Robots, unemployment, and immigrants
Since a few days, Amazon has started Amazon Go. The idea is simple: a shop where you go in, take whatever you want from the shelves, and the cost goes automatically to a magnetic card that you carry. Going out, you swipe the card, which goes to your bank account or to a credit card, and that it is. No queues, no cashiers, fast and easy. The first shop, in Seattle, has a roaring success. Nobody is in charge with restocking the items. An automatic system does that. And soon two robots will replace the items on the shelves, now done by two employees. Even the cleaning of the floor is being done by a robot. The goal is to have a totally automatic shop, where no human can make mistakes, get ill, go on strike, take holidays, or bring into the work personal problems.
The American petrol industry calculates that will reduce within three years the staff required at each well, from 20 to five. Small hotels within three years will have a fully automated reception. You will arrive, swipe your credit card, a key for your room will come out, and you are done. If you need anything, you call a central office, where people will answer your questions and do what all the eliminated receptionists were doing. We are already accustomed to automated telephone for bookings and reservations: and to do ourselves tasks at an airport which were done before by clerks. Immigration officers will be reduced to a small team, which will intervene only if called by the immigration’s machines. Contrary to what we think, self-driving vehicle are coming fast: car makers think they will be on the market by 2021.
In the United States, according to ABI research institute, the number of industrial robots will jump nearly 300 percent, in less than a decade. And the National Economic Research Bureau, found out that for every industrial robot introduced unto the workforce, six jobs are eliminated. After the auto industry, the strongest user is the pharmaceutical sector. Robots can perform toxic operation, without any protection.
The United Nations Conference on Trade and Development (UNCTAD), released a “policy brief”, indicating what would bring this robot revolution, in Asia, Africa, and Latin America. “If robots are considered a form of capital that is a close substitute for low-skilled jobs, then their growing use reduces the share of human labour in production costs. Adverse effects for developing countries may be significant” the report states. In May 2016, the World Bank’s Digital Dividend Report, calculated that the substitution with robots of low-skilled workers, in developing countries, concerned two thirds if the jobs. China is going to be the biggest user of robots. The large reserve of cheap labour, coming from the rural area, is dwindling. China plans to become a high technology world leader. The time of cheap imitations is gone. Now China registers more patents than US. The Apple supplier Foxconn reduced last year its employ strength from 110.000 to 50.000 in Kunshan, as an example, thanks to the introductions of robots.
The economists call this wave of automatization, the Fourth Industrial Revolution. The first started, at the end of the 18th century, with the introduction of machines to do the handicraft work, like in textiles. Its impact become visible In 1811, when the followers of a fictional Ned Ludd started to destroy textile equipment, because it left jobless thousands of individual weavers (who become the workers of the factories). The second industrial revolution was in the middle of the same century, when science was applied to production, creating engines and other inventions, creating the real Industrial Revolution. That meant rural populations migrating to towns, to work in the factories. The Third revolution, in the middle of last century, is considered to be the introduction of the Net, which changed again the forms of production. Gone where the jobs of secretaries in companies, the job of linotypist in newspapers, of accounting, in documentation, libraries, archives and other hundreds of professions made obsolete by the Net.
Labour was considered an important factor of cost in production. And it was how much the workers had rights to the resulting benefits, that sparked the creation of trade unions, the modern left, and the adoption of universal values, like social justice, transparency, participation, basis of the modern international relations. The machine’s relations with the distribution of the benefits of production, has inspired several thinkers, philosophers and economists over the last centuries. It was generally assumed that a time would come, in which machines would eventually do all the production, and humankind would be free of work, maintained by the profits generated by the machines. This, of course, was more a dream than a political theory. Yet today, all managers of Artificial Intelligence and Robot’s production, maintain that the superior productivity of robots will reduce costs, therefore enabling more consummation of good and services, that will generate new jobs, who will easily absorb those displaced by the machines. The data we have do not show that at all. The Economic Report of the President of the US, say that there is an 83% chance that those who earn 20 dollars an hour, could have their job replaced by robots. This proportion goes to 31% for those who make 40 dollars per hour. The new economy is an intelligence economy, based on technical knowledge. You have a future, if you are able to adapt to that kind of society, for which new generations are much more attuned. But what will do a taxi driver, who did not have a technical education, to recycle himself? The statistics show that today, when somebody lose his job at a certain age, if he finds a new one, it will be almost always at an inferior remuneration. So robotisation will affect, above all, the lower middle class, with a new generational divide.
This bring us, to conclude with two political consideration and a concrete proposal, for the sake of thinking positive.
The first consideration is that Trump, and all the other politicians who want to restore a past glorious future, are totally ignoring this debate (unfortunately, it is in no political debate) To restore jobs in mines and fossils, for example ignores that the technological development has already shed many jobs, and will continue to do so. The data of the petrol companies are definitive, So ,to rally disgruntled people, as was the case in Europe with Brexit, is a consequence of the poverty of the political debate, where traditional political parties(especially on the left), instead of explaining clearly the world in which we are, and the one in which we are going, are trying to piggy back the feeling of the victims of the neoliberal globalization, taking often the banners of the nationalists. The coming elections in Italy are a good example. The centre-left party of Matteo Renzi looks to get the least number of votes, because of its confuse identity, which is difficult to distinguish from the other parties.
The second political consideration is that migration have become a major theme in elections. Trump was elected on a strong anti-immigrant’s platform, which continues in his government. Governments in Hungary, Austria, Poland, Czechia, Slovakia, are based on refusal of immigrants. All over Europe, from the Nordic countries to France, Nederland’s and Germany, anti-immigrant feelings are conditioning the governments. In the Italian election, the old fox of Berlusconi, to take votes away from the xenophobe Salvini (who is the Italian counterpart of the international nationalist, with Putin in Europe and Trump in the world as leaders), has promised that he will expel 600.000 immigrants, if he wins the election. Renzi government is presenting the reduction of immigrants by sea, as one example of his good governance (little mention that this was done by distributing money to all Libyan factions and to the immigrant’ s smugglers). The fear is that immigrants are stealing jobs and resources to the legitimate European citizens. The statistics from the European Union tell us that the total number of non-EU citizens living in Europe (some for a long time), is now 35 million people. Of those about 8 million were Africans, and seven million Arabs. Those figures included also illegal immigrants. That, in a population of 400 million. All statistics point out that more than 97% of the immigrants are totally integrated, that they pay in average more taxes than the locals (of course, they worry about their future), and up now those who do not have a job are about 2.3 million people, who are still waiting about their juridical situation. There is not a single study who claims that immigrants have taken the jobs of European in any significant way. It was the same story against the entry of woman in the labour market. An increasing proportion of women have joined the labour force over the last 30 years, but these increases have not coincided with falling employment rates for men. A study on Brexit proves that immigrants helped to increase the National Gross Product, and the increase in productivity meant a global increase of employment. But we have reached a point where nobody any longer listens to facts, unless they are convenient…
And now the concrete proposal. It is clear that the real threat to employment for the large majority of citizens comes from robotization, not immigration. No employed person has been fired to be substituted by an immigrant, unless we talk of non-qualified jobs, that Europeans do not want anyhow. Truck drivers, taxi drivers, bus drivers, school drivers, to take the most imminent example, do not fear immigration for their job. Well, in very few years, their job will become obsolete, and there will be no plans or preparation for that. When the problem will blow up, politics will start to look at it. Maybe it would be a more responsible thing to do that we start to face the real problems that our society is facing, automation, instead of stoking fear with populism and xenophobia.
Here is a simple proposal: somebody who takes a robot, is making money because of its superior productivity, and he is firing somebody. He is therefore, after having paid the robot during usually a couple of years, have a 100 per cent benefit from the firing of a human. Well, he will not have 100%, but a 60%, because he will continue to pay the social costs of the human fired: its pension, taxes and health insurance.
That is not as costly as the Universal Basic Income, is easy to organize and administer, and will be a way to realize partly the old utopian dream: that machines work for humankind. Can we start a political debate?