Luddites were right — the sky is falling

In the mid- to late 19th century, the Luddites feared automation would eventually take away all the jobs worked by mankind, leaving a few wealthy elites and millions upon millions of hapless people without work.

Looking back, the Luddites appeared like the chicken who cried the sky is falling. Technology produced more new jobs than were replaced by machines. Conventional wisdom holds that increased technology increases productivity, which in turn increases wages. Increased wages and newly formed jobs means better days for all.

For most of the 20th century, conventional wisdom held true to reality, though that was little relief for displaced workers, as there has always been a time lag between technology taking jobs and creating new ones.

Furthermore, America has never done a very good job at retraining its workforce. All this brings me to a chat I had a few months back with a local city councilman. He derided Washington for discussing guaranteed incomes for everyone. I responded that it was just talk for now but asked if he understood why such talk was taking place.

The answer, of course, is the fear the Luddites were right.

What should government do if automation takes most people’s jobs? One of those who truly fears this to be the case is the noted Stephen Hawking, who warned that automation and artificial intelligence will decimate middle-class jobs.

I confess, I am not smart enough to challenge Stephen Hawking, and he is not alone in his fears. So, I will assume he has a valid point.

The councilman and I, in our waning years, have no need to fear the future of work. Our grandchildren, however, have every right to be concerned.

Conventional wisdom has been turned on its ear in the past few decades. Increased production from technological advances no longer creates increased wages.

Since the Great Recession, job creation has not kept up with population growth. As noted in “Scientific American,” corporate profits have doubled since 2000, yet median household incomes — adjusted for inflation — have declined.

At the same time, the magazine notes after-tax corporate profits as a share of GDP increased from 5 to 11 percent while the share of GDP from compensation of employees dropped 6 percentage points. In layman’s terms, corporate America is making greater profits while worker’s earnings are lagging. Yes, earnings recently are on the uptick, but they still pale in comparison with corporate profits.

In the first decade of this century, American manufacturers produced greater output than ever but cut 5.6 million jobs, according to a Ball State study. Eleven percent of so-called routine jobs disappeared.

These jobs didn’t simply move overseas. Displaced factory workers earning $25 an hour struggled to find work at half their previous wages, and when they did, it was with fewer benefits. Americans outside of the manufacturing sector are no longer immune to the Luddite fears.

Once, technology only replaced manual labor jobs but now are increasingly tackling jobs that require more cognitive functioning. One need only shop at the grocery store or Walmart to see the future. An alarming number of jobs once thought safe are now endangered. The range of such jobs would have been unimaginable a decade ago.

Brookings Institute for Innovation + Entrepreneurship estimates 40 percent of current American jobs will be gone within the next two decades. A joint Citibank and Oxford University study predicts the number higher at 47 percent. The projections are worse for Asian workers, expected to lose 77 percent of current jobs.

President Donald Trump’s treasury secretary, Steve Mnuchin, stated that job losses from automation are “not even on our radar screens.” That statement concerns me and is no comfort for those whose jobs are in jeopardy. Our leaders need to get in front of the cart and develop intelligent, forward-thinking policies rather than policies that promise a return to a past that is not coming back.

Like toothpaste squeezed out of the tube, technological advancements will continue to eliminate jobs. If our national policies aren’t geared toward retraining and the creation of new types of middle-class jobs, America might suffer for decades. Such forward-thinking policy development might be the most important task facing American leaders today.

Michael Adkins is the former chair of the Hancock County Democratic Party. He lives in Greenfield. Send comments to dr-editorial@greenfieldreporter.com.