Automation, artificial intelligence, globalization. They are the three heads of a monster that threatens the future of the American working class with the promise of canceling millions of jobs. Starting from a punctual and convincing analysis of the socio-economic landscape of the United States, Yang within The War of Normal
People describes the impact – in part already underway – of new technologies on Americans who receive hourly wages of less than $ 20 an hour: truckers, workers, waiters, but also employees.
To counter the effects of the expected loss of millions of jobs, this article proposes the establishment of a universal basic income that will bring everyone above the poverty line and that will allow a “centric human” capitalism based on a new currency to be born. : the weather.
Automation is changing the world of work, such as preventing unemployment
Who are “normal people”? It is the middle class, to which 70% of Americans believe they belong.
The question is, what will ordinary people do in the coming years? Automation and artificial intelligence are pushing people out of the job market, thousands of jobs will be lost in the near future. Right now, some of the smartest people in the country are looking for a cheaper version of you: a foreign worker, a software, a robot.
There is no malice in this. The market rewards those who do things more efficiently and efficiency loves things done effectively and at the lowest possible cost. A wave of automation and job losses is not the vision of a dystopian future, but a transformation already underway.
The numbers tell a story that we have so far wanted to ignore: there is a growing mass of permanent unemployed, automation is accelerating to the point of affecting social structures and our lifestyle.
A report released by the White House in December 2016 traces the landscape for the next 15/20 years: 83% of jobs paid less than $ 20 an hour will be automated. According to the report, between 2.2 and 3.1 million car, bus and truck drivers will disappear with the advent of self-driving vehicles. Driving a truck is one of the most common jobs in 29 states.
The same goes for the innovation that will “touch” cashiers, fast-food workers, people who deal with customer service. Automation has already eliminated 4 million jobs in the manufacturing industry from 2000 to today.
The workforce in the United States is now 62.5%, lower than that of almost all other industrialized countries. The number of Americans who are not part of the workforce is 95 million.
This is the phenomenon I call The Great Displacement . This is the social, not only economic, issue that is more pressing than our time: the unease due to unemployment leads to the growth of social problems, including domestic violence, depression, drug use.
There is an entity that can reform society and prevent a large part of the United States from becoming jobless and without a future, the Federal State, which, however, currently has neither the budget nor the structure to act.
To reduce the effects of the Great Displacement it is necessary to invest in education, apprenticeship, training, tax incentives, but acting according to the usual policies is not enough, because we are used to thinking that the market solves most of the problems, but this time it will be the opposite .
The employment scenario in America in recent years
The Venture for America project that I founded in 2011 brings young aspiring entrepreneurs to create businesses in cities that suffer from economic decline.
But the jobs created have a tendency to be very specific and often require a degree, this excludes 68% of the population from the start. Venture for America’s goal was to help create 100,000 new jobs by 2025.
An army of young people, prepared and motivated, started business in Detroit, New Orleans, Cleveland, creating new companies capable of creating opportunities and making local economies more dynamic. I have seen thousands of startups become mature companies and I have seen desolate suburbs filling up with newly employed people.
I ate alone in restaurants where I would have been the only customer of the day, driven along rows of abandoned sheds and farms and saw the resignation on people’s faces, only to find myself in Silicon Valley incredulous to find myself in the same country. I felt I was living in a bubble, far from the experience of the average American.
I began to study the trends of the labor market and the American economy and what I found shocked me: our economic engine has stalled and automation is pushing hundreds of thousands of people out of the labor market in the most vulnerable in the country.
I have spent the last few years trying to create jobs, but now I think the problem cannot be solved in this way.
How the world of work has changed over the decades
The Great Shift did not come suddenly. It is the answer – developed over decades – of the economy and the labor market to the evolution of technology, to changes in regulations, to globalization.
In the seventies, over 20% of workers were unionized, local commercial banks pressed businessmen to invest in local businesses, there were only 3 TV Networks, having a job meant having benefits and – almost always – a pension.
Today, 5 banks alone control 50% of the commercial banking sector, the number of workers registered in the union has halved, 94% of the contracts made between 2005 and 2015 are temporary and without benefits, people are forced to do more work to make ends meet. Real wages are flat or even in decline.
The chances of an American born in 1990 earning more than his parents are 50%, for Americans born in 1940 they were 94%. With globalization, American industries brought 14 million jobs out of the country in 2013 alone, resulting in lower costs and increased efficiency, but also increased pressure on American workers, forced to compete with the market. global work.
Since 1973, the gap between productivity and hourly wages has grown exponentially, also due to automation.
The relationship between company earnings and workers’ earnings has ceased: profits rise, but wages lose purchasing power. Companies can thrive and make profits without creating new jobs and without increasing wages.
The companies of the future don’t need many workers: Hilton Hotel employed 169,000 people in 2016, Airbnb had 3,100 employees in 2017. The work of “normal Americans” has become obsolete.
The numbers of the American world of work: jobs, wages and possible losses related to automation
Most of us surround ourselves with people like him, so knowing what is normal on average in a vast and composite country like America requires a thorough study.
For example, it should be considered that the average American worker with a low qualification earns $ 17 an hour. That in 2017 59% of Americans had no savings and were unable to pay an unexpected expense of $ 500.
Racial disparities are striking and there are substantial differences between men and women. If we talk about securities, the figure is disastrous: 20% of the population holds 92% of the stock market.
Office work. 2.5 million people doing $ 15 an hour paperwork risk losing it for automation. Not in 10 years now. Google, Apple, Amazon are investing billions in AI assistant (artificial intelligence assistance). Rob LoCascio, founder and CEO of LivePerson , a company that manages customer support for thousands of companies, estimates that 40-50% of the activities performed in a call center could go to automation already today.
Retail sales. The supermarket automatic checkouts are another example: a single employee assists customers, easily replacing 2/3 cashiers. 8.8 million Americans, paid $ 11 an hour, work in retail sales. One hundred thousand workers lost their jobs between October 2016 and May 2017 as a result of the closure of chains and shopping centers.
When a mall closes, the effect affects the entire local community. Many lose their jobs, but the loss goes further because malls are the pillars of the regional budget in terms of taxes. Thus came the cuts to schools, local administrative organizations, and so on.
When a mall closes, it is a sign that a community can no longer support it economically, but the main cause is the growth of e-commerce, in particular Amazon, a giant that controls 43% of the country’s e-commerce. Abandoned built-up areas plummet into an abyss of decline and become havens for small and large criminals.
Catering. The hourly wage for the third most popular job in the United States is $ 10. For these workers there is no immediate risk of job losses, because – especially in the “service” sector – workers cost so little that the incentives to replace them are low.
But the catering industry faces the decline in business caused by the many meals eaten at the desk with the growth of home delivery services. Then there is automation: McDonald’s has just announced to its customers “the experience of the future”, replacing cashiers with robots in 2500 stores.
Workers and truck drivers. Between 2000 and 2010, 5 million jobs burned in factories, 4 of which were due to automation. Males represent 73% in this sector, so about 1 in 6 working-class males are now unemployed, one of the highest rates among developed countries.
The average age of truck drivers, 94% of whom are men, is 49. Driving a truck is the most common activity in 29 states and there are 3.5 million truck drivers nationwide. In 2016 Uber bought Otto, a self-driving truck company, and hired 500 engineers to perfect the technology.
Switching to this technology is not only to save money, but also lives: more than 90% of the accidents that caused 3903 deaths in 2014 are due to truck driver errors, who spend an average of 240 nights a year in parking lots and 11 hours of as many days behind the wheel. • Employees and professionals We tend to think that automation will replace manual, repetitive jobs.
But the real distinction is all between routine and non-routine. Artificial intelligence can effectively replace any repetitive action, even that of a journalist, a doctor, a lawyer. GE (General Electric) has shown that his computer is capable of reading x-rays better than experienced radiologists.
The software can see shades of gray that are imperceptible to the human eye. We are entering an era of super-intelligent computers that store all sorts of data, from Facebook likes to users’ facial expressions, and based on this data they can make better decisions than a human being.
The computing power doubles every 18 months. Machine learning is an application of artificial intelligence that allows the machine to learn by itself through the data that is provided to it. It is not necessary to preorder a behavior: starting from the guidelines and data it has available, the machine will develop the appropriate choices by itself.
This is why Machine learning technology is often associated with Big Data , the science of data analysis. In 2016, the Department of Defense created Ellie, an artificial therapist, to treat veteran post-traumatic stress disorder.
Ellie appears on video as an avatar and interacts with patients, analyzing the answers to her questions to identify, through her tone of voice and facial expressions, if a soldier should be treated by a human specialist. Not to be overlooked, the soldiers seem to feel more comfortable with an artificial therapist than with a real one.
Jobs change but other aspects related to our life also change
For Oscar Wilde “work is the refuge of people who have nothing better to do”, for Voltaire “work keeps boredom, vice and need at bay”. Only 32% of people say they are happy to do their job, but losing it is one of the most destructive things that can happen.
The problem is that humans need work more than work needs them.
Imbalances in education. Another major problem is that major national universities are draining 75% of young talent: if you go to New York, Washington DC or California to go to university, you are unlikely to return to Wisconsin, Vermont, New Mexico.
There is also a disparity in the type of study chosen by young people: financial services and technology represent the majority of the top educational product and absorb the majority of young people who graduate.
De-industrialization and de-urbanization. The normal American thinks he will gain benefits by increasing access to technology and capital gains , but these advantages do not offset the reduction in opportunities.
Buying cheap T-shirts doesn’t improve the quality of life when your city’s factories and stores close. Youngstown in Ohio, Gary, Indiana, Camden, New Jersey, are cities that have become depopulated, impoverished and have seen crime grow due to the closure of manufacturing industries.
The distribution of business dynamism is today enormously unequal in the country: between 2010 and 2014, in 50% of the counties there were more activities that closed their doors than those that opened. Detroit has homes for 1.7 million people, but only 680,000 inhabitants.
In small towns and de-industrialized cities, the lives of families have been turned upside down by automation and the loss of opportunity. What you still don’t know is that our future will be identical to theirs.
Social costs. Getting married costs: the proportion of working-class adults who marries has plummeted from 70% in 1970 to 45% today. The decline has accelerated since 2000, more or less in the same period in which manufacturing began to disappear.
Unemployment in men causes working-class women to have a stable partner. Out of 11 million single-parent families with a child under 18, 8 and a half million are made up of mothers with children. We see a decline in fertility, marriage, and – conversely – an increase in the percentage of “disadvantaged” births.
Among middle-aged white Americans, the number of suicides has increased, the use of psychotropic drugs and drugs has increased. In 2016, overdose deaths exceeded those from road accidents for the first time in the United States. In Ohio the number of overdose victims has tripled in 2 years. In 12 states of the Union there are more prescriptions for opioids than residents.
Like heroin, opioids create a difficult addiction to break, detox costs range from $ 12 to $ 60,000 without being able to offer any guarantee of success.
The solution to change things is called UBI
To get out of this situation we need radical action, something that really changes things. The cornerstone of the proposal is the establishment of a UBI ( Universal Basic Income ), the Freedom Dividend, which replaces most of the current support programs.
It is about assigning 12 thousand dollars to every American between 18 and 64 years of age (the poverty line is now established at 11.77 dollars), without income discrimination. Everyone would receive it, even those who work and earn, so that the Freedom Dividend does not constitute a disincentive to work and allows those who live above the poverty line to accumulate savings.
According to an analysis by the Roosevelt Institute, the distribution of these 12 thousand dollars a year would lead to a growth in the American economy between 12.56 and 13.10 per cent, and an increase in the workforce between 4.5 and 4.7 million people. The cost ($ 1.3 trillion increase over the cost of current welfare programs) could be covered by the introduction of a value added tax (VAT ).
A new model of capitalism based on the person
We must build a Human Centered Capitalism, in which time is the new currency of exchange. Teach for America , an association that deals with training, spends about $ 25,000 a year for each of the (unpaid) people who lend their work.
Peace Corps has an annual budget of $ 410 million, 56,000 per volunteer. We can leverage this natural inclination to volunteer, provided that people don’t have to worry about using all their time to work and make ends meet.
We can ask the “normal people” to engage in socially useful work, we can use technology to benefit humanity by creating a system Digital Social Credit (digital social credits) to spend, earn, accumulate.
The model is that of Time Banking founded by Edgar Cahn, which have spread spontaneously in small communities, but are still slow to take root in large centers.
The challenge is to build a new capitalism, based on three pillars:
- Humanity is more important than money.
- The unit of measurement of an economy is the person, not the dollar.
- The market exists to serve our common goals and values.