The real structural problem of the American labour market can’t be seen close up, so let’s take a few steps back and look at the productivity trap the USA is currently in and the price that Americans are paying right now for technological progress.
Moving the factories of the biggest international corporations to cheap labour China, and more recently increasingly to India or Indonesia, isn’t a new phenomenon or one that can be solely observed in the American economy. In the XIX century David Ricardo described his theory of comparative advantage, which states that countries should specialise in the areas where they fare better than others. In the recent decade the United States has taken advantage of increasing globalisation and capital mobility and focused on building an economy based on knowledge, services and new technologies, while production was gradually shifted to countries which could more easily achieve economies of scale. The value added to the economy as a result of a month’s work of a programmer or lawyer is usually higher than that of a car factory worker. In short we can say that the USA is betting on trading intellectual capital for goods produced abroad. As opposed to a factory, whose opening requires large outlays of capital and labour (building the factory, resources, etc.), creating a new job in Silicon Valley involves a minimum amount of labour in comparison to the financial benefits.
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Technological innovation has become in recent years both the main U.S. competitive advantage and the source of its structural labour market problems. Americans find it increasingly hard to find a job and competition on the labour market is causing ever slower wage growth, which obviously implies lower demand for many types of goods. Additionally, innovation has created an economy based on automation. Apps, software, robots, machines -- they are all effects of innovativeness. American producers of robots are already saying that investments in machines are more profitable than hiring people. Technology enables lower levels of human labour outlays, but the economy doesn’t allow these people to survive.Work first fled to Asia. Currently it is being automated. Will it be gone soon? The global economy is created by machines, which generate and analyse huge quantities of data. Using smart phones or tablets people can work from anywhere on the globe, even on the go. Whole categories of jobs, such as travel agents, are starting to disappear. Ever since the 1980s the functions of stockbrokers are being taken over by intelligent algorithms, which are better than humans in capturing changes in stock prices and thus can earn money on those changes, by digitally buying and selling equity. Computer programs are also being employed to analyze large datasets (Big Data). Even a journalist’s work can be done by an intelligent programme. There will also be reductions in office and administrative work. In this sector work is often repetitive. The digitisation of document flows and using the right programmes could greatly shorten and speed up this work, leading to job reductions of the suddenly not needed humans.
Robotisation is the final frontier of the world of work. This is because if a machine can do something, it is only a matter of time before it does this in a cheaper way than a human would. Robots are becoming cheaper and quicker, more precise, which has drawn many economists and advanced technologies specialists to the debate about the disappearance of jobs and substitution of workers by machines. According to the Massachusetts Institute of Technology (MIT) economists Erik Brynjolfsson and Andrew McAfee, the authors of the book "Race Against the Machine" the coming of the era of cheap production automation is a prelude to dramatic changes on the labour market. Other studies confirm this. In a recently published paper titled: "The Future of Employment: How Susceptible are Jobs to Computerisation” two researchers from Oxford University, C.B. Frey and M.A. Osborne, created a model which calculates the probability of substituting a worker in a given sector. The results of their study can be shocking for hundreds of thousands of people working in transport, production, sales and services. This is because Frey and Osborne have come to the conclusion that 47 percent of active workers may be replaced by machines in the future. Isn’t Burgeon, a machine created by the company Momentum Machines, which is able to replace a kitchen worker and produce 360 hamburgers an hour -- that’s basically one burger every 10 seconds -- the ideal example for this?
Turns out it is not! An apocalypse on the labour market will not take place. Robots won’t replace us because until the last human need will remain unsatisfied, there will always be incentives for work. It is work which has created contemporary humans, because due to work they had to climb down the trees and form groups of co-workers toiling, for example, in the construction of a defensive structure, which required learning how to communicate, work together, have empathy for others, to help, acquiring culture and social skills. If not for human needs, including relational needs based on joint work or commercial trade, humans might well still be sitting in trees. Needs generate inventions, but they also lead to idleness, according to philosopher Jean-Paul Sartre. Likewise robots are the expression of innovativeness and human laziness. No robots work under this definition of the word -- robots only conduct tasks they were programmed to do by humans, who in this way pursue their goals and desires. Therefore the "work" of a robot only boils down to performing mechanical tasks. Real work is based on realising human needs.
Work is always for someone or for yourself, in order to fulfil your needs or the needs of someone else. The optimal situation is self-fulfilment coupled with meeting these needs. But if this isn’t the case then meeting someone’s needs is remunerated, usually financially. Needs don’t exhaust themselves. They may well change.
The changes on the labour markets of developed countries have a very strong influence on social structures. The times when these processes could be stopped are firmly in the past. Now all you can do is adapt. Industry will use brains, not muscles. Technological progress will ensure that the biggest barrier to achieving goals will not be technical issues but will reside in human minds. Thus the role of various types of training, services and specialised skills will increase. We will start doing work 2.0 -- flexible, contract-based, hyperspecialised, mobile work demanding the ability to change your qualifications. This work will be based on creativity -- the skill of complex thinking. This is something machines don’t have.
In the long run even cheap labour in China won’t be cheap enough to maintain human employment. An increasing number of robots will pervade our lives and work. Resistance to new technologies has always been present and this will remain so in the future. On the other hand history has proven that Victor Hugo was right to say that "nothing can stop an idea whose time has come.” We are bound to progress, and it is up to us whether we win or lose.
Prokurat is an economist and historian, and the author of "Work 2.0: Nowhere to hide” (2013). He is currently a lecturer at University of Euroregional Economy and ISG Paris.