Business & Economics: March 2018 Archives
I'm a staunch capitalist, but I do worry about technological unemployment.
The automation trend clearly makes workers uneasy, but hard facts are unavailable because technological unemployment is not identified and highlighted in economic reports as it should be. This lapse lulls some into disbelief about dire predictions because, after all, unemployment levels are relatively low, (though so is labor force participation), and job creation growth appears respectable. But a glimpse into what's underway was contained in a 2014 study by the U.S. Bureau of Labor Statistics which measured hours of work (whether by self-employed, part-time or full-time workers) and not jobs over a 15-year period from 1998 to 2013.During that time, economic output in the United States increased by 42 percent (or $3.5 trillion after inflation adjustments). But the number of hours worked remained exactly the same, at 194 billion hours in total. This is technological unemployment: Zero growth in the number of hours needed to create wealth despite a population increase of 40 million people. The study, not replicated since, proves that work itself is shrinking.
"Male jobs" like driving trucks and stocking warehouses are being hit hardest now, but as robots get more capable they will displace traditionally "female" jobs as well.
Maybe it will all work out like after the industrial revolution: workers displaced by machines moved from farms to cities and found new jobs. But... what if it really is different this time? It's hard for any one person to do much about the trends, but you can take some action to protect yourself and your family.
- Take urgent action to get a job that is less likely to be automated. Stay employed.
- Invest in the stock market. Equities will rise because companies will own the robots.
- Save your money. It will be worth a lot more when robots make everything and there aren't any jobs.
Expect to see major changes over the next decade as the center-of-gravity for tech innovation moves away from Silicon Valley.
"If it weren't for my kids, I'd totally move," said Cyan Banister, a partner at Founders Fund. "This could be a really powerful ecosystem."These investors aren't alone. In recent months, a growing number of tech leaders have been flirting with the idea of leaving Silicon Valley. Some cite the exorbitant cost of living in San Francisco and its suburbs, where even a million-dollar salary can feel middle class. Others complain about local criticism of the tech industry and a left-wing echo chamber that stifles opposing views. And yet others feel that better innovation is happening elsewhere.
"I'm a little over San Francisco," said Patrick McKenna, the founder of High Ridge Venture Partners who was also on the bus tour. "It's so expensive, it's so congested, and frankly, you also see opportunities in other places."
Mr. McKenna, who owns a house in Miami in addition to his home in San Francisco, told me that his travels outside the Bay Area had opened his eyes to a world beyond the tech bubble.
"Every single person in San Francisco is talking about the same things, whether it's 'I hate Trump' or 'I'm going to do blockchain and Bitcoin,'" he said. "It's the worst part of the social network."
This shift will be a benefit to almost everyone: tech shareholders, tech workers, and tech users. The biggest loser will be the state of California.
