AI ALREADY HARD AT WORK AT BIG BANKS
At a Calgary branch of ATB Financial, one of the bank’s latest recruits educates customers about financial literacy, plays music, challenges them to an impromptu dance-off and, naturally, takes a selfie.
Pepper, the new hire, doesn’t have the most sophisticated skill set at this point — for one thing, she can’t make financial transactions — but she’s made a big leap forward in becoming the first customer service robot in Canadian banking.
At some point, Pepper, developed by SoftBank Robotics Corp., could be programmed to do more complicated tasks. But for now, Edmonton-based ATB Financial is more interested in gauging how people react and figure out which customer situations the robot best fits in. “This isn’t … the world’s going to be run by
A dystopian future in which inefficient human workers are no longer necessary is becoming easier to imagine as driverless cars, artificial intelligence and anthropomorphic robots improve. But such a scenario would deplete the government of much-needed income tax revenue at a time when it would need the cash more than ever to help displaced workers.
It was something Mady Delvaux, a member of the European Parliament from Luxembourg, certainly could envision, and in 2016 she authored a report suggesting governments should recover lost tax revenue from workers displaced by automation and redistribute it to people in need. In short, she proposed a tax on robots.
“It was not a very popular idea,” she said, and the European Parliament rejected it last February, with critics saying such a tax would stifle innovation and make conditions worse for workers.
But then Delvaux’s idea received an endorsement from an unexpected source the very next day: Bill Gates, who told online publication Quartz that a robot tax has merit.
“Bill Gates is a great man and more intelligent than I am,” she said. If intelligent people have this idea, it must not be so stupid.”
Of course, putting a tax on robots is easier said than done. For one thing, regardless of how such a tax is structured, it’s almost certain to have unintended consequences — and may well make unemployment worse, by decreasing productivity and incenting companies to invest in less tax- happy places. A 2016 report by the Brookfield Institute for Innovation and Entrepreneurship suggested 42 per cent of Canadian jobs are at a high risk of being automated over the next two decades. However, that doesn’t mean four in 10 Canadians will be out of work, since new jobs will also be created, many because of automation.
“The narrative that robots necessarily take away jobs in itself is not necessarily valid. It is true in certain locations or certain industries, but it is not a general truth,” said Rosalie Wynoch, a policy analyst at the C. D. Howe Institute. “To resist technology isn’t really an option, especially in a globally competitive environment.”
Michael Mandel, chief economic strategist at the Progressive Policy Institute and co- author of “The coming productivity boom: Transforming the physical economy with information,” takes issue with the very premise that automation will cause an increase in unemployment.
He believes the reason income growth has been stagnant in the U.S. since the financial crisis is low productivity — a problem that can be solved with more automation, not less.
“Generally speaking, the history has been, we invest in capital equipment, that makes people more productive and they get paid more,” Mandel said. He cited the example of assembly lines in factories, which ushered in the golden age of manufacturing employment.
“If we want to get our living standards up to do all the things we need to do, we need to get productivity up. If robots will help with that, that’s just a great thing.”
There’s also the problem of deciding whom to tax and for what. Gates suggested the tax could take one of two forms: either a direct tax on the robots themselves, or a more general tax on the corporate profits generated by increased efficiency.
Suggestions for a direct tax have included a sales tax on robots and an income tax based on the salary of the worker displaced by a machine. Gates said he doesn’t think there would be much backlash from the manufacturers of robots: “I don’t think the robot companies are going to be outraged that there might be a tax. It’s okay.”
But Wynoch said there are a number of problems with the direct taxation approach: it would be a disincentive to innovate, it would be hard to define what a robot is and companies could simply choose to set up shop in a country that doesn’t have such a tax.
“Does Canada want to compete with l abour, or does Canada want to push the cutting edge and try to become the high- tech, attractive country where we bring in jobs because we’re developing new technologies as opposed to trying to shut them out?” she said.
Economists generally see the idea of a general tax on corporate profits as more feasible and less distortionary. The tax could fund a universal basic income, retraining for displaced workers or other social safety net measures.
“We want to make sure people have the skills to be successful in this new environment,” said Sean Mullin, executive director of the Brookfield Institute for Innovation and Entrepreneurship. “Having a more robust social safety net makes sense to deal with situations where there’s more temporary displacement.”