77 PERCENT OF JOBS IN CHINA, 69 PERCENT IN INDIA, AND 64 PERCENT IN ARGENTINA ARE AT RISK
The World Bank says that a country’s competitive advantage to become an international manufacturing center will no longer be its availability of cheap labor, but its capacity to have the latest generation of robots, 3-D printers, and other technologies that are transforming industrial production. “The use of new technologies to produce traditional manufactured goods will be disruptive in developing economies,” says Mary Hallward-Driemeier, senior economic adviser in the Finance, Competitiveness, and Innovation Global Practice at the World Bank Group and lead author of the report. “If labor represents a smaller share of costs, more production may happen in richer countries, closer to consumers. Fewer businesses may move to lower-cost locations and local firms will face steeper competition.”
According to the World Bank, the percentage of jobs threatened by automation will be 77 percent in China, 69 percent in India and Ecuador, 67 percent in Bolivia, 65 percent in Panama, and 64 percent each in Argentina, Paraguay, and Uruguay. The average among industrialized nations is 57 percent, and in the United States the figure is 47 percent. These percentages can be misleading, however, because some of the countries that are most threatened by automation, like China and South Korea, are buying up industrial robots as fast as they can in order to stay competitive.
As early as 2014—the year before President Xi Jinping announced his ten-year “robotic revolution” plan—China increased its annual purchase of industrial robots by 56 percent. And in 2015, as we saw in chapter 8, South Korea already had an average of 531 robots per 10,000 manufacturing workers, more than any other country. Singapore has an average of 398 robots per 10,000 manufacturing workers, Japan 305, Germany 301, the United States 176, Spain 150, China 49, Mexico 33, Argentina 16, and Brazil 11. China, because of its huge population, is still in the bottom half of this list, but with its massive purchases of industrial robots—and its policy of encouraging “factories without workers”—it is taking drastic steps to become an automated industrial power.
The vast majority of Latin American countries, on the other hand, have fallen asleep at the wheel. Their leaders don’t seem to be aware of the coming automation revolution and the impact it may have on their workforces. As part of my own job with the Miami Herald and with CNN en Español, I usually interview several dozen Latin American presidents and cabinet ministers a year, and I can count on one hand the number of those who are thinking about public policies to prepare for the growing threat of technological unemployment. In most countries in the region, robots are still seen as objects of curiosity or trivial news bits for techies. But these countries could suffer a rude awakening in the very near future when they realize their workers are no longer competitive with the increasingly cheaper and more efficient robots of the industrialized world. Unless they start thinking about solutions now, they will soon find it harder to diversify their economies away from raw materials and export more manufactured goods.
THE IDEA OF A UNIVERSAL BASIC INCOME
The theory that robots will be more productive, make the economy grow, and pay a salary to humans is gaining many followers, and not just among tech leaders like Zuckerberg. In 2018, the city of Stockton, California, planned to begin implementing an experimental, unconditional universal income of $6,000 to each of its residents. Ontario, Canada, launched a similar experiment in 2017, wherein some 4,000 residents would start receiving nearly $17,000 per year in the case of single people, and up to $24,000 in the case of couples. Other trials are being developed in Finland, Great Britain, and Kenya. Even techno-optimists like Diamandis are enthusiastically embracing this idea as a solution to technological unemployment.
It’s far from a new concept. Back in the sixteenth century, European humanist Juan Luis Vives wrote a philosophical text titled On Assistance to the Poor in which he proposed regular payments for everyone. Other thinkers like John Locke, Maximilien de Robespierre, Immanuel Kant, and John Stuart Mill were also interested in the idea. One of the main arguments in favor of a universal basic income is that it would save governments a lot of money—especially in hospital costs and health care services such as alcoholism and drug addiction programs—if jobless people had enough money to study a trade and remake their lives.
An experiment conducted in the 1970s in Dauphin, Canada, found that thanks to a universal basic income, hospital admissions for accidents and mental health problems were significantly reduced, and that high school graduation rates had increased. An experiment that took place in 2009 in London yielded similar results. Thirteen homeless people in the British capital were given the equivalent of $4,500 in cash with no conditions attached. A year later, eleven of them had a roof over their heads. Instead of using the money to buy alcohol or drugs, as some may have speculated, most of the subjects used the money to pull themselves up out of poverty, whether by taking courses or entering rehab programs.
“Poverty is fundamentally about a lack of cash. It’s not about stupidity,” says economist Joseph Hanlon. “You can’t pull yourself up by your bootstraps if you have no boots.” In other words, if people have to put all the money they have toward getting their next meal, they can hardly be expected to look more than a few hours into the future and will never be able to break the cycle of poverty.
CAN POOR COUNTRIES AFFORD A BASIC UNIVERSAL INCOME?
GiveDirectly, the nongovernmental organization that has made regular payments of more than $100 million to 26,000 people in Kenya over the past decade, argues that social subsidies currently given out by governments are much more expensive and inefficient than money given directly to the people. Plus, such subsidies need huge bureaucracies, which eat up a significant slice of social services budgets. “So why not give a basic cash income directly to the people?” ask the directors of GiveDirectly.
Many development economists say that, contrary to public belief, poor countries can afford to pay universal basic incomes. The reason is that these nations currently waste much more money in subsidies for water, electricity, and transportation—subsidies that benefit mainly the rich—than they would be spending for a universal basic income. If the rich and poor each receive a $1 subsidy per cubic meter of water they use, as is the case in many developing countries, a millionaire with the Olympic-size swimming pool in his backyard benefits the most. In other words, the government is subsidizing the rich man’s pool. Ideally, those resources would be redirected to the poorest, many economists argue.
WILL GIVING MONEY AWAY LEAD TO LAZINESS?
Critics, on the other hand, argue that people who receive a basic universal income will simply spend it on drugs or alcohol, or stop working, which would damage their self-esteem and overall health. Andrew McAfee and Erik Brynjolfsson, the MIT professors who coauthored the book The Second Machine Age, argue that a universal basic income would not only be difficult to implement in the United States for lack of funding but would also be counterproductive. The researchers, fearing that many people would take their basic income and stay at home, cite several studies showing that unemployment causes greater social problems than poverty, because people need a purpose in life. In many cases, the studies indicated that neighborhoods with high unemployment rates had more divorces, alcoholism, drug addiction, and suicide than other neighborhoods where people worked, even at menial jobs at minimum wage. “Of course, these social woes stem from many sources. But unemployment and underemployment no doubt contribute, and troubled communities would certainly benefit from more opportunities and incentives for work,” the professors say. The two MIT academics suggest that, instead of a basic universal income, governments offer tax breaks to those who work in order to reduce unemployment.
So who’s right? The answer might lie in improving a system of conditional cash transfers that started in Latin America about twenty years ago. Under social programs such as those adopted in Brazil, Mexico, and other Latin American natio
ns, heads of households in poor neighborhoods were given a basic cash income under the condition that their children be vaccinated or attend school. Often these programs degenerated into thinly veiled political subsidies where the conditions existed only on paper. But according to Ferdinando Regalia, an economist with the Inter-American Development Bank, the concept has great potential.
Regalia told me that contrary to what the skeptics speculate, a significant number of beneficiaries of conditional cash transfer programs in Latin America didn’t quit their jobs in the informal economy, nor did they spend their money on drugs or alcohol. Instead, they continue to work, selling tacos on the street or washing cars. If they aren’t able to find more formal jobs, it is primarily because they don’t have the necessary education. The solution, he said, is to enforce the conditionality of cash transfers and combine them with better education systems.
A GOOD IDEA: PAID COMMUNITY SERVICE
Why not give people a universal basic income in exchange for community service? I asked Regalia. He responded, “It seems fine at face value. My fear is that if it’s administered by the state, it could have high administrative costs and create a lot of bureaucracy.” However, it’s an idea that’s worthy of serious consideration. In many cases, it wouldn’t be necessary to create legions of inspectors to police those who provide social services. The local park caretaker would be responsible for making sure that someone was raking leaves for five hours a week, and a student’s parents or a teacher could sign off that someone had given private math lessons. It wouldn’t be easy, but given the magnitude of the social challenges that come with automation, new and innovative solutions will have to be tried, however complicated they might seem at first.
ALTRUISM, LIKE COCAINE, IS PLEASURABLE
Some may argue that it’s somewhat naive to believe that countries could require everybody to perform community services. But there are a number of scientific studies that show that doing good activates our brains’ pleasure centers and that people actually enjoy—given the right circumstances—performing good deeds. One of these studies was featured in a Nature magazine article titled “It’s Good to Give.” It involved a neuroimaging test in which several subjects were asked to make decisions about whether or not to give money to various causes or charities while undergoing an MRI of their brains. The study showed that “charitable donations activate the same neural systems as those that respond to monetary reward.” Translation: people liked donating money.
Facundo Manes, a clinical neurologist, neuroscientist, and author, told me that “being generous, being altruistic, activates the same brain reward systems that are stimulated by cocaine, or a cheeseburger, or money.” There is extensive scientific literature showing that virtues such as solidarity and cooperation are present among social animals like ants and bees. And there are many anecdotal examples of altruism among apes, such as that of the gorilla who rescued a three-year-old boy who had fallen over the barrier protecting the gorilla pit at Chicago’s Brookfield Zoo in 1996. The boy, who was unconscious after falling nearly twenty feet, was cradled by the female gorilla and carried to an access door where zookeepers and paramedics were waiting.
Other neuroscientific studies have found that human beings do good for reputational reasons. By helping others, we become admired, which in turn gives us pleasure. According to several experiments, we are more altruistic when a third party is witnessing our good deeds than when we are alone. Gilbert Roberts, a scientist at Newcastle University, showed that people who cooperate in a group setting are seen by other members of that group as being more attractive. So whether there are biological, psychological, or cultural reasons for altruistic behavior, why not take advantage of this phenomenon to promote community service as a way to help solve technological unemployment?
BILL GATES: ROBOTS SHOULD PAY TAXES
In order to finance a universal basic income or other ways to make up for jobs losses due to automation, Bill Gates has proposed taxing the robots. Gates sees robotics as a generally positive phenomenon, but he points out that if robots are doing jobs that people used to do, they should have to pay taxes on earnings, just as humans do.
“The human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, Social Security tax, all those things,” the founder of Microsoft told the digital tech magazine Quartz. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.” According to Gates, a workforce with a large number of robots would free up many human workers to perform social tasks that require warmth and empathy, which humans can still do better than machines. With more robots allowing more people to perform social work, we can “do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs,” he explained. If the jobs eliminated by automation can be channeled to this sort of task, “then you’re net ahead,” Gates said.
“THE NEW DIGITAL PROLETARIAT”
What will millions of workers do when robots take their places in factories and offices? Many will work remotely from their homes for online companies, becoming part of a new “digital proletariat.” Several years ago, when the use of the Internet exploded, there were hopes that the new digital economy would save the world, giving people much more dignified and environmentally sound jobs sitting in front of computers. But many of the new jobs produced by the digital economy ended up being temporary positions that pay very little and offer no benefits. They can provide a nice extra income to people who already have a primary job, but not much more than that.
According to the World Bank, there is already a labor market of more than 5 million people using websites such as Upwork.com and Freelancer.com to get temporary jobs. But the real figure is likely much higher: in 2014, Upwork.com, based in Silicon Valley, boasted of having more than 8 million registered online workers on its platform, along with 2.5 million employers. Upwork.com connects people offering to do online work with employers. Among those offering their services are web designers, software programmers, graphic designers, blog administrators, text editors, translators, transcribers, virtual secretaries, vendors, accountants, and people who read and answer emails for others.
When I checked the Upwork.com website recently, I found a woman named Aymee from Oklahoma who was charging $30 per hour for her services as a graphic designer. A young man named Amat from Pakistan was offering the same services for $18. Their profiles on the website—along with those of thousands of others—included information about their previous projects, their fees, and the evaluations they had received for their past jobs. That way, an employer looking for a freelance graphic designer can go to Upwork.com, interview several candidates online, and hire them directly through the website. Upwork receives the payment for the project and holds it in escrow until the work has been done to the client’s satisfaction.
One of the digital jobs that is growing fastest is that of social network administrators. In the United States, those jobs have multiplied since the fake news scandals that shook the 2016 U.S. elections. According to The Economist, Google already has over 10,000 people monitoring and rating videos, including those of its subsidiary, YouTube. Facebook has recently announced that it would be increasing its army of content auditors from 4,500 to 7,500. Until recently, only China, Cuba, and a few other dictatorships used thousands of censors to scan the Internet and remove political criticism. But now, with the scandals surrounding the Russian fake news farms that tried to influence the U.S. election, Western democracies need growing numbers of content moderators and digital police. In Germany, a new law imposes fines on social networks that don’t delete Holocaust denial posts within twenty-four hours. And new technologies that allow digital pirates to produce fake videos—like the one that purportedly showed former president Obama saying things that he had never said—will create an ever-growing need for human filters to prevent the spread of fake messages, record
ings, and videos.
But many of these digital jobs are far from the panacea they were once believed to be. In addition to not paying all that well, they are often more stressful than the old jobs in factories and offices. Sarah Roberts, a professor of information studies at UCLA, has conducted studies showing that many social media content moderators suffer from physical and mental exhaustion from spending too much time reviewing toxic posts. The new digital proletariat is not having an easy time.
YOUNG PEOPLE ARE GOING TO HAVE TO INVENT THEIR OWN JOBS
“My generation had it easy,” New York Times columnist Thomas Friedman wrote in 2013. “We got to ‘find’ a job. But, more than ever, our kids will have to ‘invent’ a job….Sure, the lucky ones will find their first job, but, given the pace of change today, even they will have to reinvent, re-engineer and re-imagine that job much more often than their parents if they want to advance in it.”
The trend that Friedman was talking about has become a reality. Estimates cited by the World Economic Forum indicate that between 75 and 80 percent of the labor market in industrialized countries will be made up of independent or temporary workers by 2030. In this new market of independent workers and subcontractors, the knowledge that you acquired in school won’t matter as much as it did in the past, because most of the things you learned in school will be obsolete by the time you graduate, and anyone can now look up anything with a Google search. Instead, what will determine your success will be your self-motivation and your soft skills, such as creativity and the ability to solve problems. The “Uberization” of the economy—the fact that an increasing number of people will become independent contractors—will force many of us to think and work as small-business entrepreneurs. Our work will be our company.
The Robots Are Coming! Page 33