Someone Has to Write the Writing on the Wall: How Technology Adaption Shapes Job Creation & Destruction
Unit 1: AI; Topic 4: Technology Adoption
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Job Creation & Destruction: How 1:1 Thinking Is Flawed
The advent of technology alone does not create job displacement, the manner in which that technology is adapted does.
It is worth noting that many manufacturing, working-class jobs have been automated decades ago or off-shored…often a combination of both. Ask any industry boom town of the midcentury, like Detroit, which has seen its lifeblood enterprises quietly migrate overseas with devastating effects on local job markets.
As our generation frets the threat of automation in the workplace, the office sector is feeling the heat, a middle-management squeeze that has not felt the past technology revolutions as acutely.
Threats aside, the effects on a single job or role are not exactly one-to-one. You don’t arrive at work one day and find a robot sitting in your chair sipping a matcha latte, while you are left to schlep your belongings away into a discarded filing box.
The ripples of technology adaption can look more subtle; siphoning many jobs into one, automating systems so the teams are “lighter” and shrinking headcount.
Take Uber Eats, the company recently announced a partnership with Serve Robotics consisting of a delivery fleet of 2,000 robots. While they will not send a pink slip to their entire on-demand workforce, Uber will inevitably push their human delivery out if the tech logistics company lands the program’s execution.
As AI innovations are integrated into the workplace, employers are empowered to “quiet fire” their workforce, which can look like bolstering vacant positions with technology and expecting employees to fill in the gaps or implement new software. A third of managers admitted they’ve actually quiet-fired an employee leveraging tactics such as reduced workload, or no promotions or raises.
Optimists are also quick to offer that the technology wave strikes roughly once a generation, and usually results in the decimation of some industries and a corresponding birth of others.
There is legitimacy to this research, with the Internet for example creating 2.4 jobs for every job that it has destroyed. However, the newly minted jobs require a distinct set of skills from the industry it has sidelined.
Placing the same workers from one role to another within an industry requires education and retraining. Should neither exist, often this workforce is left behind or fixed at a certain level of income without the chance to adapt to technological advancement.
Think of the travel industry, which has been disrupted by online travel agencies. Expedia is recruiting from tech, not training up the agents of yore. Like all of life, there is a duality.
As it relates to the current technological revolution, AI’s existence doesn’t singularly spell doom for a workforce. The tech must be integrated into current systems, a process that takes much longer in Goliath corporations. AI’s role is still being shaped, primarily in boardrooms until lawmakers pull up a seat.
With 2018 estimates putting 50% of the workforce at risk of being automated, and ChatGPT reaching 173 million active users in April 2023, it’s clear that we need to be considering how we weave this change into the workforce — like yesterday.
Tech companies are announcing layoffs that amount to a small municipality (sitting at close to 150,000 as of May 2023) making obsolesce top of mind. So…where does that leave things?
The Changing Nature of Work & Security
As the office jockeys face a similar fate of industrial workers at the hands of automation, it might be a time to pause to reflect on how our systems have been broken for more vulnerable workforces.
The shape that this adaption will take is currently at the discretion of the top industry leaders and congressional fogies, AKA those pulling the strings that make up our social service net and the fabric of corporate responsibility.
The dissolution of union labor forces and social support, coupled with the aforementioned wage dwindling respective to inflation (refresh about productivity index vs median wages here), has been a reality for some working classes long before VCs started tweeting about OpenAI.
The way we work shape-shifts from generation to generation. If you’ve ever had a grandparent dispense career advice, this is evident. Their knowledge served them for a distinctly unrelated workforce, one that no longer exists.
Modern jobs inherently disincentivize loyalty, are less secure, and lack some of the “corporate net” (e.g. declining pensions) our predecessors took comfort in.
This shift from employer to employee responsibility, in terms of retirement and healthcare, is a trajectory of our current workforce that puts agency (read: risk) back into the employees.
Today, employment alone is not a panacea from financial volatility, exemplified by the rise of “side hustles”, multiple streams of employment, the steepness of Engel’s Pause, and the dissolution of the “corporate net”, which refers to benefits inherent with employment.
The gig economy has trickled up into the white-collar career sectors attempting to claw back any semblance of financial security, with many venturing into side hustles, consultation roles or entrepreneurship.
While gig employment has a mainstream allure, from dual-income families that struggle with childcare costs to young professionals who value agency over stability, it opens up a deep vulnerability.
This shift to casual work models folds seamlessly into the core narrative of the American entrepreneur but ultimately services corporate interests who have to offer less to their task force.
With gig work, there is no safe hold, no guardrail ensuring employee protections, like healthcare and savings plans, that come with traditional employment of the past.
And because Gen Z values freedom and individual expression, there has been little pushback from the shift to more casual work that lacks benefits like 401K, health insurance, and upward mobility.
The absence of such benefits are less salient in the infancy of one’s career.
Apathy toward traditional career trajectories, as well as the culture of side hustle, is creating an environment where not only are we lacking in a social net, but in a career net.
A threat felt silently on the individual level but has compounding severity for the collective economic and social well-being.
Layering AI into Our Current State of Affairs
As these technologies quicken their way to the mainstream and career prospects become increasingly unstable, we must not see the shape of adaption as prophecy.
As a collective, we need to shrug off the cloak of capitalist realism that tells us companies are responsible to shareholders (not employees) and public services are frivolities that will fast-track us to oppressive communist rule.
We must to question the types of jobs and benefits that will be offered by the new industries that crop up from AI - who ultimately is gaining here?
The “ooh, shiny!” of new tech needs to be followed with a morose dose of reality. We can turn to social media’s perverse effects; the impacted attention spans, high anxiety and depression among young people were a mere extrapolation of their early drawbacks.
Social media platforms’ monopolies have just been largely unchecked by lawmakers until recent years (we’re looking at you, Mr. Zuckerberg).
Technology moves at a speed faster than policy, faster than Engel’s Pause, and surely faster than wage increases.
We cannot make the same fatal flaw of inaction with AI technologies that have the ability to obsolete millions from the workforce and hardcode human biases.
Humans are wired to respond to social learning. In the West, we are taught that profit precedes people. That is the instinct of the rational consumer and to condemn this type of profit maximization is a moot point.
Self-policing individuals is a fantasy that derails the public interest from true accountability at the hands of lawmakers & corporations.
And without proper consideration, for things like data biases, or social netting for employees with the growth of automation either by public or corporate entities, things could get ugly - fast.
In our next topic, we’ll read the tea leaves of the American Dream’s precarious state. It’s not all doom & gloom, we will postulate systems of public accountability around technology innovations & visualize what AI harnessed for a collective good might look like.
Discussion Questions:
How has credit card debt & mortgages played a factor in your jobs?
Have you ever worked a side hustle? If so, what?
Are you in a worse, better, or the same financial situation as previous generations in your family?
Glossary:
Quiet Firing: Quiet firing refers to a manager's strategy to push an employee out of their role by changing their workload, job responsibilities, or working conditions. This is often used instead of outright firing an employee.
Gig Work: Gig work refers to casual employment, where individuals work as independent contractors instead of full-time employees. This type of work is often project-based and lacks the traditional benefits of full-time employment, such as health insurance and retirement plans.
Capitalist Realism: Capitalist realism is a belief system that accepts capitalism as the only viable economic system. It holds that there is no alternative to capitalism and that the market should dictate all aspects of life.
Rational Consumer: The rational consumer is a theoretical construct used in economics to describe an individual who makes decisions based on rational calculations of the costs and benefits of their choices.
Data Biases: Data biases refer to systematic errors in data collection or analysis that can lead to incorrect or misleading conclusions.
Engel's Pause: Engel's Pause is a phenomenon in which wages stagnate despite increases in per-capita gross domestic product.
Sources:
A Study Finds Nearly Half of Jobs Are Vulnerable to Automation by The Data Team
Internet Creates 2.4 Jobs for Every Job It Destroys: McKinsey
Serve Robotics Rolls Out Robotic Delivery for Uber Eats
The Crunchbase Tech Layoffs Tracker
Today’s Real Story: The Facebook Monopoly by Daniel Liss
What Is Quiet Firing? by Robin Madell
97+ ChatGPT Statistics & User Numbers in May 2023 by Nerdynav
So you bring up several thought provoking subjects. First, why did Detroit get decimated? Why do jobs leave the US (not limiting the discussion to the US but this conversation originates here). Where do the jobs go? Who is doing theses jobs? What roll does or should the government play? How do we prepare avoid socioeconomic meltdown?
The smart ones seem to survive. Either by side gigs or protecting themselves with irreplaceable talent. In the US I believe we are doing a poor job of preparing our youth. Many presidents tried to promote education. Bush, no child left behind. Obama, Every Student Succeeds Act. Both of these failed. They simply moved the bar so teachers taught to a standardized test. Or they moved the bar so low that no child is challenged. Combine this with Colleges and Universities creating entrance requirements based on many factors other than aptitude, combine this with many companies like United Airlines hiring based on diversity rather than talent. Creates a set up for failure, a glass ledge.
It is not an easy problem to fix, proven by the continued problem.
What role should government play? This unfortunately comes down to political affiliation. The sad part here is how polarized politics has become (thanks social media). Where are the days where people could speak and debate freely? Where are the days where we could voice our opinion and listen to others with an open mind, vulnerable enough to be persuaded? It seems we now draw a line and are all in on one side or the other. I never met any one person who had all the answers and I am sure no one political part has all the answers.
Government needs to play a part. Needs to prepare our children, needs to create job training, needs to incentivize workers to work, needs to provide a safety net for those who can’t work, needs to incentivize companies to keep jobs in the US, needs to tax companies to continue the US leadership around the world. Or, maybe not. Every empire has come to an end.
AI needs to embraced. Hopefully it can be used to help teach our youth to be the best that they can individually become.