People who will lose their jobs will suffer, but does this mean that technology is bad or is to blame? — Photo by Israel Andrade on Unsplash
Consider this recent MSN headline: “Why is Amazon spending billions of dollars to expand but slashing 14,000 jobs?”
According to the story, the company plans to invest US$20bil (RM80.9bil) in a new artificial intelligence campus and data centers while reducing the human workforce.
People who will lose their jobs will suffer, but does this mean that technology is bad or is to blame?
Technology is best understood as a tool that helps humans work more efficiently.
Our first technology may have been a stick which an ancient farmer used to poke holes in the dirt where he could easily plant a seed.
His new efforts produced increased outputs of food, more than he could eat or sell.
Did his tribe tell him to produce less? Was he or his neighbor laid off?
Successful tribes understood that this surplus product could be used to support other members who were not growing (or chasing) food: teachers, medicine experts, spiritual leaders and those who were unable to work. In this case, the tribe’s internal processes controlled the use of the surplus product derived from the technology.
Over time, farmers realised that technology enabled them to reduce their work time down to 60 to 70 hours a week while still satisfying the demands on their surplus product. Technology was giving them more time for their personal interests. Industrial workers experienced the same effect: In the 1930s the standard work week was lowered to 40 hours by federal law.
AI economy will create shared benefits and responsibilities
In modern times we can still see how societies allocate their surplus output.
In the former Soviet Union, foreign guests were shocked to learn that their host boasted the world’s highest economic growth measured by Gross Domestic Product.
This happened because the state, which controlled the surplus output, invested it in military and related fields while consumer goods showed no appreciable growth.
In the US, the surplus product is first controlled by employers and the rest (called profit) is then taxed by government to achieve social goals.
The amount thus collected and spent depends on the party in power; more by the Democrats and less by the Republicans.
If AI enhances worker productivity as its supporters claim, who will capture the future surplus output?
The answer to this question will determine if our society sees a deepening gap between the haves and have-nots or will achieve a greater sense of shared benefits and responsibilities.
Georgians know this issue well; our average manufacturing wages rank 48th in the country.
In the nation, productivity increases have grown faster than wages since the late 1970s.
Technology could allow better work-life balance
Doing nothing would cede authority to corporate employers and allow them to accumulate a greater share of the country’s income. Workers whose jobs are eliminated are forced to move into fields where technological advancements are rare and wages are kept low by the supply of the unemployed.
The alternative would be to share the increased output from technological advancements. The standard work week has been frozen at 40 hours during almost 90 years of unprecedented technological change. Think of how work was done when the Fair Labor Standards Act was passed in 1938 (and amended in 1940).
If the standard work week would be reduced (slowly) to 35 or 32 hours, fewer people would lose jobs to technology. Any lingering wage differences between the tech-heavy and tech-light industries could be reduced by adjusting the minimum wage rate.
Also, with people working fewer hours, our work-life balance would be improved and the impact of the predicted labor shortage would be ameliorated. With the hourly cost of labor increasing, employers would demand fewer workers. – The Atlanta Journal-Constitution/Tribune News Service
After teaching economics to MBA students in Minnesota, Kenneth Zapp retired in Savannah, where he taught part time at Savannah State University and helped people start businesses through the local SCORE chapter.
