Back in Bleak: Nearly Half of U.S. Jobs Are Likely to Vanish in 20 Years. Then What?

By Glen Martin

Ever get that feeling that you’re slowly sinking into a financial morass, a fiscal tar pit from which you’ll never emerge, no matter how or what you try? That the odds are so grim that your children and their children will end up in even worse shape than you? That the middle class is indeed moribund if not dead, that the rich are getting richer and the poor (including you) are getting poorer, and that the trend will only accelerate until you’re eking by on the dole—if there were a dole, that is. This isn’t the United Kingdom, after all.

Well, if it’s any consolation—you’re probably right!  The rich, certainly, are getting richer (and you’re not. But you knew that.) A hot-off-the-presses Oxfam report concludes that a mere 62 people have the same wealth as the poorest half of the world’s population. That’s down from a megarich cohort of 388 people five years ago. (Presumably the folks who fell off the megarich list are still superrich or at least ultrarich.)

Regressive fiscal policies, corruption and simple venality have something to do with the trend, of course. But it’s not that simple. The increasing concentration of wealth and a concomitant and intractable high unemployment rate increasingly seem like deep secular trends, basic shifts in the way money flows across the nation and the world. And more than anything else, it’s driven by advancing technologies and global trade, the same technologies that give us our smart phones, big screen TVs and cool apps, and the same global trade that replaces well-paying jobs with robots, algorithms and cheap labor from impoverished equatorial countries.

Increasing, the trend is being quantified, and the numbers are beyond alarming. A recent article in the MIT Technology Review noted that the U.S. is the most unequal country in the developed world, with the richest one percent accounting for 34 percent of the nation’s wealth, while the top 0.1 percent has fully 15 percent of the goodies. Further, it’s only going to get harder for the rest of us to rustle up sufficient work to pay the rent on our hovels and buy our gruel. An Oxford study concludes that 45 percent of American jobs could disappear over the next 20 years due to computerization.

In other words, while it seems certain that smart phones will keep getting smarter, it’s entirely likely your job is doomed.

Economist and former Harvard president Larry Summers addressed this issue in 2012 at UC Berkeley’s Goldman School of Public Policy, in a forum called “Economic Possibilities for Our Children.” Now, four years later, it’s eerie how prescient Summers seems. Much of his talk focused on what he termed “Doers” (as in, a technology that does stuff.)

“Let’s say we have this new technology, and it can drive a car, produce a widget, give a massage, design and construct a house,” says Summers. “An economy with Doers would be immensely wealthy, with high quality products and fantastic services. There would be immense rewards for those who could design better Doers, for those who could think of better things Doers could do that no one had thought to ask a Doer to do before.”

On the other hand, continues Summers, there would be little value associated with work that “wasn’t associated with a dramatic change in something that a Doer did.” And that, Summers implies, is across the board: It not only applies to the guy spot-welding gizmos on an assembly line, or driving a truck (think autonomous vehicles). As algorithms evolve, it also has implications (none of them good) for educators, lawyers, physicians, urban planners—even economists.

“The return for work for those not designing new tasks for Doers—but simply carrying out tasks that can be carried out by software—has not increased or is declining,” Summers says.

But there’s a consolation of sorts, Summers allows: “In aggregate, we are becoming wealthy in ways unimaginable 50 years ago.” By that he means we have far better products, and in inflation adjusted terms, they’re cheaper than ever. You may be broke, but you can still afford a burner smart phone with which to text your mom about your misery.

“Economic Possibilities for Our Children” sounds very 2016, of course, and it raises the question: What the hell is being done about it? By any reckoning The Singularity is still decades away. Until we’re all subsumed by a super-intelligent and autonomous AI, each of us will have to do something, and get paid for doing it.

It’s a problem that could well prove intractable, but some good minds are pondering it. Business schools, of course, aren’t normally in the business of promoting progressive social policies. They’re more about fostering entrepreneurship, serving as liaisons between bright grad students and venture capitalists, and so on. But Berkeley’s Haas School of Business, says business ethicist Robert Strand, isn’t focused quite so narrowly.

Income disparity and technology-triggered job losses are “non-conventional discussions to have within a business school,” says Strand, the executive director of Haas’s Center for Responsible Business. “But Berkeley-Haas is, and I am very proud of this, a nonconventional business school. We aspire to question the status quo of mainstream business. We are deeply committed to teeing up conversations and debates about income disparity, the economic dislocations of workers, impacts of the so-called ‘gig economy,’ and associated contentious discussions.”

Strand acknowledges that “none of us have the answer” at this point about massive job loss due to rapidly evolving technologies, but emphasizes the issue must be paramount, particularly in academe.

“The notion of progress is a funny thing,” Strand says. “We cannot really talk about it without talking about progress for whom. But as soon as we attempt to explore progress for whom, we can quickly get gummed up in debates.”

Adam Smith, Strand observes, famously noted that one person executing all the procedures necessary for making pins could scarcely produce one pin a day. But with technical advances including the division of labor and mechanized production, today’s society can enjoy a surfeit of pins produced at near zero cost. Few people, Strand says, would want to return to the days of hand-wrought, scarce and expensive pins, “but undoubtedly lives were changed for those involved in the process of producing pins. So the question at hand is how can we most benefit from these incredible technological advances while cushioning the direct and immediate blow to those who are displaced as a result?”

“Business schools have historically done a terrible job of this, as we have focused almost myopically on arming students with tools without encouraging their critical reflection for when to apply them.”

Strand says a salutary move would be to “create a space for reflection about this and other important questions related to the role of ever changing business in society. I would contend that business schools have historically done a terrible job of this, as we have focused almost myopically on arming students with tools without encouraging their critical reflection for when to apply them. (Sociologist) Max Weber warned that our collective obsession for ever-increasing efficiency trumps a shared consideration toward humanistic values. We should heed this warning.”

And as for Job Death affecting the professions as well as the working classes? Strand says white-collar elites are “not immune to disruption, but quite frankly, I don’t spend a great deal of time worrying about how those of us who have had the good fortune to pursue M.D.s or J.D.s or Ph.D.s will put food on the table. Things will change for us, but most of us will probably be fine. I do worry a lot about the many people with limited options and limited agency to adapt.”

But Strand intimates there’s no need for total despair just yet. Some countries are responding to the trend aggressively, and with some success. Perhaps it should come as no surprise that they’re mostly in Scandinavia.

“(Social epidemiologist) Richard Wilkinson remarked that ‘If Americans want to live the American Dream, they should move to Denmark,’ ” Strand says. “He based this assertion on the overwhelming evidence demonstrating that greater wealth inequities in societies impede the ability of individuals to control their own destinies. Social mobility in Denmark is much higher than in the U.S.”

Strand isn’t just taking Wilkinson’s word for it. He spent most of the past decade studying Scandinavian government responses to income inequality and related issues. Contrary to the view of many starry-eyed progressives, he says, Scandinavia is not utopia.

“But in my view, those who immediately disregard the successes of Scandinavia are even more wrong,” he says. “Scandinavian societies have painstakingly built the institutions necessary to support the vision that many people should have opportunities. In Scandinavia, when the economy shifts, people are not pushed into the streets. They do not lose their health benefits and homes.”

These essential securities, says Strand, “engender a very flexible labor force and encourage people to take calculated risks. The Scandinavian business community is very much a key component of these successes and actively engages with Scandinavian governments to develop smart employment practices. This allegiance to the concept of ‘survival of the best nurtured’ seems to trump our American love affair with competition and a ‘survival of the fittest’ mentality.”

Could America, then, replicate Scandinavia? Short answer: No. We are, after all, Americans, and that implies—well, many things. And one of them is we aren’t going to be Scandinavians. Ever. But we could certainly look at Scandinavia, says Strand, and ask, “What might we learn from it? That would be a great start.”

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“Then What?,” that is the question. Even more “Bleak” is the most inconvenient truth that this is 2016 and absolutely no intellectual institution has the expertise and leadership to have a solution that can be implemented today to produce and perpetuate an acceptable quality for our newest and future generations. Indeed, we have totally failed to learn from the Lessons of History, Now What?
I would submit that more drudge work gets automated, and creative work increases. Creativity occurs everywhere in the spectrum of human endeavor. I would hope that we find an equivalent or better driver of general welfare improvement than inequality.
A problem of paramount concern for the long-term future was reported in “Berkeley in the News” last Thursday in “On Climate Change, Are University Researchers Making a Difference?” We must focus on doing whatever it takes to eliminate this gravest threat to our civilization immediately: While university scientists have “a formidable record of accomplishment in the field of climate-change research,” this author takes a look at what they haven’t achieved — “figuring out how to stop it.” There are a number of considerations, including whether researchers should keep out of politics, and whether they have the right incentives or adequate tools. But there’s also, some say, a problem of “faintheartedness,” and that, says energy professor Daniel Kammen, is a “completely fair criticism.” He notes that as “the mother of all externalities,” climate is perhaps the clearest case in which academics who are concerned about the societal impact of their work should be involved in developing comprehensive problem-solving strategies.

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