Two perfect storms of automation and aging can cancel each other out

The coming productivity golden age

The Scale of automation will be huge

Yes, a million drivers (1/160 or half a percent of the workforce) is important. And if it is a smaller fraction of all the other millions of jobs that can be automated at lower cost than the current minimum wage*, that simply highlights the scale and scope of change. Automation is going to be monumental in scope and scale, and frenetic in pace.

The Aging Workforce

That said, all this is occurring in the context of an aging workforce. These current workers want to retire, reducing the available workforce. They haven’t saved sufficiently to meet the needs of a long retirement, and need costs to plumet if they are to retire happily. Finally, for much of their additional lifespan, they will be consuming medical care which is both dramatically more intensive and of longer duration than anything we have seen. Automation+AI can solve all these needs.

Two Perfect Storms Interfere to Create a lasting Calm?

These two perfect storms – aging and automation — are, combined, a blessing in disguise: Each making the other much more managable. This is especially true as automation generates productivity for workers (the young required to support the old and their own generative goals) and increased stock market dividends for savers (the old).

Two more crises that help the perfect storm

Two additional threats to the US and UK worker have been 1) low-skill immigration (and the low-skill welfare burdon) and 2) off-shoring of low and medium skill work.

Currently, voters are rejecting further low-skill mass immigration. This will reduce the supply (in the West) of exactly the workers most at risk of permanent unemployment due to their posessing only automate-able skills, and also reduce the welfare burdon on the state. At the same time, from the perspective of an America or UK in which almost all the automate-able work has already been off-shored (everything from iPhones to shoes) or allocated to low-skill immigrants (agricultural labour, aspects of construction), the on-shoring of this work, be it in the form of Apple repatriating iPhone production, or Dyson building large UK robot-factories, or agricultural robots doing all our heavy farm and produce work 24/7/365 is not a cost at all. The only “threat” is on-shore profits that can be taxed, making paying for age-care much easier. For China, Vietnam etc., of course, the near-complete loss of export markets (exactly as their population reaches peak old-age in China’s case) may be devastating.

The Productivity Bonus

All of this can add up to a truly great future: High quality jobs†, in a much richer economy (reliably growing at perhaps 10% or even more a year), with rising productivity seeing increased real wages, in part due to deflation in costs of everything from energy to goods and services of all types, including plummeting health costs as medical workers become automated. Defaltion of course, makes savings more valuable: The opposite of the disasterous stagflation in Weimar Germany. This time, older people will find their savings doubling in value every 10 years or so. All this adds up to a healthy society, free to enjoy (extended) life, greater liberty, and, under a peaceful civil realm where law enforcement also is made more effective, ever greater security in pursuit of a broad-based productive, meaningful life.

There is much more to say here about how AI and robotics can improve everything from education, to genetics, to materials science, and the virtuous feedback loops with new materials to engineer with, and healthier people more able to support themselves.

Suffice it say I am incredibly optimistic about life smack in the eye of these two storms!,

Tim

Footnotes and links

Footnote about the “truckers are the #1 job in most states” meme in the story that prompted this response. This claim is hyperbolic — it arises from how jobs are coded, so other classes of work are much more common, but are fractionated into multiple sub-categories, unlike trucking. But as the story shows,the bigger point is there are dozens of categories of work that will disappear.

† Why will jobs be high quality? As AI-piloted vans drive your streets, with drones flying more actively than their bee name-sakes in and out of the van roof making the final 100 ft of delivery, how will high-skilled workers spend their income? On beautiful flower gardens, on custom furniture, on art, on live plays, on improving our built landscape with one-off gorgeous buildings dependent not only on machinery but also on craft. On yachts (or space craft).

Not only the least-skilled will find a place: A world of basic research funded by 10s of thousands of Medici-like billionaires pursuing unique dreams, in a peaceful world, will see discovery on a scope unparalleled in history, dwarfing that of today, and creating immense demand for everything and everyone from the next Kant and Beethoven to “run of the mill” scientists, to the lab assistant waiting to become the next surprising Michael Faraday.

I think in this world of automation and innovation, where generic is near-free and only the unique has substantial value, the scope for meaningful work will grow, not shrink. Perhaps dramatically. When the 100-inch TV you buy on Amazon costs $20 instead of $20,000, and healthy meals are almost free, even modest wages will sustain a high quality life.