You are being served, but your job may be about to disappear
Until a couple of weeks ago, China Daily had a coffee stand in the lobby. I’m not much of a coffee drinker, but I did sometimes enjoy taking a coffee break in the middle of the afternoon. Often, some colleagues would be waiting in line and we’d have a chance to catch up. The stand was staffed by a personable young lady, Xie Xinshuang, who impressed me because she was always studying when no customer was present.
Now, the coffee stand has been replaced by a machine. I guess we could call it a coffee robot.
By some measures, this is an improvement from a consumer’s point of view. I can get my coffee a little bit faster, it costs a little bit less, and it actually tastes a little bit better. Of course, there is nobody to talk with.
This is an example of a trend that is likely to dominate the world in the coming decades. Fortunately, China Daily was able to find another job for Miss Xie, but many jobs will be lost to the coming revolution in artificial intelligence driven by big data and machine learning combined with 5G telecoms and robotics.
In a widely reported recent study, researchers at the Oxford Martin School in the United Kingdom predicted that 47 percent of jobs in the United States are in danger of being eliminated by automation. McKinsey Global Institute estimates that 30 percent of jobs worldwide will be eliminated by 2030.
Of course, we’ve heard predictions like this before. Kurt Vonnegut’s portentous 1952 novel Player Piano described the unproductive lives of workers displaced by automated factories.
Vonnegut was especially incisive in that he predicted three factors we are seeing today: people are unhappy without jobs, even if their physical needs are provided for; economies become more monopolistic as automation increases; and people with high measured IQs and who went to the right schools have good opportunities, but everybody else is shut out.
Twenty years ago, during the first wave of the internet, I was very enthusiastic about the changes I thought would happen in society. I thought that the internet would allow entrepreneurs all over the United States, all over the world, to compete, so we would see a much more dynamic and competitive economy.
In the realm of ideas and policies, I was looking forward to hearing from many voices, instead of the few large television networks and newspapers that had long dominated the US.
But I’ve been proven wrong on both counts.
The US economy is now dominated by a few monopolies. Google and Facebook make their large returns on invested capital because they have a combined nearly monopolistic position over online advertising. The owners share some of their profits with their workers in the same way that the big three automakers — General Motors, Ford, and Chrysler — did in the 1960s when they had an oligopoly in the then-closed US car market.
Now, the number of entrepreneurial startups in the US is at an all-time low. Even in technology fields, the small number of large companies — Google, Facebook, Amazon, Apple and Microsoft — either buy up promising startups or put them out of business. Plus, these companies actively suppress the flow of new ideas.
What I fear most is the “California-zation” of the world economy. To outsiders, California looks like a dynamic, innovative economy. But it is now an economy of fabulous wealth for a few, a declining middle class, and large numbers living in poverty. Data from the Census Bureau for 2010 to 2017 show that the state had the second-highest rate of domestic out-migration in the US — mostly middle-class people fleeing high taxes and very high housing costs. Only New York state had a larger portion of people deciding to leave.
Last year, only 26 percent of households in California earning the statewide median income could afford to buy a median-priced house, compared with 53 percent nationwide. And, with 12 percent of the US population, California has more than 25 percent of the nation’s homeless population.
According to a recent research brief by the Center for Demographics and Policy at Chapman University, two-thirds of the state’s job growth has been in minimum wage or near-minimum wage jobs. The high wages for tech workers in the San Francisco Bay Area have not offset the loss of 423,000 manufacturing jobs in the rest of the state over the past 15 years.
And, California has the second worst GINI coefficient — a measure of inequality — in the US, behind only New York. Its inequality level is now worse than that of Mexico, with 48.5 percent of the state’s children living in or near poverty.
As recently as the 1980s, California was the golden state, with the best education levels and the lowest poverty in the US.
Adjusted for cost levels, it now has the second highest rate of poverty in the US. And, due to low math and reading scores and high dropout rates, its schools rank ninth worst in the US.
Every country in the world needs to find a way to avoid this situation. The coming technology has the potential to benefit mankind, but all its benefits must not be allowed to go to a few monopolistic companies and a small number of people.