses and buggies but, because we could all get around faster and haul more goods farther in trucks, ultimately the nation was enriched. The economists are right, in the long run.
But when someone is in the middle of their work life and their job disappears or, worse, a whole town goes down the drain because the plant the town depended on is gone, then someone who is middle-aged has to start over in a new field and maybe move their whole family. They may get another job, but they may never catch up to where they were on pay. Maybe their kids will be better off because the nation will be richer in the future, but that's not much help to the person out of work.
And robotics and artificial intelligence may be even more disruptive than other changes in technology. Rather than just shifting work, as from buggies to cars, it might make a much bigger difference in the amount of work needed than did other technological changes of the past. That's because, in order to produce the number of goods and services that people buy, employers may not need to hire all that many people. There might be a lot of people simply not needed for work. Or the typical number of hours an employee gets might become less, so they have a job, but it's not enough hours.
That's a double-edged problem because not only is that bad for the people who don't get work, it also means they can't buy the things they normally would. That means businesses sell less, the whole economy becomes less, and even the rich end up with less because the businesses they own are selling less. That, in turn, means businesses hire still fewer, so yet more people don't have work as a result.
To some extent this is self-correcting. Products made by robots can be made cheaper, so they'll probably sell for less. (If patterns hold, though, that will be only partly true, and businesses will manage to hang onto some of the extra, and the rich will get richer, and the way the pie is sliced will go even more to the top.) So it will self-correct some, but not enough to make it all right, and all of those without work will still be in dire straits.
What should happen, if the benefits of automation were shared by all, is that as a factory needs fewer employees, that is, where, say, it used to take one hundred employees working the assembly line and now it only takes ten to mind the robots, the pay for those remaining ten should go up.
Think of it this way. If a factory used to make 1,000 things a day, big screen displays or power drills or whatever, that means that each of those one hundred employees was producing 10 products a day. The pay for each employee should be equal to the income on sales of those 10 products, minus all expenses and minus a reasonable profit for the investors. With automation and the factory now only needing ten employees to produce the same 1,000 products, each employee is now producing not just 10, but 100 products per day. The pay should still be calculated the same way: the income on those products, now 100 products per employee, minus expenses and reasonable profit. So the pay should go up proportionately.
So the pay should go up ten times what it was? No, not ten times, as explained next, but it should go up just as much as the profits for the owners go up. They should all benefit roughly equally from the new efficiency.
The pay may not go up as much as it appears at first because, while the number of employees went from one hundred down to ten, the expenses went up, to buy and maintain the robots. So it's not an exact trade off, but certainly the automation will be cost effective. That's why manufacturers will continue to rush into using automation as much as possible, because they find it profitable.
Also the selling price of the products will go down. If one company automates, then so will their competitors. They'll all be making the products cheaper, so they'll compete on cutting prices and the price will go down. That's a benefit to consumers. Consumers can, and generally do, benefit from automation too.
But the price won't go down so much that it wipes out all of the added profit. The typical pattern seems to be that automation both reduces the price of products some and increases the profit of the business. Why else would a business bother to automate if it wasn't going to get something out of it?
The question is, does the extra profit, that portion that the company hangs onto, does that all go to the top? Or does it get shared properly with the workers? If automation cuts a lot of jobs or eliminates a lot of the hours needed to make things, then the pay of the workers needs to go up, a lot. It's the only way the economy keeps on working right, as is explained next.
So does the pay going up a lot like that seem to be too much? Won't those ten employees be getting some very big paychecks? Well, here are two ways of looking at it. Take your pick.
With the pay going up a lot, then the expectation would be that people could afford to work fewer hours. Maybe what we typically think of as a full-time job becomes only twenty hours a week. In fact, we would hope that it works out that way so that everyone who needs to work gets enough hours, say those twenty hours it takes to earn a living, rather than a few people getting forty hours and huge paychecks while a whole lot of others have no work at all.
Pay going up a lot could also mean many more parents who choose to be couples would be able to go back to the days of one parent being able to stay home during the child-rearing years. That doesn't need to mean women returning to the oppression of being housewives when they don't want to be. A husband could be the stay-at-home parent too. But it means having the income to have the option of one staying home, and it means a lot of kids having parents who have the option to do more parenting if they want. The side point here is not just about parenting, but how automation should improve our lives. All of our lives, not just the top.
People being able to work less is the whole point of automation, if properly applied. In the future, when automation is applied everywhere that it can be, no one will be doing grunt work. People who want to be creative will still work at developing new products and such, but no one will work an assembly line, drive a truck, answer phones, wait tables. There will still be jobs that can't be automated or ones where we prefer human interaction, and there will be jobs minding the robots, but the total number of human hours needed might be much less. If such a world is done right, everyone still needs to get their share of working hours to earn a living. However, with less overall work needed, they have to be able to earn that living with fewer hours, or maybe fewer years. That is, they would need a level of pay that would allow for a shorter work life but still enable them to save up for a long retirement. In any case, it means that pay per hour has to go up to meet that need.
The alternative is, of those one hundred employees in our imaginary factory, ten would get retrained to mind the robots. Maybe they'd get a little more pay because it's a job that takes a little more skill. The other ninety simply become unemployed with no recovery, possibly becoming homeless, barely subsisting on whatever the food banks and charities offer, and definitely not contributing to the well-being of society the way they'd like to. Of course, there's always crime as an option. It's a bad option, but if you make a lot of people desperate, a certain amount will turn to crime.
A variation on how to deal with this is that we have some big, national, guaranteed income, so those ninety get, say, barely enough to not be homeless. But there's no dignity in that, and no guarantee the next round of elections won't lead to cuts in the guaranteed income. And people living on government payments are not likely to have much political power, so whether the government's support continues at all would be uncertain.
Ironically, these ninety people having little or no income would even be bad for the powerful interests, the owners and investors, because it means those who are out of work have no money to spend on products, so businesses will sell less.
But don't worry about the owners. With robots making things and only ten employees to mind them, business will be profitable. Price competition will drive prices down somewhat, but somehow most of the major companies in most of the major industries keep making more, and their slice of the pie keeps getting bigger.
So the huge increase in automation that is to come can either result in everyone having an easier life, or result in a whole lot of people effectively cut out of the economy, clinging to the edges, clinging to bare survival and all of the rotting of society that goes with that.
After all, someone is going to get the benefits of automation. Why should it go more to the investors than to US? It is our innovation and our work that has led to automation. Why should it be allowed to end in a bad result? We should get our full value for our work, and we should get our full share of the benefits of automation.
Getting to the good result, the easier life for all of us, will take a monumental struggle of leverage. Leverage to demand and get our proper share of it, based on the value of the work that we all do which makes it all go. Automation is going to change things. Standing still in terms of leverage will mean losing ground in terms of results. Making the economy what it ought to be—of, by, and for US—is the only way to avoid the future being even more of the opposite—of, by, and for powerful interests. But, hey, we're US. Numerous and strong. We can do this. We just have to actually, you know, do this.
Our reaction
As noted at the start of this chapter, this subject gets to the heart of what needs to change, and that change is in our own minds. When the effects that automation will have on jobs are discussed, it often leads to worries of lost jobs. We end up with a negative reaction to news of automation, which is a crazy and backward state of mind.
Automation by definition means a reduction in effort needed. Anything that reduces the effort needed for US all to live our lives should be joyous news. If it's a kitchen appliance that's going to make kitchen work even quicker and easier, that seems like a great idea. But if it's automation that affects our job, we have the opposite reaction. The thought is, "Oh, no! Fewer hours! More layoffs!” We get stressed and worried. And why do we react that way? Because it is so deeply ingrained in our minds that anything that could possibly be used to benefit business at our expense, will. That this is just the way things work and the automatic result and it never even crosses our minds to expect otherwise. When, actually, anything that automates, that is anything which reduces the work it takes to run our nation, again, should be joyous news. Even if we're just acknowledging the fact that, as things are, it's likely to only help the top, our thought should be to be incensed and outraged that an advancement in human technology should go only to the benefit of the top and be a detriment to the rest of US in lost wages. Even if someday we'll all be better off for the innovation, the fact that the near-term gain should all go to the top and hurt US is something we should be outraged to be confronted with.
That this is the typical scenario is an indication that radical change is needed, but first a radical change has to happen inside each of our heads. If we haven't changed our outlook so that we have a deeply ingrained automatic reaction to look at things with the assumption that it should all work to the benefit of US, then we haven't had that radical change in our own heads. If we ever find ourselves reacting in ways that are sensible, like hearing that automation hurt some workers and automatically thinking, "What? It hurt workers not helped them? Why didn't those workers get their full share of the benefit of automation?" then we know our head has changed.
That change, in our heads, is really the only change that matters. It is that change that will help US realize just how much power we already have and start to use it. If enough people have that change in understanding, then change will happen, relentlessly, possibly slowly, but surely, gradually over time yielding to the pressure of our insistence on our being given our full value, both in work and in how we want this country run.
Radical change has to happen, and it has to happen in your head.
Next
Wage theft is a huge problem and a key problem. How it's handled is the perfect thermometer of whether federal and state governments are for US or not, but it's also a thermometer of ourselves, of how much we really care about US, or how much is really just care ourselves and not others.
Tom Cantlon is a business owner and writer in a small western town. This e-mail address is being protected from spambots. You need JavaScript enabled to view it
