The robots are coming, and Sweden is fine
GARPENBERG, SWEDEN — From inside the control room carved into the rock more than half a kilometre underground, Mika Persson can see the robots on the march, supposedly coming for his job here at the New Boliden mine. He’s fine with it. Sweden’s famously generous social welfare system makes this a place not prone to fretting about automation — or much else, for that matter.
Persson, 35, sits in front of four computer screens, one displaying the loader he steers as it lifts freshly blasted rock containing silver, zinc and lead. If he were down in the mine shaft operating the loader manually, he would be inhaling dust and exhaust fumes. Instead, he reclines in an office chair while using a joystick to control the machine.
He is cognizant that robots are evolving by the day. Boliden is testing self-driving vehicles to replace truck drivers. But Persson assumes people will always be needed to keep the machines running. He has faith in the Swedish economic model and its protections against the torment of joblessness.
“I’m not really worried,” he says. “There are so many jobs in this mine that even if this job disappears, they will have another one. The company will take care of us.”
In much of the world, people whose livelihoods depend on paycheques are increasingly anxious about a potential wave of unemployment threatened by automation. As the frightening tale goes, globalization forced people in wealthier lands such as North America and Europe to compete directly with cheaper labourers in Asia and Latin America, sowing joblessness. Now, the robots are coming to finish off the humans.
But such talk has little currency in Sweden or its Scandinavian neighbours, where unions are powerful, government support is abundant, and trust between employers and employees runs deep. Here, robots are just another way to make companies more efficient. As employers prosper, workers have consistently gained a proportionate slice of the spoils — a stark contrast to the United States and Britain, where wages have stagnated even while corporate profits have soared.
“In Sweden, if you ask a union leader, ‘Are you afraid of new technology?’ they will answer, ‘No, I’m afraid of old technology,’” says the Swedish minister for employment and integration, Ylva Johansson. “The jobs disappear, and then we train people for new jobs. We won’t protect jobs. But we will protect workers.”
A cushion for innovation
Americans tend to dismiss Nordic countries as a realm of nannystate-worshipping socialists in contrast to the swashbuckling capitalists who rule in places like Silicon Valley. But Sweden presents the possibility that, in an age of automation, innovation may be best advanced by maintaining ample cushions against failure.
“A good safety net is good for entrepreneurship,” says Carl Melin, policy director at Futurion, a research institution in Stockholm. “If a project doesn’t succeed, you don’t have to go broke.”
Eighty per cent of Swedes express positive views about robots and artificial intelligence, according to a survey this year by the European Commission. By contrast, a survey by the Pew Research Center found that 72 per cent of Americans were “worried” about a future in which robots and computers substitute for humans.
In the United States, where most people depend on employers for health insurance, losing a job can trigger a descent to catastrophic depths. It makes workers reluctant to leave jobs to forge potentially more lucrative careers. It makes unions inclined to protect jobs above all else.
Yet in Sweden and the rest of Scandinavia, governments provide health care along with free education. They pay generous unemployment benefits, while employers finance extensive job training programs. Unions generally embrace automation as a competitive advantage that makes jobs more secure.
Making the U.S. more like Scandinavia would entail costs that collide with the tax-cutting fervour that has dominated U.S. politics in recent decades.
Sweden, Denmark and Finland all spend more than 27 per cent of their annual economic output on government services to help jobless people and other vulnerable groups, according to data from the Organization for Economic Cooperation and Development. The U.S devotes less than 20 per cent of its economy to such programs.
For Swedish businesses, these outlays yield a key dividend: Employees have proved receptive to absorbing new technology.
“If we don’t move forward with the technology and making money, well, then we are out of business,” says Magnus Westerlund, 35, vice chair of a local union chapter representing labourers at two Boliden mines. “You don’t need a degree in math to do the calculation.”
At the mine below the frigid pine forests in Garpenberg, 177 kilometres northwest of Stockholm, Persson and his co-workers earn about 500,000 krona per year (nearly $60,000). They get five weeks of vacation. Under Swedish law, when a child arrives, the parents have 480 days of family leave to apportion between them. No robot is going to change any of that, Persson says.
“It’s a Swedish kind of thinking,” says Erik Lundstrom, a 41year-old father of two who works alongside Persson. “If you do something for the company, the company gives something back.”
Daunting job projections
That proposition now confronts a formidable test. No one knows how many jobs are threatened by robots and other forms of automation, but projections suggest a potential shock.
A 2016 study by the World Economic Forum surveyed 15 major economies that collectively hold two-thirds of the global workforce — about 1.86 billion workers — concluding the rise of robots and artificial intelligence will destroy a net 5.1 million jobs by 2020.
A pair of Oxford University researchers concluded that nearly half of all U.S. jobs could be replaced by robots and other forms of automation over the next two decades.
When automated teller machines first landed at bank branches in the late 1960s, some foresaw the extinction of humans working in banks. But employment swelled as banks invested the savings into new areas like mortgage lending and insurance. Similar trends may play out again.
Yet even if robots create more jobs than they eliminate, large numbers of people are going to need to pursue new careers.
Sweden and its Nordic brethren have proved successful at managing such transitions. Job security councils financed by employers help people who lose jobs find new ones.
Maintaining Sweden’s social safety net also requires that the public continue to pay tax rates approaching 60 per cent. Yet as Sweden absorbs large numbers of immigrants from conflict-torn nations, that support may wane. Many lack education and may be difficult to employ. If large numbers wind up depending on government largesse, a backlash could result.
“There’s a risk that the social contract could crack,” said Marten Blix, an economist at the Research Institute of Industrial Economics in Stockholm.
For now, the social compact endures, and at the Boliden mine, a sense of calm prevails.