Job insecurity is a central theme of the 2016 campaign, fueling popular anger about trade deals and immigration. But economists warn that much bigger job losses are ahead in America – driven not by foreign competition but by advancing technology.
A look at the numbers suggests that America is having the wrong debate this year. Economic security won’t come from renegotiating trade deals, as Donald Trump claimed in a speech in Detroit last Monday, or rebuilding infrastructure, as Hillary Clinton argued in Warren, Michigan, Thursday. These are palliatives.
The deeper problem facing America is how to provide meaningful work and good wages for the tens of millions of truck drivers, accountants, factory workers and office clerks whose jobs will disappear in coming years because of robots, driverless vehicles and “machine learning” systems.
The political debate needs to engage the taboo topic of guaranteeing economic security to families – through a universal basic income, or a greatly expanded earned-income tax credit, or a 1930s-style plan for public-works employment. Ranting about bad trade deals won’t begin to address the problem.
The “automation bomb” could destroy 45 percent of the work activities currently performed in the United States, representing about $2 trillion in annual wages, according to a study last year by the consulting firm McKinsey & Co. We’ve only seen the beginning of this change, they warned. Currently, only 5 percent of occupations can be entirely automated, but 60 percent of occupations could soon see machines doing 30 percent or more of the work.
The McKinsey analysts sharpened their argument in a new paper released last month. Their estimates, based on U.S. Bureau of Labor Statistics data covering more than 800 occupations, drew a shocking picture of the future. In manufacturing, 59 percent of activities could be automated, and that includes
“Ninety percent of what welders, cutters, solderers and brazers do.” In food service and accommodations, 73 percent of the work could be performed by machines. In retailing, 53 percent of current jobs could be lost.
White-collar workers may imagine that they’re safe, but that’s wishful thinking. If computers can be programmed to understand speech as well as humans do, 66 percent of jobs in finance and insurance could be replaced, for example, McKinsey warns.
Robots are replacing workers around the world. The density of robots per 10,000 workers is actually higher in Japan and Germany than in the U.S, according to the White House Council of Economic Advisers. In last February’s “Economic Report of the President,” they cited research noting that “middle-skill” employees, such as bookkeepers, clerks and assembly line workers have been replaced first, but that “big data and machine learning will soon make it possible to automate many tasks that were difficult to automate in the past.”
Workers are already reeling from the job implosion we’ve seen so far. A study released last week by Bruce Stokes of the Pew Research Center found that 89 percent of Americans surveyed thought that “the loss of U.S. jobs to China” was a serious issue. That anxiety translates into growing skepticism about free trade. As of March, 51 percent of Americans still thought free trade deals were a good thing, but that was down from 59 percent two years ago.
Pew data shows that the people most likely to oppose trade deals are older white men, the people whose former job security has probably been most affected by the modern, global economy. Free trade agreements are supported by 54 percent of women; 55 percent of blacks; 67 percent of young adults between 18 and 29; and 72 percent of Hispanics. Young, diverse Americans seem to accept the disruptions that are part of the global, high-tech economy.
This campaign has distilled the populist rage at elites who are seen to have benefited from globalization while some blue-collar workers have suffered. This anti-elitism is only likely to grow as vast new sectors of the economy are transformed by the Silicon Valley technologies that have created a new class of American billionaires. People shouldn’t hate the future, or the technologists who are building it, but this anger could become a polarizing fixture of the national mood.
Politicians need to begin thinking boldly, now, about a world where driverless vehicles replace most truck drivers’ jobs, and where factories are populated by robots, not human beings. The best way to cushion this future is to start planning for how Americans will be able to take care of their families – and find meaningful work – in a world where most traditional jobs have vanished.
David Ignatius is published twice weekly by THE DAILY STAR.