How will those displaced by technology survive?

Twenty Twenty-Four – our Orwellian destiny? drew parallels between the disturbing prophesies in George Orwell’s Nineteen Eighty-Four and the disquieting situation we are now experiencing as sophisticated technologies – robots and algorithms – are enabling the collection of more and more personal data that is being used increasingly by companies and political parties to manipulate our thinking, our behaviour and our decision-making. This is alarming because it threatens the very fabric of our society. You can read the details in Twenty Twenty-Four – our Orwellian destiny?

There is though an even more distressing accompaniment to these technological advances – the displacement of human workers by robots and algorithms. This piece addresses this issue. It is rather long because the ramifications are so complex. Please be patient.

We have already seen in our own country robots enter manufacturing to do work that previously was done by people. Thousands have been displaced, and made redundant. The number displaced by algorithms though will be greater still. Just look at some relevant facts from Twenty Twenty-Four – our Orwellian destiny?:

In the coming 10 to 20 years around half of today's jobs will be threatened by algorithms.

Even today, algorithms perform 70% of all financial transactions.

People, who thereby earned a living to support themselves and their families, previously carried out those transactions. It won’t be long before virtually all such transactions will be algorithm-driven. The only ones left employed will be those who write the algorithms, and don’t be surprised if automatically generated algorithms appear that require even fewer humans.

As a result of automation and algorithm driven processes 40% of today's top 500 companies will have vanished in a decade.

Reflect on that – during the next ten years, by 2027, 200 of the top 500 companies will disappear.

The top 10 global companies listed in the Fortune Top 500, and their current revenues in millions of US dollars, are:
  1. Walmart $482,130 (i.e. $482.13 billion)
  2. State Grid Corporation of China $329,601
China National Petroleum
Sinopec Group 
(China Petroleum & Chemical Corporation) $294,344
  5. Royal Dutch Shell
Exxon Mobil 
  8. Toyota Motor
Note that three are in China, one is the world’s largest electric utility company in the world (State Grid Corporation of China), five are oil companies, two are automobile manufacturers, one is a giant retail outlet, and one an IT company.

Imagine how many workers they employ to do both manual and cognitive work.

Nobody knows whether any of these will be among the 200 of the top 500 companies that will disappear in the next decade; the list is provided simply to illustrate the size and financial strength of companies in the Top 500, so that an idea of their current workforce can be contemplated.

When such companies disappear, what, if anything, will replace them? What will workers in those companies do after their employers have gone? Will there be alternative work? If not, how will they live? Are governments planning for this eventuality? Are there any who are doing so? Is our federal government doing so?

Futurists assure us that as old jobs disappear new jobs will be created; many will be jobs that have never been heard of. Even as that is the case, it seems inevitable that there will be a net loss of jobs. It seems inescapable that many, many millions of workers around the world will lose their jobs; Richard di Natale asserts that 5 million Australian jobs will be lost in the next decade. Unless alternative jobs can be created, there will be vast numbers of unemployed. Many may never be able to work again, earn again, support a family again, or prepare for retirement. As job opportunities dry up permanently, some will never have a job. The desolation will be stupefying, and deeply distressing.

None of us can escape this unfolding tragedy. Even those with a job will rub shoulders with those without a job – in the streets, in the supermarkets, in shopping centres, at sporting venues, at meetings, and at church. Society risks being fractured. Tensions will rise as those who work are called upon to support those who don’t and can’t. Governments will have more calls on their social welfare support than ever.

Given the magnitude of the emerging problem of an expanding body of unemployed, what can be done? The unemployed can’t be abandoned to wallow in poverty and sink into homelessness. Yet that is what is already happening. Did you see Four Corners on Monday 13 March: The Price of the American Dream produced by French film-maker Helene Eckmann?

The episode was promoted with these words:
"I never figured I'd be in this kind of situation, for my kids to be in this kind of situation...I'm dumbfounded."

"Make America Great Again!" was the catch cry that propelled President Donald Trump all the way to The White House. He tapped into the deep sense of unease felt by many Americans, that despite the nation's economic recovery after the global financial crisis, they have been left behind. "It's a struggle every day. How am I gonna make it today? How am I gonna make money to buy food, how am I gonna make money to cook my kids dinner at night?"
Four Corners portrayed the distressing story of those Americans desperately hoping for change – America's shrinking middle class – who are fast joining the swelling ranks of the working poor. You will be surprised and disturbed by what you see.

Yet this is just what we can anticipate in our own country.

What can and should be done?

The response of the LNP has been dismal. Where is the evidence that it even recognizes this emerging problem let alone is doing something about it?

Not satisfied with making matters worse for the poorest sections of our community via the punitive 2104 Abbott/Hockey Budget, the then employment minister Eric Abetz came up with the brilliant requirement that the unemployed be required to apply for 40 jobs a month, a hopelessly unrealistic impost (especially in Abetz’ home state of Tasmania), designed to further humiliate those without a job. Then along came the requirement that job seekers applying for Newstart or Youth Allowance, who have not been previously employed, should face a six-month waiting period of no income support before they are eligible for payments.

More recently we had the Centrelink's disastrous data matching program that targetted pensioners and the disabled demanding repayment of alleged overpayments. For a royal flush, add to these assaults the threatened Medicare co-payment system, and the LNP-approved reduction of penalty rates at weekends.

Why does the LNP do such things?

Because their political philosophy is grounded in the ‘Strict Father’ model of parenting that conservatives embrace, a concept explained in The myth of political sameness published on The Political Sword in December 2013. George Lakoff, who has studied American politics for decades, uses this metaphor:

The Nation is a Family.
The Government is a Parent.
The Citizens are the Children.

Building on the Nation as Family metaphor, Lakoff identifies two types of family based upon two distinct styles of parenting, which he assigns to conservatives and progressives respectively. When applied to the Nation as Family metaphor, they result in vastly different behaviours.

The two parenting styles are:
The Strict Father model, and
The Nurturant Parent model.

He’s what he has to say about the ‘Strict Parent’:
”In the conservative moral worldview, model citizens are those who best fit all the conservative categories for moral action. They are those who have conservative values and act to support them; who are self-disciplined and self-reliant; who uphold the morality of reward and punishment; who work to protect moral citizens; and who act in support of the moral order.

"Those who best fit all these categories are successful, wealthy, law-abiding conservative businessmen who support a strong military and a strict criminal justice system, who are against government regulation, and who are against affirmative action. They are the model citizens. They are the people whom all Americans should emulate and from whom we have nothing to fear. They deserve to be rewarded and respected.

“The American Dream is that any honest, self-disciplined, hard-working person can do the same. These model citizens are seen by conservatives as the Ideal Americans in the American Dream.”
By contrast, the unemployed, those who don’t or can’t work, are anathema to conservatives. They do not fulfill these criteria.

Lakoff summarises:
The conservative/liberal [progressive] division is ultimately a division between strictness and nurturance as ideals at all levels – from the family to morality to religion and, ultimately, to politics. It is a division at the center of our democracy and our public lives, and yet there is no overt discussion of it in public discourse. Yet it is vitally important that we do so if Americans are to understand, and come to grips with, the deepest fundamental division in our country, one that transcends and lies behind all the individual issues: the role of government, social programs, taxation, education, the environment, energy, gun control, abortion, the death penalty, and so on. These are ultimately not different issues, but manifestations of a single issue: strictness versus nurturance.
In Australia, an identical and just as fundamental division exists between the Coalition, the conservatives, and Labor and the Greens, the progressives. This division results in the striking differences in attitude, behaviour, rhetoric, policy, and indeed morality, which day after day define our own conservatives and our own progressives. It explains so much of the contrast we see.

How then will the unfolding tragedy of increasing and intractable unemployment be managed? What will the LNP do in the face of its overbearing conservative elements? What will progressives, such as Labor and the Greens, do? Will they simply follow the Strict Father and Nurturant Parent models respectively that so govern their behaviour?

Already we have seen the LNP punitively apply the Strict Father model to the unemployed and the never employed. They see them as ‘leaners’ and ‘dole bludgers’ who are uninterested in finding work, lazy about applying for jobs, fussy about what work they will do, quick to quit if they don’t like a job, preferring instead to sleep in, watch TV and drink VBs. They aggressively tell them, indeed all of us, that ‘the age of entitlement is over’. Except, of course, for them!

The LNP exhibits anger towards those without a job, believes that those who don’t have one are lesser beings that ought to be hounded, demeaned, humiliated, and left minimally supported. How on earth can the LNP, while harbouring such attitudes, manage the tsunami of job losses that we know is coming as automation and algorithms sweep across our nation and the globe? They have not uttered one word about this peril. Do they have any idea what to do? Will their Strict Father approach permanently disable them politically? Will they ever be able to offer a solution? I doubt it.

Yet there are solutions, there are ways of managing the inevitable changes to our society.

What then is possible?

Two concepts are gaining momentum:
A universal minimum basic wage for all working age citizens, whether or not they have a job.
A shorter working week, so that more people can be employed to do the work that is available.

Richard di Natale promoted the latter in his National Press Club address on 13 March. It’s an idea, but it is embryonic. I won’t expand on it here. Instead, I’ll focus on the concept of a universal basic wage as a counter to the rising unemployment resulting from automation.

In the July/August 2014 issue of Politico Magazine there was a seminal article by Nick Hanauer, billionaire investor in Amazon titled: The Pitchforks Are Coming – For Us Plutocrats

His long article that extends over several web pages, is well worth reading in full, but here are some excerpts:

He advocates a minimum basic wage for everyone. .

To highlight the need for it, he begins by contrasting extremely rich oligarchs like himself with the rest of US society to demonstrate the rapidly rising inequality there, something that will progressively worsen as job losses and unemployment due to automation bite:

"The divide between the haves and have-nots is getting worse really, really fast. In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today, the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

"But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution!

"And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: "Wake up, people. It won’t last."

"If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when."
Here is his argument for a minimum basic wage:
"The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.

"What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.

"It’s when I realized this that I decided I had to leave my insulated world of the super-rich and get involved in politics. Not directly, by running for office or becoming one of the big-money billionaires who back candidates in an election. Instead, I wanted to try to change the conversation with ideas—by advancing what my co-author, Eric Liu, and I call “middle-out” economics. It’s the long-overdue rebuttal to the trickle-down economics worldview that has become economic orthodoxy across party lines – and has so screwed the American middle class and our economy generally. Middle-out economics rejects the old misconception that an economy is a perfectly efficient, mechanistic system and embraces the much more accurate idea of an economy as a complex ecosystem made up of real people who are dependent on one another.

"Which is why the fundamental law of capitalism must be: If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around."
Subsequently, he was interviewed about his ideas on Lateline by Steve Cannane, which you may find interesting viewing.

Many are thinking along this line.

Another article you may enjoy reading is in The Guardian of 6 March 2017 titled: Utopian thinking: the easy way to eradicate poverty by Rutger Bregman, subtitled: Keeping people poor is a political choice we can no longer afford, with so much human potential wasted. We need a universal basic income..

He concludes: "It’s an incredibly simple idea: universal basic income – a monthly allowance of enough to pay for your basic needs: food, shelter, education. And it’s completely unconditional: not a favour, but a right. But could it really be that simple? In the last three years, I have read all I could find about basic income. I researched dozens of experiments that have been conducted across the globe. And it didn’t take long before I stumbled upon the story of a town that had done it, had eradicated poverty – after which nearly everyone forgot about it."

He goes on to describe what happened in the Canadian town of Dauphine, northwest of Winnipeg, beginning in 1974. It makes exciting reading.

Richard di Natale mentioned the concept in an answer to a question at his National Press Club address, the only federal politician I have heard to do so. He mentioned that it is being trialled in several countries, notably Scandinavian nations.

So there is an answer to the question: How will those displaced by technology survive?

One is the idea of a universal minimum basic wage for all whose income is insufficient to meet basic needs for food, shelter, education and healthcare.

Another is the idea of job sharing so that some who are overworked relinquish work to those who, displaced by technology, have none, or too little – Richard di Natale’s ‘shorter working week’.

There are solutions to the growth of technology-induced unemployment, ones that have already been shown to be effective, and others that are worth a trial.

But who is even thinking about the problem, let alone doing anything?

The Greens have begun, but what of our government and our opposition? So far, oppressive silence and indolence is all we have seen from the major players. With their Strict Father mindset, we can expect nothing from the LNP, but where is Labor with its Nurturant Parent mindset?

What do you think?
Does this scenario scare you?

What should governments be doing to prepare for the unemployment that technology will unleash?

Let us know in comments below.

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Comments (9) -

  • Ross

    3/28/2017 11:34:34 AM |

    What do I think Ad?
    To have a fair and reasonable society without masses of unemployed causing mayhem a future federal government may be forced into introducing a living wage for all members of society. This move may be a necessity to halt today's steady decline of Australia into third world status anyway.
    It would probably have to be a work for the government scheme in a total reversal of government policy where recipients are not vilified and victimised. Payment legally tied to a healthy percentage of politicians salary would be a good start.
    It would be paid for by the same method the age pension is paid today, currency issuance. A$ created out of thin air, what is essentially numbers typed into a large Reserve Bank spreadsheet.
    This concept not as far fetched as some would believe and is even now being debated in some of the more progressive countries.
    Off course we will have to elect a far better range of thinking politicians for this to happen. No IPA trickle down fruit bats, far less useless, lying, rorting dipshits and definitely no more fully owned and paid corporate shills. That would take out 95% of federal members at no great loss to society.
    The only thing consistent is change and some changes are forced on a society for its own good.

  • Stephen Tardrew

    3/28/2017 12:05:21 PM |

    Regardless of technology the inequity fix is in. It does not matter what type of technological development they will exploit it for endless greed and inequality.

  • Ad Astra

    3/28/2017 12:16:32 PM |

    Thank you for your comment. I agree with everything you have written.

  • Ad Astra

    3/28/2017 12:18:46 PM |

    Stephen Tardrew
    I agree - inequity is inbuilt into our economic system, and there are plenty who will make it worse as they pursue their own greedy goals.

  • Ad Astra

    3/28/2017 12:24:19 PM |

    In case you think that awareness of the consequences of the advent of robots and algorithms is a recent revelation, read the words of the final sermon of the Reverend Martin Luther King Jr. on March 31st 1968, just one week before his assassination. Titled: ’Remaining Awake Through a Great Revolution’ he said: “There can be no gainsaying of the fact that a great revolution is taking place in the world today. In a sense it is a triple revolution: that is, a technological revolution, with the impact of automation and cybernation [algorithms]; then there is a revolution in weaponry, with the emergence of atomic and nuclear weapons of warfare; then there is a human rights revolution that is taking place all over the world…”

    At that time in the US a group of prominent academics, journalists, and technologists formed the Ad Hoc Committee on the Triple Revolution, which delivered its report to President Lyndon Johnson and the media in March 1964, over 50 years ago. It warned that: “cybernation (or automation) would soon result in an economy where ‘potentially unlimited output can be achieved by systems of machines which will require little cooperation from human beings’. The result would be massive unemployment, soaring inequality, and, ultimately, falling demand for goods and services as consumers increasingly lacked the purchasing power necessary to continue driving growth.”

    The Ad Hoc Committee went onto propose a radical solution: “…the eventual implementation of a guaranteed minimum income made possible by the ‘economy of abundance’ such widespread automation could create, and which would ‘take the place of a patchwork of welfare measures’ that were then in place to address poverty.”

    Reference: The Rise of the Robots – Technology and the threat of Mass Unemployment, Martin Ford: OneWorld Books, 2015.

    This was over 50 years ago!. Yet here we are in 2107 without a plan for managing the inevitable tsunami of robots and algorithms that will sweep millions out of work onto the chaotic scrapheap of the unemployed. What on earth are our governments doing? Can there be a task any more important than preparing for an identified disaster?

    The government and civil authorities in North Queensland are preparing for Cyclone Debbie. They know it’s coming, where it will strike, and how hard. They know the likely consequences. They are planning for it. Yet the much more devastating cyclone of unemployment subsequent to automation seems to have attracted little attention.

    Everyone knows its coming, and what the consequences for our society will be. The Greens are aware and have suggested plans to cope with it. But where are our governments, the other political parties, and civil authorities? Silent and indolent – asleep at the political wheel!

    Yet the cyclone of unemployment is already upon us. Only yesterday there was a report on youth unemployment by the Brotherhood of St Laurence:

    Underemployment among young people is now at its highest in the 40 years since it has been officially counted, according to a report from the Brotherhood of St Laurence released on Monday.

    “In February underemployment was 18% of the youth labour force, affecting even more young people than unemployment, which was 13.5%.

    “In total, some 659,000 young people were unemployed or underemployed – defined as having some work but wanting more hours. There were 282,000 young people unemployed and 377,000 underemployed.”

    Jon Faine devoted an hour on ABC Radio Melbourne to this report yesterday, and again this morning. The stories told by several young people unsuccessfully seeking employment that rang in, were heart-rending.

    But who is listening? Who in government cares? Who is planning?

  • Neil Hogan

    3/28/2017 12:38:47 PM |

    "The response of the LNP has been dismal. Where is the evidence that it even recognizes this emerging problem let alone is doing something about it?"

    They not only recognise it, they embrace it because it suits their economic mindset!!

    Vote 1 for Algorithms at the next election & if they win the politicians will be gone in no time at all.

  • Ad Astra

    3/28/2017 1:32:17 PM |

    Neil Hogan
    I applaud your sense of humour. If only we had algorithms instead of politicians, how much better off we would be. So long as the politicians don't create the algorithms! But that's a silly idea - they wouldn't have a clue!

  • Patriciawa

    3/28/2017 6:31:45 PM |

    Ross, why can't we even today have 'a fair and reasonable society without masses of unemployed' simply by supporting the men and women Ad Astra describes as 'displaced by technology' in the kind of work you both suggest?  They can contribute to society without stigma in a range of useful and creative ways:  our public gardens, buildings and roads could be transformed and maintained by those of a practical bent, while those wanting to teach and lecture would be welcome in  schools and colleges at every level. Hospital ward staff would welcome extra pairs of caring hands........I could go on.......                                                          

    We need to re-think the concept  of 'unemployment benefits' and the linking of  'community service'  to our penal system needs disconnecting.  Surely it's not beyond a massive government PR effort to remove the stigma of  being out of today's conventional workforce?

  • Ad Astra

    3/29/2017 9:29:42 AM |

    There is much merit in what you and Stephen Tardrew suggest. The idea of a universal basic wage is not new and has been shown to work.

    Here is one example:

    Not long ago the Huffington Post reported on the success of the Democrat Governor of the US state of Minnesota (Mark Dayton) and his remarkable turnaround of the state’s economy. When he took office in 2011, he inherited a deficit of US$6.2 billion and 7% unemployment. In 2015, Governor Dayton handed down a budget surplus of $1 billion that he has pledged to spend on transportation and education.

    How did Dayton do it? Well you could say he threw the ‘supply-side theory’ (trickle down economics) out the window. Not only did he raise taxes on the highest earners in Minnesota; he increased the basic wage in the state to $9.50 an hour.

    Republicans went berserk, warning that businesses would flee the state and take jobs with them.

    The disaster Dayton's GOP rivals predicted never happened. Two years after the tax hike, Minnesota's economy was booming. The state added 172,000 jobs during Dayton's first four years in office. Its 3.6 percent unemployment rate is among the lowest in the country, and the Twin Cities have the lowest unemployment rate of any major metropolitan area. Under Dayton, Minnesota has consistently been in the top tier of states for GDP growth. Median incomes are $8,000 higher than the national average. In 2014, Minnesota led the nation in economic confidence, according to Gallup.

    Scott Walker is the Republican Governor of Wisconsin — the neighbouring state to Minnesota. For decades, the two states have been comparable in a number of social and economic criteria.

    Walker stuck to the traditional conservative trickle down strategy of giving tax cuts to the top end of town, and keeping wages down. He is seen as a conservative hero by legislating to remove considerable negotiating power from the public service unions in Wisconsin.

    The net result is that Wisconsin is being outperformed economically by Minnesota. Wisconsin has an unemployment rate of 5.2 percent compared with 3.6% in Minnesota. Wisconsin is languishing while Minnesota is booming.

    Another example is Seattle in Washington State; when the basic wage was increased, the economy boomed.

    The term ‘Middle-out economics’ is being applied to this phenomenon. The theory is: give the middle class and low wage earners a decent wage and they will spend it on consumer items – food, clothing, fuel and so on. This creates demand, which in turn creates jobs to meet the demand. It’s not rocket science; it works.

    Yet conservatives don’t want to believe it – they prefer the discredited trickle down strategy. They are still at it. Turnbull insists he still wants to go through with his $50 billion tax cuts to business. Trump is singing the same song. They are incurable addicts to the zombie economics of ‘trickle down’.

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