Negative consequences of automation must be addressed

Thomas Bantley

thbantley@ursinus.edu

In anticipation of the 2020 election, many of today’s most pressing issues – such as health- care, education and climate change – are being vigorously debated publicly. However, one particularly pressing issue is barely being discussed at all: automation.

Automation has a remarkably high probability of completely remaking the U.S. economy. Specifically, new advanced forms of artificial intelligence and automation could put a large number of Americans out of work, thus creating a permanent class of unemployed workers. Despite the critical nature of this issue, there is not a large policy discussion occurring.

Occasionally, those who are concerned by automation are written off as cranks who are uncomfortable with the trappings of the modern world. But in fact, automation – and resistance to it – has existed since the beginnings of the Industrial Revolution. In 18th century England, the Luddites rioted and destroyed machines that they feared would eliminate their jobs in the textile industries. What makes concerns about automation in the 19th century different from today is the scale of the issue. The degree to which automation could change the U.S. economy later in the 21st century is dizzying. For example, a 2017 McKinsey Global Institute study found that the U.S. could lose 73 million jobs to automation and the world could lose 800 million jobs by 2030.

To be fair, McKinsey thinks that all of these job losses will, with economic reforms, be replaced by new, better-paying jobs. However, I am skeptical about this claim for several reasons. First, we have not seen this in recent decades. For example, during the late 19th and early 20th centuries, many workers in the horse carriage industry lost their jobs when the automobile became popular. All those workers were able to find better jobs in the automobile industry and related industries such as oil, steel, rubber, sales, marketing, radios, mechanic shops, and many others. However, blue-collar workers have been unable to restart their careers in recent decades. For example, in rust belt states, such as Pennsylvania, jobs lost in industries such as manufacturing have not been replaced by an abundance of new attainable jobs, but by the creation of a small set of high-skilled technology oriented jobs that could not make up for the losses in the old blue- collar work. All the workers who used to work in steel and coal did not start working for Tesla because the economy of the 21st century is so productive that only a small amount of technology- savvy, well-educated workers is necessary.

Because the existing issues of automation have yet to be addressed in any significant way, deindustrialized communities have found themselves in dire circumstances. For example: the despair of poverty and joblessness, which first began to manifest itself in blue-collar African-American communities in the early 1990s, soon migrated to the rust belt and created a fertile ground for drug addiction. The opioid crisis has ripped through America, to the point that 2.1 million Americans have an opioid use disorder and 886,000 Americans have used heroin according to the Department of Health and Human Services. Next, joblessness and poverty has resulted in a decline in American life expectancy. According to the National Center for Health Statistics, American life expectancy has collapsed by 1/10 – from 78.9 to 78.8 – between 2014 and 2016. According to this study, Americans are sicker than other developed countries, progress on treating major diseases has stalled, and issues such as alcoholism, drug abuse, obesity, social isolation, and poverty are a primary cause of the decline in life expectancy.

Reformers have proposed a wide variety of solutions to the challenges of automation. Universal basic income is a solution based upon the idea of the government providing each citizen with an income in order to allow them to live a decent life despite being unemployed due to automation. Another idea is an automation tax. This idea proposes that we make automated machines pay payroll taxes in order to support essential programs, such as Medicare and Social Security, in order to ensure the continued success of these programs as tax-paying workers leave the labor market. Those on the more progressive side of the political spectrum advocate for programs such as universal healthcare and public housing to help workers in America. Another common solution is creating more job training programs to help workers enter new technological and information based fields. I don’t know what the best solution might be, but this country needs to have a conversation about what we are going to do about automation.

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