Tag Archives: robots

Academic Job Looks Promising

The recent article, “Tech Leaps, Job Losses and Rising Inequality” on the New York Times by Eduardo Porter talks about how growing technology is contributing to widening of income inequality in the U.S. As implementing cheaper technologies to industries, low skilled workers are replaced by these new machines. The article points out how certain medical conditions are tried to be diagnosed by technology. One example given is how researchers at Microsoft Research are developing a system that can predict with accuracy a probability of a pregnant woman’s suffering postpartum depression by looking at her tweets on Twitter. Science has made almost impossible things possible in the last century. If technology gets developed at the same rate as it has been for last decades, we could see today’s impossible ideas to come in our hands.

So, if technology is going to grow as it has been and if new technologies are going to replace workers whose job can be done by the new machines, what human beings are left to do?

The answer is simply that those jobs which are hard for robots to perform will be the jobs that humans will be competing for. The main function of these jobs include interpersonal communication, in which today’s technology hasn’t been developed to the extent to compete with humans. The jobs that require this characteristics include teachers and professors, variety of advising jobs, and motivational speakers!  Because, as of today, the technology hasn’t reached to the point where we can substitute another human with a machine to communicate our feelings. Even though we are experiencing growth of online schools and free Massive Online Open Courses (MOOC) offered by such as edX, Coursera and Khan Academy, human to human communication which these online education technologies lack is why teachers and professors will not have to worry about their jobs as for now. Even though we can get same amount and quality of education by taking online classes or MOOC, these courses can’t offer a type of relationship we can have with our professors in college. Professors not only teach the content of the course, but they motivate students to achieve more (Remember, most of us are going to make at least $2 million in our life time according to Professor Kimball). In other words, robots haven’t been programmed to motivate us emotionally.

Another reason that demand for academic jobs will be greater in the future is that as technology replaces jobs that require low skills or skills that can be programmed in a machine, people will be looking for to get skills that machines cannot possess. Most of these skills require higher education as how advising job requires to deep knowledge about the topic from the adviser. Therefore, demand for higher education will surge in the awakening of greater technology. Presumably so, then teachers and professors will be demanded in higher numbers.

Academic job will be demanded in greater number in the future because of its inherent function of interpersonal communication and demand for higher education.

[Revised] Who’s afraid of Isaac Asimov? And should we even be?

Wrote the book based on that robot movie with Will Smith. Or was that the other way around? – Isaac Asimov (image credit)

Evan Soltas had an interesting post about labor market tightness a couple of weeks ago. His main point is that, looking at the quits rate, you might think that labor markets are pretty tight right now. That might be a sign that, overall, there’s not a lot of unused economic capacity, or at least, not a lot of unused capacity that matters (more on that below). If you think that’s the case, you’d reach very different policy conclusions when it comes to monetary tightening than someone who thinks there’s still plenty of slack in the economy.

Quite a few people have given their 2 cents already. John Aziz makes a point about the potential benefits of overshooting: it might create jobs for some of the long-term unemployed.

Evan may have a good reason for disregarding the long-term unemployed. John’s proposal might be all we need. But if neither of the two is completely right, we may be in trouble.

Why does Evan think that the long-term unemployed don’t matter? He says that if they don’t compete with more active members of the labor force, they can’t hold back wage growth or interfere with employer/employee matching (because they won’t keep people from quitting a job they don’t like for one they enjoy). Which is a valid point.

But in the medium to long run, a drop in lower labor force participation seems like somewhat of an issue. And participation is down:

It seems to me that there are three possible reasons for this, and three scenarios how this could play out:

  1. The decrease in labor force participation is transitory. In that case Evan’s assessment is correct, although you could still argue that the possibility to overshoot is a risk worth taking, given its potential benefits.
  2. The decrease is more or less permanent, due to labor market hysteresis. In that case, overshooting alone might do the trick.
  3. The decrease is more or less permanent, and it’s a (labor!) demand trend. In that case, we might have a real issue on our hands.

1) Will it all be over soon?

Evan seems pretty convinced that the long-term unemployed “really can’t matter much in a macroeconomic sense”. I think that statement makes sense only if you assume that, in the long run, labor force participation will return to its pre-crisis level. Else, I would like to see an argument as to why we should ignore the fact that 3% of the total US labor force decided to take some time off. Changes of that magnitude are the ones that tend to matter little now, but a lot if they turn out to be persistent over several years’ time.

2) The UI forever (well, kinda…)

Just so we’re clear: economists have a somewhat peculiar interpretation of the word permanent. When I say that the drop in labor force participation might be permanent, I don’t really mean forever. I mean, “for around ten years or so”. Which is substantially longer than recovering from the recent crisis will take (hopefully, anyway), and thus covers a much longer time span than scenario one. So why might participation be depressed for a whole decade?

There are a few stories you could tell that might lead to scenario two. Maybe people lost a lot of human capital while they were unemployed, and have genuine trouble finding a job. Or maybe, employers regard long-term unemployment as a signal. Long-term unemployment might indicate that you’re not the kind of person people would want to employ. Granted, it might also mean you were just unlucky and got laid off at a time when it was really hard to find a new job. But so long as employers have plenty of ‘good’ applicants to choose from – people who aren’t sending out the long-term unemployment signal – they might be okay with rejecting you anyway.

I’m not sure how likely this scenario is, but if this is the one we’re in, definitely overshoot! Temporarily overheating the economy may raise inflation a little, but it would also mean more job openings and fewer people applying. Making job applicants scarce would provide an incentive for employers to take a closer look at the long-term unemployed, and to figure out whether what happened to them was just bad luck – or whether they’re actually bad apples.

3) Rise of the Robot Lords

What if the long run equilibrium level of employment is actually decreasing over time? Take a look at the bigger picture:

For a while now, there has been stagnation and quite a substantial drop in labor force participation, even before the dot-com bubble. If employers desperately needed these people, wouldn’t you expect them to raise wages and try to lure some of them back into the game?

I know this sounds a little like a sci-fi cliché, but if falling demand for labor due to increased mechanization were responsible for discouraging workers from even trying to find a job, overshooting will at best give a temporary boost to labor force participation. After that, we’re back to the downward trend.

The remedies for this kind of situation are very different from what we need to do in the other two cases. Increasing the general level of education would be a good idea (it generally is, but especially in this case).

Rethinking the social safety net would be another (this is probably worthy of a post of its own, but let me give you my intuition). Many of the labor-intensive industries of today might rethink their business model once robots become more cost-effective. What happens if mechanization puts us into a position where the vast majority of workers in classic manufacturing jobs (cars, steel) – and possibly also a fair few in the service sector (eventually, burger-flipping robots will be the norm) – are no longer needed? And when, at the same time, the new ’employees’ – machines – won’t ever ask for pensions, or unemployment benefits? Well, it seems to me that indefinite unemployment insurance, or a guaranteed basic income, might not be so Utopian in this scenario.

Faced with this kind of affluence, society might well decide that the dangers of ‘paying people to be unemployed‘ are far outweighed by the benefits of getting much closer to what John Rawls would call a well-ordered society. And, especially in a highly educated society, I think we have reason to believe that people actually want to work, instead of being on the dole. As Jeffrey Smith nicely said (referring to Arno Duebel, a German who had been living off unemployment benefits for 36 years straight):

The actual mystery, though, is not the existence of someone like Arno, but rather, given the relative generosity of many European welfare states, their relative scarcity.

By the way, labor force participation isn’t just down for low-skill workers; this may be an issue that affects us all, even those with a college education (albeit to a lesser degree):

image

Like I said, this deserves a post of its own.

Humans good, robots bad?

I think that the third scenario is the one we want to be in. Any kind of job that a robot (or machine in general) can do better then a human – why not let it do it?

But it’s also the most difficult one to come to terms with, politically and ideologically. The left would need to give up part of its struggle for the ‘working class’, at least in the classical meaning of the word – factory workers, hard manual labor, that kind of thing. The right, on the other hand, might need to concede that in this kind of environment, maybe having a basic income won’t annihilate the US economy.

Issues like these would have to be dealt with during the next few years and decades. Or, who knows, maybe we are in scenario one, and Evan is right, or two, and John is right. But if not – and there are good reasons to believe this – we might want to start thinking about the implications.

Are we entering the age of the robot?

Technology has been improving drastically for many years now. Have we actually now reached the time when robots will take over many jobs from Americans and people around the world? It seems that we may be heading in that direction fairly soon. With the latest jobs report came an interesting puzzle of weak hiring, but solid growth. Obviously growth is a good thing. The question is, how are we having this period of solid growth without respectable hiring to go along with it? The answer may lie within the advancement of and investment in robotics.

DemeTech Corp., a Miami maker of surgical sutures and blades, is posting higher revenue but trimming payrolls. The firm is investing in technology that automates many functions, Chief Executive Luis Arguello said.

In the next two years, the firm will make as many of its products with machines “as robotics will allow,” Mr. Arguello said. After cutting 20 jobs over the past year, the company now has about 75 workers.

This is just one case of a firm moving towards robotics and better technology and away from some of the manual labor that they previously used to construct their products. And one would have to believe that if a company is able to manufacture the same product while employing and paying less people, they really don’t have any reason not to do this. Of course you need to invest in the technology and robotics, which costs money, but this can save money in the long run and in many cases the product can be produced more efficiently and effectively. Looking at the big picture, the fact that many firms have been able to enhance production at a higher rate than employment may certainly be supporting the growth of GDP regardless of a lower level of employment.

Some folks, like Lynn Stuart Parramore, do not believe that there will be a so-called ‘jobocalypse’ caused by the advancement of technology.

“If job decreases were really caused by waves of automation, the unemployment rate should have ticked up during the 1990s, when you probably started the decade with a typewriter and finished it with a laptop,” Parramore writes in her online article “Don’t buy the hype of a robot-driven ‘jobocalypse.’”

However, I don’t really buy into her argument. With some things, the past can tell you a lot about the future, but I am not so sure that applies in this scenario. According to Derek Thompson of The Atlantic, almost half of the jobs in this country could be replaced by robots within the next ten or twenty years. And while most of these are routine jobs, this is a frightening thought for many people because even if this revolution helps out the economy as a whole, the benefits will not be shared by everyone. In fact, it appears that half of the country will be sh*t out of luck if this hypothesis indeed comes to fruition. Furthermore, Bill Gates suggests that a rise of the minimum wage would also increase the likelihood that more low-end jobs would be replaced by robots as well. 

All of this taken into consideration, it seems that we are already headed into the direction of an increased robot takeover of at least some of the jobs in America. The current condition of our economy leads me to believe that more and more business owners and decision makers would like to pay as few people as possible while still being able to make their product and conduct growth. And certainly other policies that come into play over the next few months or years can have a large impact on this scenario as well. Taking this into account, I believe this should most definitely be considered an important piece to the debate over the minimum wage. While a small increase in the minimum wage would not cause some immediate disaster in terms of a robot ‘jobocalypse’, a big push could have some unintended repercussions.