The middle and working classes have experienced a decline in their fortune. Sending jobs overseas, the exhaustion of the manufacturing sector, the shift to a service economy and the weakening of unions have been blamed for the challenges facing a majority of Americans.
There is an interesting, compelling, and alternative explanation. According to a new university research study, Automation technology has been the main driver of income inequality in the United States over the past 40 years. The report, published by the The National Bureau of Economic Research says that 50 to 70% of wage changes in the United States since 1980 can be attributed to wage cuts among blue-collar workers who have been replaced or degraded by automation.
Artificial intelligence, robotics and sophisticated new technologies have created a large chasm in wealth and income inequalities. It looks like this problem will accelerate. So far, white-collar college graduates have largely been spared the plight of workers without a degree. People with a postgraduate degree have seen their wages increase, while “workers with little education have fallen considerably”. According to the study, “the real incomes of men without a high school diploma are now 15% lower than they were in 1980”.
Much of the change in the wage structure in the United States, according to the document, has been caused by companies automating tasks that were previously performed by people. This includes “CNC machines or industrial robots replacing blue collar workers in manufacturing or specialized software replacing office workers.”
Artificial intelligence systems are ubiquitous. AI-powered digital voice assistants share anything you want to know just by asking a question. Instead of a live person tackling an issue, a business chatbot forces you to engage with it. The technology is remarkable. It helps diagnose cancer and health problems. Banks use sophisticated software to check for fraud and bad behavior. Driverless automobiles, news feeds, social media, and job applications are all controlled by AI.
The World Economic Forum (WEF) concluded in a recent report: “A new generation of intelligent machines, powered by rapid advances in AI and robotics, could potentially replace a large part of the existing human jobs. Robotics and AI will cause a serious ‘double disruption’ as the pandemic has prompted companies to accelerate the deployment of new technologies to reduce costs, improve productivity and be less dependent on real people. automation will cut around 85 million jobs by 2025. In a dire prediction, the WEF said: “While new jobs are being created as in the past, the problem is that there may not be. not be enough for everyone, especially since the cost of intelligent machines decreases over time and their capacities increase.
Management consulting giant WaterhouseCoopers Award reported, “AI, robotics and other forms of intelligent automation have the potential to bring great economic benefits, contributing up to $ 15 trillion to global GDP by 2030.” However, this will have a high human cost. “This additional wealth will also generate demand for many jobs, but there are also concerns that it will displace many existing jobs.”
Concerns about new technologies disrupting the workforce and causing job losses have been around for a long time. On the one hand, the argument is that automation will create new and better jobs and remove the need for physical labor. The counterclaim is that those without the appropriate skills will be relocated and will not have a home in the new environment.
Amazon, Google, Microsoft, Apple, Zoom and other tech giants have benefited greatly financially from the pandemic. The virus outbreak has accelerated trends including the choice of technology over people. There is still a need for humans. For example, although Amazon has invested heavily in automating its warehouses, the online retail giant still had to hire more than 300,000 workers during the pandemic. This brings up another important overlooked issue: the quality of a job. AI proponents say there is nothing to worry about, because we have always successfully dealt with new technologies. You might have a job, but how good is it?
To stay relevant, you’ll need to learn new skills to stay ahead of the game. Bloomberg reported, “More than 120 million workers worldwide will need retraining over the next three years due to the impact of artificial intelligence on employment, according to an IBM survey. The number of individuals who will be affected is immense.
The world’s most advanced cities are not ready for artificial intelligence disruptions, says Oliver Wyman, a management consulting firm. More than 50 million Chinese workers are believed to be in need of retraining, following an AI-related deployment. The United States will need to re-equip 11.5 million people in America with the skills necessary to survive in the workforce. Millions of workers in Brazil, Japan and Germany will need help with the changes brought about by AI, robotics and related technologies.
For those who might be left behind, there is a call to deliver a Universal Basic Income (RBI). The idea gained national attention when it became a major feature of Democratic candidate Andrew Yang’s 2020 presidential campaign. Yang’s policy was to lift people out of poverty or help them through difficult times with a guaranteed monthly income. Proponents say it gives people the financial security they need to find good jobs and avoid going into debt. Critics argued that the free money would deter working, creating a state dependent society.
Robots will cut 200,000 banking jobs over the next 10 years, according to a Wells Fargo research report. This has already had a negative impact on high-paying professionals on Wall Street, especially stock and bond traders. These are the people who worked in the trading rooms of investment banks and traded securities for their banks, their clients and themselves. It was a very lucrative profession until algorithms, software and quantitative trading programs disrupted the business and made their skills useless, compared to fast-acting technology.
There is no hiding from robots. Well-trained and experienced doctors will be sidelined by sophisticated robots that can perform delicate surgeries more accurately and read x-rays more efficiently and accurately to detect cancer cells that cannot be easily seen by the human eye.
Truck and taxi drivers, cashiers, retail salespeople, and people who work in manufacturing plants and factories have been and will continue to be replaced by robotics and technology. Driverless vehicles, kiosks at fast food outlets, and quick, self-contained phone scans in stores will soon eliminate most minimum-wage, low-skilled jobs.
The rise of artificial intelligence will make even software engineers less sought after. That’s because artificial intelligence will soon be writing its own software, according to Jack Dorsey, the tech billionaire boss of Twitter and Square. This will put some entry-level software engineers in a tough spot. Discussing how automation will replace jobs held by humans, Dorsey told Yang during an episode of the Yang speaks podcast: “We talk a lot about self-driving trucks and so on. ” He added, “[AI] even comes for programming [jobs]. A big part of the goals of machine learning and deep learning is to write the software itself over time, so many entry-level programming jobs just won’t be so relevant.
When management consultants and companies deploying AI and robotics say we don’t have to worry, we have to worry. Companies, whether it’s McDonald’s, introducing self-service kiosks and laying off hourly workers to cut costs, or leading investment banks that rely on software rather than merchants to make million dollar bets on the stock market, will continue to implement downsizing technology, with the aim of increasing profits.
This trend has the potential to have a negative impact on all categories of workers. In light of the study’s spotlight on the disastrous results of AI, including lost wages and rapidly growing income inequality, it’s time to get serious about how AI should be run ahead. let it be too late.