ROBOTS, BLACKSMITHS, AND THE FUTURE

For whom the bell tolls: human employees?

No man is an island, entire of itself; every man is a piece of the continent. ~ John Donne

I’ve been fascinated with robots and technological change for over five decades. My high school drama club produced Karel Capek‘s play, R.U.R. (Rossum’s Universal Robots), that creatively introduced the word “robot” into the English language and forever after augmented science fiction’s realm. [Spoiler alert: the robots won.] In graduate school I examined the process and impact of technological advance in several industries, including energy utilities.

Industrial robots haven’t been science fiction for decades. They’ve been used in many industries to increase productivity and reduce labor requirements. Recently, much more attention has been cast on robots and more generally, automation advances and artificial-machine intelligence (AI), as “job stealing” forces that may soon reap havoc with all sorts of workers’ employment prospects. In his “farewell address” last week President Obama warned about “the relentless pace of automation that makes a lot of good, middle-class jobs obsolete.” This week’s Davos meeting of the world’s political/business/techno-elite has identified technological disruption (i.e., human workers’ jobs becoming obsolete) as one of the 4 “biggest risks” of 2017.

Such decades-old technological forces already have seriously jeopardized the president-elect’s stated (and impracticable) objective of significantly increasing US domestic manufacturing employment. Turning manufacturing’s automated digital clock way back into a labor-intensive, analog pocket-watch will be impossible, despite Micro Donald’s tweets.

We’ve come way beyond mere robocops. Alarmist pro-roboticists like Jerry Kaplan, author of Humans Need Not Apply, believe that with continuing advances in AI, virtually every human job will ultimately be replaced by automatons. In his book Kaplan says robots will choose to “farm us [humans] or keep us on a preserve, making life there so pleasant and convenient that there’s little motivation to venture beyond its boundaries.” Sounds like big fun, doesn’t it? Martin Ford’s book, The Rise of Robots, offers another dystopian view of future human employment, as epitomized by the book’s sub-title, “Technology and the Threat of a Jobless Future.“ The machines are coming for the high-wage, high-skill jobs as well, Ford says, and not just for manufacturing jobs, burger-flippers, or hospitality workers.

According to these authors, signs of the robotic transformation are hiding in plain sight. Over the last 15 years, 50,000 financial workers on Wall Street have lost their jobs as high-frequency trading programs complete over 100,000 transactions in one-tenth of a second, while at the same time attempting to mislead their competitors. A McKinsey study states that 43% of workers’ time in the financial sector could be automated using expected improvements in AI. Legal firms no longer are interested in paying staff to sift through hundreds of documents when a computer can absorb a thousand times as many in just a few seconds. Automated software can now turn facts into functional journalism. The list goes on…

Martin Ford says “nearly any white-collar job that involves sitting in front of a computer manipulating information” is exposed. Enhanced, AI-based capabilities are behind an Oxford University study’s examination of over 700 occupations that concluded 47% of US jobs are at risk from automation. Currently, that’s almost 75 million jobs that could be threatened, what Ford characterizes as a “jobless future.” Such provocative, ominous conclusions have increased concerns about future availability and sustainability of human employment, and may have precipitated one member of Congress to say (absurdly) he wished “technological change would just slow down.”

Nevertheless, individuals and analysts have bifurcated feelings about these disquieting pronouncements. A recent New York Times readers’ poll about future technologies indicated that “robot servants” elicited the highest number of “somewhat excited” responses (32%) and the most “not too excited” plus “not at all excited” responses (52%).

Is indeed the bell tolling for human employees? No, not any more than it generally already has, despite the media hype to the contrary. The idea that tomorrow’s future will be jobless plays directly into people’s fears of huge displacement by characterizing the historical trend of employing new machines-technology to advance productivity as totally job-killing. It hasn’t ever been. This is not a new trend, and it’s never ultimately created significant, widespread unemployment.

In the US much of this advancement began in the mid-18th century in agriculture, when over 90% of American workers were toiling on farms, with the invention and adoption of machines like the cotton gin, steel plow and reaper. These innovations generated massive improvements in labor productivity. Building on this dramatic agricultural productivity advancement, the Industrial Revolution also appeared in 18th century Great Britain and beyond. For the first time in human history, mechanization assumed a keystone position in industrial and agricultural production.

Certain laborers have been and continue to be adversely affected by adoption of new technologies. There are now far, far fewer blacksmiths than there were in the late 19th century – the pre-automotive age of horse-and buggy power. In 1900 there were about 20 million horses in the US. I estimate that in the very late 19th century there were between 9,000 and 12,000 blacksmiths just in rural America, where 60.4% of Americans lived. In addition, there were sizeable numbers of blacksmiths in fast-growing cities. In 1900 New York City had around 100,000 horses that provided virtually all types of transportation for humans and commercial establishments. In the Big Apple alone there were more than 900 businesses that served this equine population – firms with blacksmiths, wheelwrights and farriers. At the turn of the 20th century there were probably 3.5 million horses in American cities. Then things changed, big time.

By the 1920s, after the horseless carriage (aka, automobile) had utterly reined in horses’ general transportation duties, blacksmiths and their brethren were no longer as much needed. Many of them eventually probably found jobs at Ford, General Motors, Studebaker, or other car manufacturers.

According to Maynard Studios there are now only 500 professional blacksmiths in the US. Should we shed a tear for the thousands of long-displaced blacksmiths? No.

Robotophiles’ (or is it robotophobes?) visions of a jobless future remind me of prognosticators who in the early days of personal computers confidently predicted that we’d soon be living in the age of the “paperless office.” So, is your place of work now paperless? Nope; paper is still plainly present in our offices and homes. The paper industry produced revenues of $132 billion last year.

The paperless-future folks forgot both about people’s needs for tangible documentation, and that technological, structural changes take a long time to become prominent. Likewise, the menacing prophecies of writers like Martin Ford and Jerry Kaplan that millions of human workers will soon be displaced by robots are misguided.

Scott Andes at the Brookings Institution has found that there need not be any correlation between adoption of robots and manufacturing job losses. Countries like Germany, that utilize more manufacturing robots than we do, have lost fewer manufacturing jobs. Automation technology creates jobs, doesn’t just supplant them. Contrary to popular belief, the use of ATMs in the 1990s resulted in an increase in the number of bank tellers because the cost of opening up new branches was reduced because of the ATMs.

Nevertheless, as automation technology advances it will continue to especially imperil workers whose time is mostly spent on routine, repeatable tasks. As has been true during the past several decades, humans with more computer skills will continue to replace human workers with inadequate or no computer skills, in the way that graphic designers and word processors replaced typists. This substitution is never immediate, despite Ford’s claims; it can require significant investment and planning. In fact, in his final chapter Ford succumbs to reality by stating anticlimactically that “there is no question that the economy will remain heavily dependent on human labor for the foreseeable future.” Yet however beneficial for the overall economy digital advances can be by improving labor productivity, those at the bottom of the labor distribution without sufficient digital or computational skills are the most vulnerable and will be most hurt. This is why robotophiles should be clamoring for improved, focused education techniques and programs that will train digitally-displaced workers no matter how young or old they are, rather than preaching for universal basic income.

Will robots soon become the specter of the end of human employment? No, the much-feared jobless future of the day after tomorrow is pure hype. But continued robotization (aka, advanced, digital mechanization) of commercial practices will certainly cost jobs, as it has since the late 18th century, and create them. And yes it’s one of numerous concerns facing labor; but those shouting about humans losing all prospects of employment are getting ahead of themselves and reality.

With our in-coming president centered solely on individual companies’ employment practices (see Carrier Corp’s 800 jobs) rather than a needed, broader, macro labor strategy, every job lost in Monticello (Iowa), Grand Rapids (Michigan) or other towns is his only (slender and momentary) measure of his tweet-based policy’s effectiveness. That’s why he’s my woeful Micro Man. If, as expected, he doesn’t extensively increase manufacturing employment, he’ll no doubt blame innocent Democrats. The fate of our laborers and the economy will depend on what happens as Micro-Man’s myopia meets a myriad of macroeconomic challenges, including those surrounding technological displacement. 

A January Postscript. As you can imagine, it’s not just blacksmiths who have been technologically displaced. Nope, Botts Dots are now headed for history’s dust-bin. The Dots have apparently reached the end of their road because of new technology – driverless cars.

According to the Sacramento Bee, “After more than a half century of service, the safety device created by Elbert Botts in a Sacramento lab and once described by a state official as a loyal old dog, is expected to be relieved of duty sometime this year. The classic white ceramic dot, a notable innovation in its day, appears to be a bad fit as a lane marker in the emerging new world of driverless cars that rely on cameras, radar and computers to ‘read’ and understand lane lines.” Botts Dots have been done in by driverless cars; who would have guessed. It’s especially startling since you only need several people's hands to count the number of validated, non-experimental, fully-driverless cars and trucks now cruising on California fabled freeways.   

MADDIE AND THE MACHINE

The real problem is not whether machines think but whether men do. ~ B.F. Skinner

It's not even just the economy any more; it's jobs, jobs, jobs. Yesterday's announcement that the economy added 243,000 jobs last month and the unemployment rate declined slightly to 8.3% is what passes as good economic news. All economic news stories now seem to require a statement about the proposed action's presumably-positive effect on jobs, be it a tax reduction for the wealthy or a new oil pipeline. These alleged job numbers can be very suspect – do you really think that under Mitt Romney, Bain Capital, a private equity firm, really added 100,000 jobs as a result of its flip and sell actions? Mr. Romney's manufactured number appears quite "shaky," as factcheck.org discusses.

Nevertheless, the pre-eminent emphasis on jobs is both warranted and not surprising in an economy that still suffers from high unemployment. From an historical perspective, having such a significant number of unemployed people for so long remains unusual. Except for the brief recession in 1981-82, one has to go back to 1932-40 amid the trauma of the Great Depression to find unemployment rates comparable or higher.

What is it about this recession that has made high unemployment linger for so long? I believe there are three (3) Inter-related factors: the globalization of product and labor markets; the ever-increasing use of technology that displaces lower-skilled workers; and the failure of education (both by schools and students) to produce workers with skills now needed by employers. Some people – like the Wobblies[1] in the early 20^th century – disparage the substitution of labor with machines. As I mention below, this process is not new; it's been present since at least the Industrial Revolution in virtually all industries, and has been especially prevalent in the US. Workers have long been displaced by machines/automation, and eventually everyone gained, even the dislocated workers, once they learned new skills. The use of automated machines in many industrial and manufacturing processes is now completely commonplace, and regarded as normal. It is workers and machines, not versus machines.

Globalization.  Over the past decade, the international flow of goods and services has steadily increased. According to the World Trade Organization in 2010 (latest year available) total world merchandise trade was $14.350T, which represents a 14% increase from 2009. The US remains the world’s biggest trader in merchandise, totaling $3.247T in 2010. International trade is important to our economy. Increasing exports have certainly been one of the movers of our domestic economic growth. But foreign trade remains a fairly small proportion of US national output – about 14% of GDP – despite the media's barrage of stories saying how we are being decimated by jobs lost to the Chinese. Yes, we have lost many jobs, but the US remains one of the top three exporters and manufacturers of the world. Our merchandise exports are dominated by higher-value goods and services including machinery and equipment, and aircraft and parts. Nevertheless, globalization of markets, especially labor markets, has left all too many lower-skilled wage-earners without opportunities here in the US.

Technological advance.  Virtually all of the technological change that has occurred in the US has been capital-using and labor-saving. Creating better machines remedied our nation's relative lack of manpower. [Although it's no longer true, up until the mid-20^th century, it was mainly men working.] These machines allowed the relatively scarce workers to become much more productive.

Historic examples abound, including those in the agriculture (ag) sector. Harnessing water- and wind-power to mill grains more efficiently had been used since Roman times. Significant American ag improvements began in the 18^th century and have never stopped. The enormous increases in agricultural labor productivity were produced by the adoption of a series of new technologies including hybrid seed; iron/steel plows; mechanical planters, reapers, thrashers, harvesters and combines; barbed wire; and mechanical tractors. [Interestingly, it wasn't until 1954 that farmers used more tractors than horses on the nation's farms.] By 1987, farm labor productivity had increased 100-fold in 150 years. [In 1830, it took 250-300 labor hours to produce 100 bushels (Bu) of wheat on 5 acres of land; by 1987, it took 3 hours to produce 100 Bu of wheat on 3 acres.] These advances allowed ag workers to leave the farms, move to the cities and become industrial workers at the same time as ag output was increasing – in 1930 one farmer supplied 9.8 persons in the US and abroad with their food, by 1970, a single farmer supplied 75.8 people. In 1900, 40% of the US labor force lived on farms; in 1990, less than 2% lived on farms. Similarly dramatic improvements have been made in manufacturing and industrial labor productivity.

As described, agricultural workers were "displaced" by machines that allowed crop production to increase using less labor. This process of substituting machines for labor continues today In the US and elsewhere, as it has for generations. However, unlike times past when the nation's economic growth absorbed dislocated workers in other jobs, such workers (especially lower-skilled folks) now find it far more difficult to secure well-paying full-time jobs. Thus, real wages have stagnated. In essence, our real GDP is now roughly the same as it was in 2007 (before the "Great Recession"), but the US is producing this output with 6 million fewer jobs than in 2007, confirming the significant, continuing increases in labor productivity.

With globalization and technological change, the geographical opportunities for production of goods have again multiplied. The choice of where to produce both high-value and lower-value goods has significant ramifications for current and future jobs. This article, "How the US lost out on iPhone work," illustrates these job consequences, using the example of where and why the iPhone is designed (the US), manufactured (China), and purchased (world-wide).

Education.  If the issue at hand is our nation's enduring unemployment in the midst of globalization and technological change, and it is, we should critically assess both how our educational system can help alleviate this issue and enact public policies to reduce unemployment. I have mentioned before that implementing public policies now to promote robust and broad economic growth – namely targeted, expansionary fiscal policies together with policies to lessen our structural deficit – are an absolute imperative for reducing unemployment.

But in the midst of significant unemployment, numerous industries have noted they are finding it increasingly difficult to hire qualified workers with the skills they require, especially in science, technology and engineering.

What can we do? Unlike the vapid – "don't bother me with the facts" – Republican pronouncements (especially those of Mitt, Newt, Ron and Rick), there is no simple answer to this key question. I believe a solution must be based on improving our nation's human capital – the skills, talents and knowledge of our people and workers. However, improving our human capital takes time and focus that is in very short supply. Increasing funding into our existing educational system is not sufficient, although it is probably necessary. The focus and effectiveness of education must be altered to emphasize producing high-quality "middle-skilled" workers along with needed "higher-skilled" graduates who achieve college degrees. Middle-skilled workers are those that do not require a bachelor’s degree, but do require some education or training following high school. Ideally, workers could receive such skills with re-focused curricula at community and junior colleges. Tragically, in California (and other fiscally-challenged states) these 2-year colleges have been hard hit by state budget cuts, $502 million in cuts just this year, which represents almost 9% of their budget.

Projections from the Bureau of Labor Statistics indicate that during the next decade, 45% of job openings will be in middle-skill positions. What skills are these? These jobs encompass a broad range of professions from construction supervisors and machinists to dental hygienists and paralegals. However, experts believe that many students in our educational system are not attaining the skills needed for these highly-demanded jobs.

An insightful commentary in The Atlantic, "Making it in America," looks at Standard Motor Products, based in Queens, NY, and Madelyn “Maddie” Parlier, one of Standard's middle-skilled workers. It's well worth reading. Standard manufactures after-market (replacement) precision fuel injectors used in internal combustion engines. The article uses this American firm as an example of how modern manufacturing has dramatically evolved. It is now a computer-controlled, machine intensive process, requiring particular labor skills. From the article, Ms. Parlier states, “What worries people in factories is electronics, robots. If you don’t know jack about computers and electronics, then you don’t have anything in this life anymore. One day, they’re not going to need people; the machines will take over. People like me; we’re not going to be around forever.” For now though she is around, through a lot of hard work, determination and some luck. Her future is by no means guaranteed at Standard, as the firm fiercely competes with other auto parts businesses across the globe.

The article mentions that higher-value manufacturing that US firms seek (and compete against  foreign firms with lower labor costs) needs workers who have skills that are much more specialized than those 40 (or even 15) years ago. Unlike what happened in the much of the 20^th century, very few new US manufacturing jobs will go to workers who are unskilled or low-skilled – those with just a high-school education. Now, manufacturing requires middle- or higher-skilled workers, especially in technical tasks like interacting with machines. The more skilled, intelligent and flexible these workers are, the more likely they will continue to hold industrial/manufacturing jobs in America. But, these talents are far less broadly distributed than typified industrial job entrants in decades gone by. Finding a job in industry with just a high-school degree that can lead to a middle-class existence will be doubtful, due to globalization and technological change.

US students need to recognize that in order to succeed in the globalized work place, they must be disciplined and focused in their efforts and perform well. And, despite President Obama's and others' exhortations, a significant surge in US manufacturing jobs while possible, is not that likely – it's not 1950 anymore when the US's industrial and economic might was without peer (due in large part because our industrial and educational infrastructure hadn't been destroyed by bombs and battles in WWII).

Nevertheless, making public investments are worth the risks simply because the opportunity cost of not investing is so large. Re-forming and re-focusing post-high-school education programs to offer students the opportunity to learn employable middle-level and higher skills is essential. Such motivated, skilled workers will be an indispensable ingredient for our economy's broad and sustainable growth. Can we do this? It's hard to believe it will be straightforward, given the riven nature of not only our politics, but our collective sense of what needs to be done to secure a meaningful future for ourselves and our children.

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[1] The Industrial Workers of the World, or Wobblies, is a labor union founded originally by socialists, anarchists and radical trade unionists in 1905. Of local note, the city of Berkeley's recycling is picked up, sorted, processed and sent out all through two different IWW-organized enterprises. And according to Wikipedia, in 2006 the IWW Bay Area Branch organized the Landmark Shattuck Cinemas in Berkeley. The Union has been negotiating for a contract and hopes to gain one through workplace democracy and organizing directly and taking action when necessary.