Automation is getting worse for workers, and the emotional strain is already evident.
I’ve noticed something. When I take a Lyft (I never take Uber, although I imagine the same is true for them), I’m rarely in the car more than a minute before the driver subtly makes it known that he/she has a real job (ie, white collar – today it was a real estate guy) and just does the rideshare thing on the side.
It doesn’t happen 100% of the time, but it probably does happen 90% of the time.
This is obviously a bit sad. There shouldn’t be shame in honest work, but it’s evident a lot of people feel this type of job is beneath them. I have to be honest – I get it. You work hard, you bust ass becoming a pro in your chosen field, maybe you even get quite good in your career, and then, for one reason or another, you simply need more money.
Any number of reasons why. Perhaps you lost your job through no fault of your own and haven’t been able to find another one. Maybe economic, social or technical changes have ravaged your profession, leaving you well qualified for something that doesn’t exist anymore. Some people are certainly behind the 8-ball because they lived beyond their means and the tab has now come due. And if you, like me, live in one of the country’s pricier markets, driving for Lyft may be a way of easing the general squeeze a lot of people feel.
Whatever, I get it. At this stage of my life, it would be very hard on my pride to have to take on work doing something less than what I’m qualified for.
There’s a deeper issue, though: we seem to live in a world that squeezes tighter every day. The Dow may be roaring, but that prosperity is something most people only hear about. Is it really booming if nobody can feel it?
Neel Kashkari, president of the Federal Reserve Bank of Minneapolis (one of the 12 regional Federal Reserve banks), believes the culprit lies within the unemployment calculation itself.
“The headline U.S. unemployment rate captures only those who are actively looking for work. For example, it ignores people who are out of the labor force because they have given up looking for a job,” he wrote in an op-ed for the Financial Times on Wednesday.
According to recent months’ statistics from the Labor Department, the “marginally attached” group, defined as people who had not looked for jobs in the four weeks before the Labor Department’s monthly job survey, has been slowly rising.
“Backward-looking statistics show nearly a third of these marginally attached Americans are now aged over 55,” Andrew Hunter, co-founder of job search engine Adzuna, told Observer.
That means a lot of people have simply stopped looking for jobs.
A more reliable measure of workforce robustness, Kashkari suggested, is the employment-to-population ratio of prime age workers (aged 25 to 54).
“By focusing on prime-age adults, this measure of how many people are actually working helps adjust for demographic trends such as aging,” he added.
This ratio, as of today, is 79.2 percent, down from 80 percent in 2007. The difference represents one million people.
“That drop suggests that approximately one million additional prime-age Americans would be available to work if the U.S. labor market recovered to its pre-recession strength,” Kashkari wrote.
And there’s that word: “wages.”
If I was making $X working in my chosen field, but now I’m working in another job making $½X because I got laid off, I’m contributing to that healthy unemployment figure. But I may also be driving for Lyft or bartending at night or killing myself working an extra 20 hours a week freelancing.
And it’s only going to get worse as automation displaces more and more workers.
A 2017 McKinsey report estimated that “between 400 million and 800 million individuals could be displaced by automation and need to find new jobs by 2030 around the world…”
Despite what President Donald says, China isn’t the problem.
The U.S. has lost 5 million factory jobs since 2000. And trade has indeed claimed production jobs – in particular when China joined the World Trade Organization in 2001. Nevertheless, there was no downturn in U.S. manufacturing output. As a matter of fact, U.S. production has been growing over the last decades. From 2006 to 2013, “manufacturing grew by 17.6%, or at roughly 2.2% per year,” according to a report from Ball State University. The study reports as well that trade accounted for 13% of the lost U.S. factory jobs, but 88% of the jobs were taken by robots and other factors at home. [emphasis added]
It isn’t just blue collar types who need to be concerned, either. A recent study from researchers at Oxford predicts nearly half of today’s jobs could be automated in the next two decades, including a huge number of white collar jobs. Fields already being affected include financial and sports reporters, online marketers, anesthesiologists, surgeons, diagnosticians, financial analysts and advisors, e-discovery lawyers, law firm associates and paralegals, customer service, training, and other routine office services.
The more I read, the more I wonder if anything will be safe from the machines in 50 years.
So what does this have to do with Lyft drivers being ashamed?
Many experts are justifiably nervous about what happens when all the jobs are lost to automation. Millions and millions of unemployed people, severe economic hardships and a clear target for their anger – it isn’t hard to imagine these conditions leading to civil unrest. Or worse.
- The cost savings associated with automation guarantee wages are likely to remain stagnant (or begin decreasing).
- Income gaps are likely to widen. Automation lowers costs and drives profit to ownership, so the wealthy will see their share of the economic pie grow significantly as workers fight harder for less and less.
- It’s hard to imagine a scenario where anger on the part of those most affected doesn’t grow, and as noted above, automation is already intruding on the well-being of white collar workers. This means the lines between haves and have-not will shift and the ranks of those on the outside looking in will swell – specifically, these ranks will accumulate greater numbers of sophisticated, educated types, totally disrupting traditional management vs labor dynamics.
- Populist voter backlash threatens the wealthy and corporations…?
What happens from here is anybody’s guess. Political moves to put the brakes on economic progress (a la the Luddite movement) seem unrealistic, given the nature of the global political economy, and many argue raising taxes on the rich will be constrained by the mobility of capital and highly skilled labor.
We do know we’ve seen something like this before, and last time it got ugly (p185).
In other words:
- The economy is tightening, despite what we’re told.
- The crunch squeezes people in ways that force them to seek extra income.
- Often they see this work as beneath them.
- It’s going to get worse.
- The number of people affected is going to increase dramatically.
- A society without work and income for huge swaths of its citizens is unsustainable.
- Finally, our government seems to have no plan (beyond blaming China for something they didn’t do, promising to “bring back” coal and manufacturing jobs and starting potentially disastrous trade wars) for the “post-work” society.
The good news is those feeling the pinch have those Lyft jobs to fall back on.
Until they’re automated out of existence by self-driving technology, anyway.