The Coming job-ocalypse

Everyone claims to want a job, or at least, the opportunity to work. Politicians routinely promise they have some kind of magic formula that will provide everyone with a high-paying, stimulating, but not-too-demanding task.

But the reality is that jobs are going away. Forever.

Already some 22 million manufacturing jobs were lost globally between 1995 and 2002, even as industrial output increased by 30%. Recently, a Chinese car manufacturing plant cut 90% of its workforce and replaced them with robots. Productivity at the factory increased 260% as a result. And the pace of human obsoletion is increasing – the city of Donguan (a city containing 6.5 million people and a major manufacturing hub) has announced plans to finish up to 1,500 “robot replace human” programs by the end of the year. Foxxcon, a major electronics manufacturer, has announced its intention to replace 70% of its 1.2 million-person workforce with robots.

Warren Bennis eloquently summarized this; “The factory of the future will only need two workers, a man and a dog. The dog is there to make sure no one touches the machine, and the man is there to feed the dog.”

Ok, that’s a joke.

In reality, we’ll get to the point when both the man and the dog will be out of work; the only thing the factory of the future needs is a consumer. Luckily, humans are very good at wanting and consuming stuff they don’t particularly need, so the factory will have plenty to do.

This isn’t contained to factories – even jobs traditionally thought of as ‘high-end’ and ‘white-collar’ in the financial sector are being eliminated. High-frequency trading is taking over Wall Street. Financial advisors are being replaced by “Robo-advisors.” Even new niche financial products like Peer Lending are dominated by robotic advisors like LendingRobot.

But instead of being afraid of the lack of human work, a question one must posit is: does a job make a person happy, or does the money derived from that employment make a person happy?

Results from a 16-year study in the American Economic Journal have found that there is a positive relationship between the amount of money a family makes and happiness, but that “once one controls for the differential effects of persistent and transitory income shocks, employment per se does not contribute to a person’s wellbeing.”

In other words, people enjoy the security and peace of mind that a job brings, but most do not enjoy work itself.

As prophesied 20 years ago by Jeremy Rifkin in The End of Work:

“[T]he commodity value of human labor is becoming increasingly tangential and irrelevant in an ever more automated world … new ways of defining human worth and social relationships will need to be explored.”

We may lament the loss of jobs, but to what end? If humans play the cards right, the boring, unfulfilling, and mundane work will be passed off to autonomous machines, allowing human culture, arts, and sciences to grow and flourish like never before. Let’s go with the flow, and celebrate the job-ocalypse.

Group 2

3 Comments

  1. Andy Hodges says:

    Very good article.

  2. Frank says:

    That’s a very good article but I have to point out something fundamental in this equation [Consumer] . If you don’t have them [the majority of them wouldn’t have a job] why do you need to produce more if you won’t have people to consume the [stuff] you’re producing with Robot.

    1. Hello Frank,

      Money is (supposed to be) a way to distribute scarce resources. Right now workers trade a scare resource (time) for money, then trade money for other scarce resources. A particular resource’s price is set at the equilibrium between demand and price. I suppose in this article that most workers don’t like trading their time. Time is, after all, a very non-renewable resource, and most workers would take the deal if there were a way to obtain the scarce resources desired without trading their time for it.

      If the value of a worker’s time drops to near-zero, demand for a particular good or resource doesn’t disappear, but the method of distribution becomes a more tricky problem. Like I quote Jeremy Rifkin in the article – we’ll need to explore new methods to define what human worth means in a world where human capital is irrelevant.

      A robot factory doesn’t specifically require money to survive; it requires raw inputs to create a good, and a consumer to use that good. The signals the robot factory uses to determine how much of something to produce may or may not be money.

Leave a Reply

Website Protected by Spam Master