Within the context of automation and artificial intelligence, this topic has been on my mind for years. So much so that in addition to Epoch and The Epoch Podcast, I have a podcast called Evolving Parent that is built around this idea and setting parents, and hence their children, up for success.
For years, I’ve been looking at the developments in technology, the anticipated developments, and wondering how we transition into a world where human labor is valued far less than it is now.
While machines and software require maintenance, the costs associated with that maintenance pale in comparison to the costs of medical insurance, sick leave, maternity leave, training, and the opportunity costs of a human only being able to work so many hours before overtime kicks in and then exhaustion kicks in, greatly increasing human error and the costs of human error.
I find it fitting that the first dedicated digital voice recorder I bought was for the purpose of recording a conversation about universal basic income (UBI) I anticipated having during a road trip for one of Epoch’s first business trips. Sadly, I got so into the conversation that I didn’t even get that recorder out of my bag…whoops!
Now, we’re having the conversation and everyone has done their homework before I spring the question on them: If universal basic income isn’t the answer or part of the equation, how do we transition into a new economy where human labor isn’t the driver it once was?
Appropriately, this conversation will take place, not in the sausage fest of a van on the road, but with both men and women ready to voice their perspective.
Between that road trip and now, my children have grown and I’ve begun to realize the impact that this new economy will have on not only me, but my children who will graduate in the coming decade and walk face first into a job market that has become increasingly competitive and increasingly less dependent on them.
Going by basic market supply and demand, if the supply of workers remains about the same, but the demand for human labor drops in a way that it never has before, it doesn’t look good for people trying to earn a living or to even break into a job market with zero work experience.
But is this drop in demand for human labor a new thing? Not exactly. It’s kind of happened before on several occasions when new technology displaced workers. Going back to 1900, 2 out of 5 workers were farming. A hundred years later, 2 out of 100 workers are farming. Yet the unemployment rate is about the same.
It wasn’t a good thing to be in a horse-related business when the automobile caught on either, but that’s an example of one job-filled industry replacing another.
In the digital age, older companies that don’t survive the changing times have been repeatedly replaced by companies that employ new strategies, software, equipment, and a fraction of the labor force. Some of the highest-valued corporations in the world can be considered small businesses by employee count.
With jobs being automated away, it’s increased stress on a system not designed for an automated economy.
UBI is a system that says everyone is allotted a certain amount of money, regardless of whether they make $0/year or
It’s financed by getting rid of welfare programs that have significant administrative costs, taxing companies that are benefiting the most from automation, and a value added tax (VAT).
While this isn’t a political blog, I do find it to be quite a politically-charged topic and people tend to suggest solutions based on their political lens of choice. I think it’s worth mentioning that I’m very much for a limited federal government. I’m not a fan of legislating morality and I believe in the individual.
Which is maybe why I keep searching for a non-government led alternative to UBI, or any alternative. Maybe humanity reaches a point of maturity where UBI isn’t necessary, but we are not there now.
Whether through decreasing the hours of what is considered “fulltime” and “overtime” or simply paying people for existing via UBI, I think we will see a continued evolution in how people identify and develop their sense of purpose. I think there’s significant potential for an occupation to no longer be THE source of so many people’s sense of worth.
But I don’t think that’s necessarily a bad thing, despite my fevered search to provide my kids with the skills needed to succeed in an economy that’s being turned on its head. If we had more free time to pursue passions, but could still pay the bills, would that be a bad thing?
My lovely wife has repeatedly reminded me of people who wouldn’t do anything with their lives in a world with UBI. My response to her has been to say that there are people who don’t do anything with their lives right now as they receive handouts. At least with UBI, the system is streamlined.
Jobs that include repetitive tasks are the low-hanging fruit for automation. Dangerous jobs are also prime candidates. However, white collar jobs are also at risk, one being the role of stock trader, which has already experienced a 33% drop in employment numbers.
Career fields that seem the safest right now are fields that deal with creativity and relationships. The caveat to those fields is that people are beginning to see where employment is heading. Fewer people are training to be truck drivers, because of automation. More and more people are pointing their career compass at jobs that should be safe for at least a few decades. This likely means more competition for those jobs, although the size of the pie could always increase.
Change is coming. Worrying about it will not help. Prepare for it. Prepare your loved ones for it. We can get through it together.