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mong political observers, there is a widespread notion that U.S. President-elect Donald Trump will inherit an economy in the best of shape. Inflation is down to historic and desirable levels, the unemployment rate stands at 4.9% and U.S. economic growth is better than expected. Moreover, observers can’t help but hear Mr. Trump’s boastful rhetoric as soon as he steps onto the bully pulpit. But as promising as the picture might seem, it will be very difficult to carry off his promise of ‘getting back our jobs’ in the long term.

Since 1980’s and up to the 2000’s, the world has undergone immense changes. The most prominent and significant being that in the realm of technology. And, the internet generates new, mind boggling marvels with each passing day – and continues to do so. Through the ‘Internet of Things’ and automation people are experiencing massive changes in the way the world works while scientists are signing letters foreboding the dangers of the rising AI. U.S. politicians and the media have typically blamed offshoring [usually to China] and international trade agreements for wrecking the domestic economy. A University of California study asserts that approximately 14 million white collar jobs are susceptible to off-shoring [5]. Ron and Anil Hira, in their book “Outsourcing America, believe that US companies justify off-shoring by arguing that to create more jobs domestically through cost savings are “self-delusion.” (Ron Hira is a professor at the Rochester Institute of Technology and Anial Hira is a professor at Simon Fraser University.)

In other words, it is not the intervention of foreigners which leads to the scarcity of jobs but automation. There are two vocal camps on this issue: One believes that automation, instead of creating a paucity of jobs instead leads to the creation of more job opportunities. And the other camp remains certain that, despite the spread of AI and factory robots, their jobs will remain intact during the next coming years, as reported by a research paper issued by the non-partisan PEW Research Center. Experts surveyed by Pew called for a more optimistic approach: “many jobs currently performed by humans will be substantially taken over by robots or digital agents by 2025. But they have faith that human ingenuity will create new jobs, industries, and ways to make a living, just as it has been doing since the dawn of the Industrial Revolution”. However, there are dissenters as well.

Justin Reich, a fellow at Harvard University’s Berkman Center for Internet & Society, says: “Robots and AI will increasingly replace routine kinds of work − I’m not sure that jobs will disappear altogether, though that seems possible, but the jobs that are left will be lower-paying and less secure than those that exist now. The middle is moving to the bottom.”

One can see very clearly how technologies are replacing even white-collar jobs and thus breaking the presumption that only routine and repetitive jobs are at danger from automation. Take for example, the case of Enlitic: A deep-learning system that is now being tested in Australia. The software can diagnose diseases, analyze X-rays and identify cancer. Moreover, the field of medicine is not the only profession feeling the heat of automation. Jobs in the field of law are also vulnerable. There is software in existence that can rummage through dossiers of legal documents and easily pin-point the desired files.

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“Automation is now “blind to the color of your collar”, declares Jerry Kaplan, author of “Humans Need Not Apply”, a book that predicts upheaval in the labor market.

Another Perspective

The other camp, however, is trying to peddle a more positive future. Debunking the ‘lump of labor’ fallacy which states that there is a finite amount of work and automation, and hence opening a chasm between jobs and peoples, the proponents state that automating a task results in creating more tasks as more people or different processes are now required to operate that ‘automated’ job. Again quoting The Economist, “During the Industrial Revolution more and more tasks in the weaving process were automated, prompting workers to focus on the things machines could not do, such as operating a machine, and then tending multiple machines to keep them running smoothly. This caused output to grow explosively. In America during the 19th century the amount of coarse cloth a single weaver could produce in an hour increased by a factor of 50, and the amount of labor required per yard of cloth fell by 98%. This made cloth cheaper and increased demand for it, which in turn created more jobs for weavers: their numbers quadrupled between 1830 and 1900. In other words, technology gradually changed the nature of the weaver’s job, and the skills required to do it, rather than replacing it altogether,” says James Bessen, an economist at Boston University School of Law said.

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“We already have cars that talk to us, a phone we can talk to, robots that lift the elderly out of bed, and apps that remind us to call Mom. An app can dial Mom’s number and even send flowers, but an app can’t do the most human of all things: emotionally connect with her,” according to Pamela Rutledge, PhD and director of the Media Psychology Research Center.

When Mr. Trump assumes office on 20th January, 2017, he says that one of his first priorities, among other things, is to repeal the Trans-Pacific Partners or otherwise known as “TPP.” And Trump intends to lure back U.S. companies by offering lower taxes (if not through sheer brute force as displayed in his negotiations with the air conditioner manufacture, Carrier). And yet, at the same point, Trump promises more government spending e.g. Infrastructure development.   Economists generally agree that lower taxes and increased spending will increase U.S. debt which may potentially lead to a ruinous outcome for the US Economy. Nevertheless, Americans who voted for him count on his actions and his promises, including bringing thousands of jobs back to the US. Therefore, observers must consider the question: What is that is more dangerous? Off-shoring or Automation?

Osama Rizvi

Independent Economic Analyst, Writer and Editor. Contributes columns to different newspapers. He is a columnist for Oilprice.com, where he analyzes Crude Oil and markets. Also a sub-editor of an online business magazine and a Guest Editor in Modern Diplomacy.

His interests range from Economic history to Classical literature.

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