art-ROBOT-620x349Will this be our future?

Machines may be primarily designed to enhance the consumer experience, but here’s what they’re also designed to do: reduce the company payroll.

Witness the automated taxi booking service replacing phone operators. Or the ATMs replacing bank tellers. Or the self-service machines replacing checkout staff in supermarkets, airports, and now at Australia Post. Or, most recently, Amazon announcing that flying drones will replace couriers.

In a study of 700 occupations released three months ago by Oxford University, the professors estimated that 47 per cent of jobs in the United States are at risk over the next twenty years due to the computerisation of workplace activities. Whilst comparisons are always fraught with danger, it’s not unreasonable to assume a similar worst-case scenario playing out here.

Those working in logistics, transportation, manufacturing and office administration have the most to be worried about, with the only remedy being a move to areas where jobs are forecast to grow: namely, the creative and social industries. But as the researchers note in their paper, this would require people to develop creative and social skills, which many are unwilling or unable to do.

The economist Jeremy Rifkin, in his book The End of Work, writes that technology will inevitably eliminate the need for workers. He estimates 75 per cent of jobs in industrialised nations are repetitive in nature, and these are the ones most likely to be swallowed up by robots and machines.

He predicts this will become one of the most serious issues confronting society this century, summing it up by saying: “We are entering a new phase in world history – one in which fewer and fewer workers will be needed to produce the goods and services for the global population.”

Rifkin’s book was written back in 1995. A lot can change in almost two decades. So let’s fast forward to December 2012 to a report published by the National Bureau of Economic Research, an independent and non-profit research organisation based in the US.

Using advanced modelling techniques, the economists concluded those who lose their job to a machine have an incredibly difficult time finding suitable new employment. This creates a perpetual problem, resulting in each upcoming generation being worse off than the one that preceded it simply due to the widening gap between the rich and the poor.

This widening of inequality occurs because workers lose their income while designers and owners of machines snare the incentives. The solution, write the researchers, isn’t to abolish machines – it’s to tax more heavily their manufacturers and proprietors so that a greater number of people can share in the bounty. Otherwise, machines could “spell universal and permanent misery for our progeny”.

So, really, nothing much has changed since Rifkin’s book – except for one important detail. Where once it was the low-wage and low-skilled jobs being substituted with machines, now it’s the high-wage and high-skilled ones, too. Very few workers are exempt.

It’s easy to see why employers would nonetheless want to embark aggressively on such automation – and it’s not just about minimising costs. Machines don’t chuck sickies, they don’t complain, they don’t go on strike, they don’t make as many errors as humans. On financial and psychological levels, they’re clearly a win for management.

But paradoxically, as companies pursue ways to automate and robotise people out of a job, the problem they create is one of rising unemployment. And if the unemployment rate continues to rise, there’ll be fewer consumers available with the means to buy their products.

With fewer products bought, profits are negatively impacted – the very profits that were sought to be maximised in the first place. A capitalist’s dream turns into a capitalist’s woe.

Are you worried about the rise of the robots? Why, or why not?