Automation and Employment: The Future of Work
While ‘job production’ sounds like a necessary mechanism for an economy grappling with an unemployment problem, it is also (ambiguously) the definition for the process by which items are made in discrete quantities based on orders placed with producers. In other words, it was the predecessor method (though not obsolete, just unpopular) to mass production, the latter which made items en-masse for the masses. Mass production transferred the initiative for choosing products from the hands of the consumer to the producer. Its advent brought producers together to collaborate, enabled stocked shelves in stores and, widened the time horizon between production and full reimbursement, by introducing economies of scale.
The History of Production
Based on the principles of specialization and division of labour from Adam Smith’s ‘The Wealth of Nations’ in 1776, from Eli Whitney’s conception of the uniform part and the cotton gin to Henry Ford’s moving assembly line (inspired by conveyor belts in grain production and slaughterhouses), mass production inspired cost-cutting, time-saving innovations globally, putting more goods in the hands of more consumers. The next dramatic change in the timeline of methods of production, was when Japanese companies introduced lean production and just-in-time manufacturing methods. The relationship between consumers and producers truly shifted back to vest more decision-making power in the hands of the latter with the coming of online shopping, by introducing a heightened element of choice and product diversification that had been set in motion decades ago when Proctor and Gamble brought branding to the fore. For a brief summary of production, watch the following video.
What can be described as the next big change in the manufacturing world comprises both increased individual worker productivity through artificial intelligence technology and additive manufacturing in the form of 3D printing. Automation is spreading to various parts of the world through industries ranging from consumer goods to healthcare, and 3D printing is a part of that process because it assists low volume production and market specific tailoring of goods when global supply chains are getting shorter.
But there is an inevitable threat to human labour and employment, quite unlike the threats to jobs from the industrial revolution and later the technology boom, which were at the end processes of creative destruction that newer avenues of work. While the Automated Teller Machine (ATM) invalidated the role of the bank teller, a larger number of new consumers took to banking due to innovation and cost-reductions, leading to newer service jobs related to bank account registrations, customer service and portfolio management.
Lessons for the Future
The threat to jobs from artificial intelligence is based primarily on the premise that advancing algorithms programmed into humanoid devices could increasingly mimic and improve upon predictable work, work that mostly comprises what is done by unskilled human labour. This sets up a large and credible threat to several human workers, one that needs retraining provisions and investments in R&D to regale a process of creative destruction that keeps jobs safe. Looking back at what made Ford’s Model T the popular and ground-breaking product that it was, there are some lessons for the impending realities.
"In such a recognition of scale, workers made marginal improvements to their skill sets through their work but also through their new disposable income, while inevitably improving their leisure and personal lives. The key now, to enabling unskilled/semi-skilled workers could be endowing them with both the money and the incentive to readjust themselves to the demands of the market."
The moving assembly line was among the first of its scale to socialize labour and bring not just products but also production processes to a larger number of people. Ford’s recognition of scale was what also helped him realize that his workers constituted a web of interlinked economic agents with consuming power, to which he responded by paying them double the market wage, thereby boosting his sales. In such a recognition of scale, workers made marginal improvements to their skill sets through their work but also through their new disposable income, while inevitably improving their leisure and personal lives. The key now, to enabling unskilled/semi-skilled workers could be endowing them with both the money and the incentive to readjust themselves to the demands of the market. If the markets begin to require them to compete or work alongside efficient robots, such an investment in human capital either through retraining programs covered as a welfare scheme, or privately sought programs whose purchase is enabled by income endowments such as ‘Universal Basic Income’ or retraining subsidies, is necessary. All of this would have to be done while keeping a close watch on income disparities between the corporate entities, increasing their profit margins through adoption of automated technologies and assuaging the workers who are likely to lose out in the process.
Although data-based predictions support the ‘rise of the robots’ alongside grim indicators such as declining investment in labour and stagnant labour supplies in certain fields, there seems to a blatant ignorance of the socio-political implications of ‘robots replacing workers’. It cannot be without significant political resistance that companies get their way, nor can it be without economic barriers such as taxes and tariffs that reduce the margin and the incentive to replace human work. There need to be concerted efforts that consider the possibilities of incentivizing positive advancement in the workplace, where the replacement of an unskilled worker does not displace that worker, but allows him to reinvent his craft and apply it elsewhere. There is also a need for removing stigma from quick hiring and firing, similar to the Flexicurity model in Denmark. Sectors where hospitality and a human element of empathy matter will see a glut in job applications, and will offer lessons for the future of the market, as production is likely becomes second nature and the service sector starts hosting a larger share of the human capabilities of the world.
Hanna Barbera’s ‘Jetsons’, a middle-class family living in the early 2060s and originally depicted in a television program from the early 1960s depicted a fictional automated world where George Jetson, married to Judy Jetson, a full-time homemaker who’s assisted by a robot maid named Rosie have two kids and enjoy high material living standards. The family has chosen to take the cumulative 418 percent increase in income (2.5 per year) by reducing hours worked to one quarter (9-hour workweek) of present-day standards rather than vastly increased consumption. Mike Konczal rightly linked this to JM Keynes’ essay on “The Economic Possibilities for Our Grandchildren” highlighting the consequences of a super-abundance of material prosperity.
The prosperous and symbiotic world depicted in the Jetsons, which we are vehemently in favour of, is one where automation and technological advancement has enabled robots and humans to live in harmony and erase poverty from our collective dictionaries. They could embrace automation and turn it to their advantage. For our future to resemble that of the Jetsons will require social, educational, anthropological and social transformation that brings together the concerted efforts of the rich, the poor, the middle and the political class.
Article has been updated for accuracy.
About The Author
Balasubramanyam Pattath is a Research Associate at the Indian School of Business. He holds a Masters in Development Studies at the Graduate Institute of International and Development Studies, Geneva. Originally from Kerala, India, Balu has a Bachelor in Economics from the University of Delhi. His interests and past work concern migration, demography, labour and, employment. He has served as the co-chief editor of the Hans Raj college Economics journal in 2014-15. During his undergraduate studies, Balu was an active quizzer and respected quizmaster.