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Automation & jobs pt 1 - the economy (1 Viewer)

bostonfred

bostonfred

Footballguy
It's coming.

Uber and Lyft have already rocked the taxi industry  Autonomous cars will just about bury it.

Autonomous trucks will not only take out the truck drivers, but all those truck stop diners and gas stations and motels. 

McDonalds is expanding their use of automation and people love kiosk ordering because you don't feel like a jerk for asking for no mustard, light onions, pickles on the side and a half diet coke half coke zero even though you are a jerk.

It's not just McDonald's.  Chain restaurants are doing tablet ordering. Starbucks and Dunkin are doing online ordering. 

These are great things for the consumer. But they represent a non trivial percent of the labor force, which will create more competition for the jobs that do exist. And as AI improves, and innovation continues to replace people's liveihoods, it will only get better.  or worse. definitely faster.

What do you think will happen to the economy?  I thought about putting up a poll but decided to open it up for ideas instead.  Do you expect new jobs to get created elsewhere?  Where?  Do we move to a univeral basic income?  Shorter work week?  Massive unemployment with no end in sight?  Where is this wave going to take us?

 
This is more or less just a black dot for me, but in my uneducated opinion.....

Automation will lead to massive unemployment (for a long time) that will eventually lead to BIG.  

 
bostonfred said:
What do you think will happen to the economy?  I thought about putting up a poll but decided to open it up for ideas instead.  Do you expect new jobs to get created elsewhere?
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I agree with your analysis of the trucking and food service industries.

In the long run, the economy creates about as many jobs as there are workers to fill them.  If you go back to 1900, for example, something like 30% of the labor force was in farming.  Today, there are about 1/13th as many farmers as there were then.  If I told the people of 1900 that 12 out of every 13 agricultural jobs would be destroyed by capital-intensive agricultural techniques, they probably would have predicted economic collapse and ask many of the same questions that you're asking.  

But those non-farmers of today are now working instead in the pharmaceutical industry, finance, computer science, etc.  Labor doesn't just sit there idle.  People find things to do with it.

In the short run, it sucks for people whose jobs get destroyed by forces outside their control.  I would not have wanted to be a 45 year old farmer who lost his farm due to low commodity prices and an inability to keep up.  I would be very nervous if I was a 30 year old trucker today.  Food service is less of an issue -- that's unskilled or semi-skilled labor, and there's always similar low-paying work out there for that.  

 
This is a nearly identical issue to free trade.  Trade unambiguously destroys jobs in some areas while creating jobs in other areas.  The gains also outweigh the losses.  But it sucks if you're one of the people who fall into the "losses" category.  Some guy who lost his job in a textile mill isn't going to find a new job working for Pfizer -- that newly-created job is going to go to some other guy who might have been a cubicle drone if it weren't for trade.   

 
bostonfred said:
It's coming.

Uber and Lyft have already rocked the taxi industry  Autonomous cars will just about bury it.

Autonomous trucks will not only take out the truck drivers, but all those truck stop diners and gas stations and motels. 

McDonalds is expanding their use of automation and people love kiosk ordering because you don't feel like a jerk for asking for no mustard, light onions, pickles on the side and a half diet coke half coke zero even though you are a jerk.

It's not just McDonald's.  Chain restaurants are doing tablet ordering. Starbucks and Dunkin are doing online ordering. 

These are great things for the consumer. But they represent a non trivial percent of the labor force, which will create more competition for the jobs that do exist. And as AI improves, and innovation continues to replace people's liveihoods, it will only get better.  or worse. definitely faster.

What do you think will happen to the economy?  I thought about putting up a poll but decided to open it up for ideas instead.  Do you expect new jobs to get created elsewhere?  Where?  Do we move to a univeral basic income?  Shorter work week?  Massive unemployment with no end in sight?  Where is this wave going to take us?
Click to expand...
Pretty sure the standard line is "New jobs will be created in designing/developing/producing the automation.  Those jobs don't go to the people displaced by the automation, though."

I do think automation is relatively expensive in places where labor is cheap.  It will hurt 1st world workers more, and sooner.

 
IvanKaramazov said:
I agree with your analysis of the trucking and food service industries.

In the long run, the economy creates about as many jobs as there are workers to fill them.  If you go back to 1900, for example, something like 30% of the labor force was in farming.  Today, there are about 1/13th as many farmers as there were then.  If I told the people of 1900 that 12 out of every 13 agricultural jobs would be destroyed by capital-intensive agricultural techniques, they probably would have predicted economic collapse and ask many of the same questions that you're asking.  

But those non-farmers of today are now working instead in the pharmaceutical industry, finance, computer science, etc.  Labor doesn't just sit there idle.  People find things to do with it.

In the short run, it sucks for people whose jobs get destroyed by forces outside their control.  I would not have wanted to be a 45 year old farmer who lost his farm due to low commodity prices and an inability to keep up.  I would be very nervous if I was a 30 year old trucker today.  Food service is less of an issue -- that's unskilled or semi-skilled labor, and there's always similar low-paying work out there for that.  
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This is how I went to school and landed in my career path exactly. My dad is a funeral director in a family business that he will retire in just fine, but I would've been SOL taking it over for my timeline. Long story short not a good place to be, so he told me to study something else. I started in computer science because I like computers. Well, that lasted for 1 semester before I sprinted for the exits with my GPA in tact, it was :whoosh: for me. I literally went, where do I stand the best chance to get a job? Business school, then once in business school, I found the best fit of interest for me and job market intersected at an accounting/MIS double major and I'm an accountant in the healthcare space today.

 
I too think we're in a transitionary period for a decade or two that will displace a lot of workers.  Retraining someone who worked in a textile mill to work in today's modern economy will be challenging.  There's no doubt that many people will get left behind and feel disenfranchised.  Trump was carried to the WH on the backs of an early wave of these folks. 

 
We were watching a story tonight on the news where they showed robots grabbing items to ship for Amazon.. Reminded me that in High School I was a "picker" at  Northern Hydraulics doing that same job.. It was an easy job for teenagers while it lasted :bye:

 
A basic income guarantee will need to happen at some point.  It will probably get here 20 years after it should be here.  I think automation is going to take a HUGE bite out of jobs.

 
fatguyinalittlecoat said:
I know this has historically been true but I'm less confident than you that it will remain true.  Over time there will be fewer and fewer jobs where humans are better or cheaper than robots.  
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At some point, you are definitely going to be correct.  If we look far enough into the future, nanotechnology is going to eliminate the problem of scarcity, at which point none of what we know about economics will apply any more.  My discipline will have become mostly irrelevant, which kind of sucks for me (not really -- I'll be dead, so the joke's on economists of the future).  But at that point, there's also not much difficulty involved in providing a good standard of living for the majority of the population that doesn't work.  If anything, it might be more about how do we find people to do any of the work that actually needs to be done when any particular individual can just live off the nanomachines for free.  Maybe that will be the issue that keeps economists gainfully employed, possibly against their will.

The transition from today's world to that world will probably be interesting.

 
mquinnjr said:
This is how I went to school and landed in my career path exactly. My dad is a funeral director in a family business that he will retire in just fine, but I would've been SOL taking it over for my timeline. Long story short not a good place to be, so he told me to study something else. I started in computer science because I like computers. Well, that lasted for 1 semester before I sprinted for the exits with my GPA in tact, it was :whoosh: for me. I literally went, where do I stand the best chance to get a job? Business school, then once in business school, I found the best fit of interest for me and job market intersected at an accounting/MIS double major and I'm an accountant in the healthcare space today.
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honestly, funeral director seems like one of the safest professions there could be... Maybe undertaker or something.

 
bostonfred said:
What are some other industries you think will be safe?
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My guess is that trades like carpentry, plumbing, electrician, etc. will hold out the longest.  But as some point, super-intelligent AI will be able to do anything a human being can do, only significantly better.  An AI will write better novels faster than what humans can do, compose/produce better music, design better and more aesthetically pleasing buildings, perform surgery with better results, and so on.  This is assuming that super-intelligent AI doesn't kill us all first, in which case at least unemployment won't be our most pressing problem.  

Edit: At some point the trades will give in too.  AI-controlled nanomachines will essentially "grow" a house for you at some point.  But before we reach that point, we'll have to figure out how to get people to work 40 hours a week as roofers when they could live comfortably off the produce of automation and AI instead.

 
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IvanKaramazov said:
At some point, you are definitely going to be correct.  If we look far enough into the future, nanotechnology is going to eliminate the problem of scarcity, at which point none of what we know about economics will apply any more.  My discipline will have become mostly irrelevant, which kind of sucks for me (not really -- I'll be dead, so the joke's on economists of the future).  But at that point, there's also not much difficulty involved in providing a good standard of living for the majority of the population that doesn't work.  If anything, it might be more about how do we find people to do any of the work that actually needs to be done when any particular individual can just live off the nanomachines for free.  Maybe that will be the issue that keeps economists gainfully employed, possibly against their will.

The transition from today's world to that world will probably be interesting.
Click to expand...
:lol:  

 
For anyone interested in this subject, I highly suggest reading Rise of The Robots.  It's extremely enlightening and addresses the things raised in this thread so far.....and really swayed me on basic income guarantee

 
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Tiger Fan said:
For anyone interested in this subject, I highly suggest reading Rise of The Robots.  It's extremely enlightening and addresses the things raised in this thread so far.....and really swayed me on basic income guarantee
Click to expand...
Adding to my christmas list.  

I have not read the following book yet, but have heard Kevin Kelly on several podcasts and think he is great: https://www.amazon.com/Inevitable-Understanding-Technological-Forces-Future/dp/0525428089/ref=sr_1_1?s=books&ie=UTF8&qid=1480381133&sr=1-1&keywords=the+inevitable

 
fatguyinalittlecoat said:
I know this has historically been true but I'm less confident than you that it will remain true.  Over time there will be fewer and fewer jobs where humans are better or cheaper than robots.  
Click to expand...
We assume it's just McJobs and stuff but I'd imagine Watson could do the job of many attorneys and other white collar professionals. 

 
Ramsay Hunt Experience said:
We assume it's just McJobs and stuff but I'd imagine Watson could do the job of many attorneys and other white collar professionals. 
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Watson is already better at finding rate cancer symptoms than oncologists who cant read and temember every study that comes out.  That doesnt mean we wont need doctors at all, but it will make diagnoses better.

 
Ramsay Hunt Experience said:
We assume it's just McJobs and stuff but I'd imagine Watson could do the job of many attorneys and other white collar professionals. 
Click to expand...
People can already do wills and tax returns with pretty rudimentary software.  Those sorts of things are what sustain people who work in law and accounting in lots of towns.  I imagine it will be a while before we see an AI defense attorney, but that will eventually happen.  Not in our lifetimes, but eventually.

 
bostonfred said:
It's coming.

Uber and Lyft have already rocked the taxi industry  Autonomous cars will just about bury it.

Autonomous trucks will not only take out the truck drivers, but all those truck stop diners and gas stations and motels. 

McDonalds is expanding their use of automation and people love kiosk ordering because you don't feel like a jerk for asking for no mustard, light onions, pickles on the side and a half diet coke half coke zero even though you are a jerk.

It's not just McDonald's.  Chain restaurants are doing tablet ordering. Starbucks and Dunkin are doing online ordering. 

These are great things for the consumer. But they represent a non trivial percent of the labor force, which will create more competition for the jobs that do exist. And as AI improves, and innovation continues to replace people's liveihoods, it will only get better.  or worse. definitely faster.

What do you think will happen to the economy?  I thought about putting up a poll but decided to open it up for ideas instead.  Do you expect new jobs to get created elsewhere?  Where?  Do we move to a univeral basic income?  Shorter work week?  Massive unemployment with no end in sight?  Where is this wave going to take us?
Click to expand...
Hey Fred, excellent thread idea and maybe the right person to start putting threads up where folks can allow silly political ideologies to stay off the table and instead discuss what is going to happen to uneducated workers that need to work and feed themselves and loved ones? 

We are not creating any jobs for these folks with long term employment in mind. It is disturbing and then we wonder why folks are rioting. They riot because they fear the future and quite frankly I don't blame them. 

No simple answers but I do think we need to make WallStreet somewhat responsible for creating potential new jobs rather than create a machine to put 100,000 more folks out of work. 

Is everyone going to be on Life Stipend from the government? Seems like a terrible idea IMO.

 
IvanKaramazov said:
My guess is that trades like carpentry, plumbing, electrician, etc. will hold out the longest.  But as some point, super-intelligent AI will be able to do anything a human being can do, only significantly better.  An AI will write better novels faster than what humans can do, compose/produce better music, design better and more aesthetically pleasing buildings, perform surgery with better results, and so on.  This is assuming that super-intelligent AI doesn't kill us all first, in which case at least unemployment won't be our most pressing problem.  

Edit: At some point the trades will give in too.  AI-controlled nanomachines will essentially "grow" a house for you at some point.  But before we reach that point, we'll have to figure out how to get people to work 40 hours a week as roofers when they could live comfortably off the produce of automation and AI instead.
Click to expand...
The first winners of these technological advances will be the people who own the technology or have the money to buy it and profit from it.  

Walk me through the steps between the rich getting richer, and robots building enough for people that they can live comfortably without working.  

 
bostonfred said:
Watson is already better at finding rate cancer symptoms than oncologists who cant read and temember every study that comes out.  That doesnt mean we wont need doctors at all, but it will make diagnoses better.
Click to expand...
I would be stunned if doctors existed 500 years from now.  I'd be surprised if they existed 200 years from now.  It would not be shocking if they were not around 100 years from now.  

The AI thing is real.  At some point, we are going to create an artificial intelligence that is as smart or smarter than the smartest human.  That will mean having an AI that is a better doctor than the best doctor who ever lived, coupled with machinery capable of better diagnosis and treatment than anything even close to what we can do today.  Doctors are basically mechanics who work with biological organisms.  They will be easily replaced with technology, much sooner than roofers.  

 
IvanKaramazov said:
People can already do wills and tax returns with pretty rudimentary software.  Those sorts of things are what sustain people who work in law and accounting in lots of towns.  I imagine it will be a while before we see an AI defense attorney, but that will eventually happen.  Not in our lifetimes, but eventually.
Click to expand...
Many big law litigation associates do legal research (Watson is probably already better), E-Discovery (predictive coding is still kind of immature but will probably do most doc review within five to ten years), and initial drafts of pleadings (Watson could probably crank out at least an outline). 

 
bostonfred said:
The first winners of these technological advances will be the people who own the technology or have the money to buy it and profit from it.  

Walk me through the steps between the rich getting richer, and robots building enough for people that they can live comfortably without working.  
Click to expand...
I don't know.  Today, all of us have to toil to produce the stuff that generates the value to get us paid to buy the stuff we need.  At some indeterminate point in the future, it will be like Star Trek where we rearrange molecules to transform dirt into prime rib and we are all unimaginably wealthy.  There is presumably going to some really weird intermediate stage where scarcity is still a thing -- so that lots of people need to work -- but where free market capitalism allocates wealth in a highly unequal manner (my guess anyway).  We're not there yet, but we've gotten little tastes of this with trade and current levels of technological advancement.  That transition will be difficult, but the ultimate end result is going to be just fine for the people who are there on the other side.

 
IvanKaramazov said:
I don't know.  Today, all of us have to toil to produce the stuff that generates the value to get us paid to buy the stuff we need.  At some indeterminate point in the future, it will be like Star Trek where we rearrange molecules to transform dirt into prime rib and we are all unimaginably wealthy.  There is presumably going to some really weird intermediate stage where scarcity is still a thing -- so that lots of people need to work -- but where free market capitalism allocates wealth in a highly unequal manner (my guess anyway).  We're not there yet, but we've gotten little tastes of this with trade and current levels of technological advancement.  That transition will be difficult, but the ultimate end result is going to be just fine for the people who are there on the other side.
Click to expand...
Or there is a bloody class war that wipes out a big chunk of humankind.

 
mr roboto said:
:blackdot:  for the sheer collection of smart thoughtful posters in this thread. 

IK you teach economics?
Click to expand...
Yes, I'm a microeconomist.  Our entire discipline relies on the idea that resources are scarce, and so we need to study how they can best be allocated.  In most cases, a free market does a pretty good job of doing so.  In some other cases, the government can do a better job of allocating resources than the private sector.  In other cases, it might be best to leave things up the private sector, but with a government-produced tweak, like a carbon tax perhaps.

When scarcity goes away, things are totally different.  There's no longer an issue of "allocating" resources if everybody can just make whatever they want without diverting resources from anybody else.  This scenario is a long way off, but it will eventually happen.  

 
IvanKaramazov said:
Yes, I'm a microeconomist.  Our entire discipline relies on the idea that resources are scarce, and so we need to study how they can best be allocated.  In most cases, a free market does a pretty good job of doing so.  In some other cases, the government can do a better job of allocating resources than the private sector.  In other cases, it might be best to leave things up the private sector, but with a government-produced tweak, like a carbon tax perhaps.

When scarcity goes away, things are totally different.  There's no longer an issue of "allocating" resources if everybody can just make whatever they want without diverting resources from anybody else.  This scenario is a long way off, but it will eventually happen.  
Click to expand...
Land is finite.

 
IvanKaramazov said:
People can already do wills and tax returns with pretty rudimentary software.  Those sorts of things are what sustain people who work in law and accounting in lots of towns.  I imagine it will be a while before we see an AI defense attorney, but that will eventually happen.  Not in our lifetimes, but eventually.
Click to expand...
This is a big trend for accounting firms, though many are trying to resist it.  The fact of the matter is that basic tax accounting is becoming more of a commodity every day.  The real strategy, at least in our practice, is getting into wealth management and more complex niche tax areas.  I'm sure that over time, those things will be gobbled up by tech as well, but hopefully I'm far enough along to sustain it or it's not until after I retire.  I imagine if you talked to our founding partners in the early 70s, they never would've envisioned where the firm and where the industry are today.

 
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fatguyinalittlecoat said:
Land is finite.
Click to expand...
True, but what if we no longer had to devote hundreds of millions (billions?) of acres to agriculture?  And we could build vertically to add more surface area as needed?  I understand that this is science fiction material, but when I was in college, the notion that could walk around with a piece of magic plastic that had access to all of the world's combined information and a location device that could also allow you to talk with anyone on the planet was kind of nuts too.

 
IvanKaramazov said:
True, but what if we no longer had to devote hundreds of millions (billions?) of acres to agriculture?  And we could build vertically to add more surface area as needed?  I understand that this is science fiction material, but when I was in college, the notion that could walk around with a piece of magic plastic that had access to all of the world's combined information and a location device that could also allow you to talk with anyone on the planet was kind of nuts too.
Click to expand...
Vertical farms are really cool

 
The big movement of jobs over time looks something like this:

Hunter/Gather>Agriculture/Husbandry>Industry>Service

Technology has pushed the majority of jobs from one category to the next with increasing speed, and we're likely just at the beginning of another major technology driven shift. Automation, AI, and robots are going to displace millions of jobs and lower the human skill requirements/labor market differentiation of millions more.  

One of the trickier problems this time is that if you look at the movement in labor above, those changes took place gradually. Initially over millenia and centuries but even over decades in the 20th century so workers had plenty of time to adjust and reskill, generally from one generation to the next. Technology is evolving so rapidly today that skills in demand right now could be near obsolete in 5-10 years.

These are all reasons why I favor some kind of basic income setup. I can't imagine how in the not to distant future there will be anything but an overwhelming surplus of human labor.

 
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