Corporations are moving to automation as soon as they possibly can. Not just because American workers eat into profits, but because ALL workers eat into profits. And everyone, regardless of political affiliation, should be able to see that corporate profit chasing has gotten worse, not better in the past 20 years. It’s not going to change.
The jobs are going away, and they’re not coming back. I can throw a lot of statistics, studies, and surveys at you, but the best way to put this is probably through three simple statements:
- US manufacturing jobs are down, but productivity is up significantly. How do you be more productive with fewer people? Automation and increased efficiency.
- The most common job in 28 US states is truck driver. But most truck driving companies in the country are considering automating their fleets with self-driving trucks. Self-driving vehicles in general threaten 3.4 million freight, taxi, bus, and delivery truck jobs. And the tech is coming faster than people realize.
- Amazon just announced Amazon Go, an automated convenience store that requires no cashiers at all. This trend had started already with the advent of self-checkout. Fast food restaurants are already introducing automated kiosks. Chances are you’ve already ordered from one. There are now 200,000 of the machines in stores around the world. And that number is expected to reach more than 335,000 by 2020, according to figures from London-based research and consulting group RBR. In 20 years, service and retail jobs will be decimated.
Now, let’s get into the nitty gritty and I’ll explain just how boned blue-collar folks are:
Manufacturing jobs are an endangered species
An old staple of American politics in the Midwest is “bringing back manufacturing jobs.” But this is just lip service. Politicians know those types of jobs aren’t coming back. Employment in manufacturing peaked in the U.S. in June 1979, at almost 19.6 million jobs. The trend line has been trending down ever since and this September that number was down to 12.3 million (these numbers are seasonally adjusted). According to the Census Bureau, the real median household income of an American householder who has completed four years of high school peaked in 1973 at $56,395 in constant 2013 dollars. By 2013, it was down to $40,701. That is a drop of $15,694–or 27.8 percent. Good paying jobs for people without higher education have been leaving for a long time, across both Republican and Democrat Presidential tenures, and it’s not going to change.
But current manufacturing output is 41% higher than it was in 1997 (the last year manufacturing jobs ticked up). Here’s the catch though: about half of the total growth in U.S. manufacturing output since 1997 has been in just one sector – computer and electronics manufacturing.
And most of that work is done by machines doing tasks no human could ever hope to do efficiently. The robots have already taken over manufacturing, and since they never take sick days, vacation, maternity leave, or need lunch breaks, they will always be more cost effective for companies.
The use of robots and other manufacturing efficiencies were responsible for 88 percent of the 7 million factory jobs the US has lost since peak employment in 1979, according to a study by Ball State University’s Center for Business and Economic Research.
Millions of people make their living through driving, but that’s about to be done by robots too
Few people realize that truck driving is a huge source of jobs in this country. This image illustrates it nicely:
Truck driver is the most common job in 28 states
Let me make a couple of key points here:
US truck transport, says freight company Flexport, can double its output for less than half the cost just with partial automation.
That’s just with partial automation! Imagine the profits with 75% automation. That’s the brass ring for companies in the trucking business. But the trucker community still feels like this takeover is a long ways away. The past decade alone should have taught us how amazingly fast technology shifts can occur. Case in point:
A convoy of self-driving trucks drove themselves across Europe in April, and the first driverless delivery in the US dropped off 21,000 cases of Budweiser in Colorado Springs, Colorado this October.
And driverless car projects by tech titans like Google, Apple, and Tesla are going to threaten every driving job from chauffeur to Bus driver.
Service and retail jobs are on the chopping block too
In 2010, the cost of checking in a passenger at the airport was about $3 with a staffed desk, according to a report from the Information Technology and Innovation Foundation entitled Embracing the Self-Service Economy.
But when customers use electronic terminals to check in? That cost dropped to 14 cents.
With those numbers, moving to a fully automated check-in and boarding process could save the airline industry $1.6 billion a year, the International Air Transport Association says. And as automation becomes better and the technology becomes cheaper, the pure numbers argument is going to get more appealing.
Fast food restaurants are doing it too. As increases in the minimum wage cut into profits, the automation of the food industry just increases at a more rapid pace. This isn’t just limited to fast food. Amazon just announced its first grocery store pilot, Amazon Go. It’s a store where you just walk in, scan your phone, grab all the stuff you want, and walk out. Everything gets calculated and charged automatically through computer vision and sensor systems (ironically these systems were derived from self-driving car systems).
Britt Beamer, president of America’s Research Group, a consumer-behavior research and consulting firm, estimated that Amazon’s cutting-edge technology had the potential to wipe out 75 percent of typical grocery-store staff.
Now at this point, some astute readers will assert that automation doesn’t always equal a decline in jobs. You could bring up the 19th century textile industry, where almost all of the work was automated, yet the number of weavers continued to grow for decades. More automation meant the price of cotton cloth fell, and people used more of it. You could bring up the bank teller profession, which didn’t end up extinct despite fears when the ATM was first introduced. And those are certainly valid examples of how technology can actually enhance and improve human opportunities, but they are very specific and depended a lot on the circumstances of the time.
The textile industry in the 19th century had not reached anything near market saturation and the technology wasn’t advanced enough as it is today. Once those factors changed, textile jobs evaporated (steam and water powered looms needed people, electronic systems didn’t need nearly as many). ATMs actually DID reduce the average number of bank tellers per urban branch (from 21 to 13), but bank deregulation in the 90s and the cheaper cost of running a branch with fewer humans meant banks could increase the number of branch offices. As a result, demand for bank tellers increased. But now that the banks have reached market saturation, the situation is changing. According to the Labor Department, employment of tellers is projected to decline 8% over the next decade. The number of bank branches is now declining rather than increasing “because of industry consolidation and technological change”, including things like mobile banking. Technology eventually wins, every time.
Okay, so the jobs are going to be gone, but the people aren’t going anywhere (in fact, with a rising population we’re quickly getting MORE working age adults). And while we can shift some of them to other professions (some of which would involve building and maintaining the very automation systems in question), we can’t retrain everybody. A 35-year-old steel worker today is not very likely to shift careers and become a computer engineer in 20 years. So how do we keep these guys eating, housed, and comfortable with no decent paying work for them to do?
That is going to be the major economic question we have to answer in the near future. It’s not about limiting immigration, or outsourcing, or free trade. Cheaper labor done by other groups, if anything, has just helped to slow down the takeover by the machines. But even that isn’t enough to stop the inevitable decimation of unskilled and low-skilled labor in industrial nations.
Will the solution be a huge higher education push to educate the public for premium jobs that can’t be automated? Will it be implementation of Universal Basic Income? Or, ironically, free trade agreements that allow American workers to become a migratory class hopping from country to country to grab work where they can? To some degree this is already happening with UK citizens in the EU with “free movement of workers” rules allowing them to move around freely in Europe. But the Brexit vote threatens that, which is part of why 18-24 year olds, according to a YouGov poll, voted 75% to stay in the EU – their employment future is at stake.
The answers won’t come easy, and the facts are hard to deny. But our workforce can adapt. We’ve done it every time technology shook things up. But the first step is accurately assessing the issue, and blaming regulations or immigrants or free trade helps no one but the politicians trying to win elections.