Throughout history technology has taken over jobs that people used to do. We no longer beat our laundry clean in the river or even wash our dishes by hand. On a grander level we have automated production lines for cars, appliances, electronics, and nearly everything else. In recent years we have even added automation to checkout at grocery stores and we can now order our Starbucks (NASDAQ: SBUX) lattes, cappuccinos, and other products via an app.
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It's a march of progress that's inevitable and a new report from the United States government called "Artificial Intelligence, Automation, and the Economy," [opens in PDF] shows how it's not going to stop. In fact, driven by improvements in artificial intelligence (AI), it's a trend that's going to accelerate.
Robots aren't rising up to take over the world (yet) but they are going to change the job market. Image source: Getty Images.
What does the report say?
To put it bluntly, AI-driven robots are going to take jobs away from lots of people, according to this report. That sounds like bad news for some workers, but the report explains that while doors will be closed, windows will be opened:
For workers, that's a scary proposition. At least some of the current political unrest in the country can be attributed to automation (and cheaper foreign labor) making some formerly skilled work once performed by people no longer necessary. Automation has cost factory workers, food-service employees, and people in many more lines of work their jobs, and the report shows that will continue.
For workers, improving AI can be a mixed bag. Starbucks, for example, has not cut workers because its app now takes orders. Instead, the company uses those employees to speed up production in the limited space behind its counters. That creates a better customer experience, allows stores to serve more people, and creates more profit for the company.
Moving forward, however, it's easy to see how improvements in AI and smarter "robots" could take jobs. Even in that simple Starbucks analogy, it seems logical to think that making at least some of the chain's drinks might be better done by an AI-driven machine than a human barista.
Technology creates wealth
The challenge for the U.S. government (and governments in every industrialized country) is that while technological progress is "the main driver of growth of GDP per capita," according to the report, that benefit is not spread equally.
For example, the creation of the internet and advances in computers made highly skilled workers more productive, increasing their value. People in jobs that required performing predictable, easily programmable tasks (such as switchboard operators, filing clerks, travel agents, and assembly line workers) not only did not see gains, in many cases they saw their industries largely wiped out.
"Labor productivity increases generally translate into increases in average wages, giving workers the opportunity to cut back on work hours and to afford more goods and services," said the report. "Living standards and leisure hours could both increase, although to the degree that inequality increases -- as it has in recent decades -- it offsets some of those gains."
It's a case where technology will make workers more productive, which is great for those with jobs that can't easily be done by smarter machines. To those left behind, however, those gains won't seem quite so positive.
Progress cannot be stopped
Corporations have a responsibility to make money for their stakeholders. It's inevitable that lower-end service jobs will eventually be done by robots/AI-driven machines. Starbucks offers one example and McDonald's (NYSE: MCD) has already begun using kiosks with tablets to take orders in some markets and the chain has tested automating some of its food preparation process.
That does not mean that McDonald's, Starbucks, or any other chain will be eliminating people anytime soon. There will still be humans in customer-facing roles, but the amount of jobs will decrease. That's an impact that will likely be felt through all industries, creating a new wave of change, much like the period we just went through where the internet devastated job markets in everything from newspapers, the record industry, phone books, travel, and many other areas.
"Shifting demand toward more skilled labor raised the relative pay of this group, contributing to rising inequality," said the report. "At the same time, a slowdown in the rate of improvement in education, and institutional changes such as the reduction in unionization and decline in the minimum wage, also contributed to inequality -- underscoring that technological changes do not uniquely determine outcomes."
There are going to be winners and losers, though we don't know how big the impact will be.Researchers' estimates on the scale of threatened jobs over the next decade or two range from 9% to 47%, according to the report. That's a big range, but we know the robots are coming and both Americans and their elected officials have a responsibility to prepare for the changes.
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